An electronic database designed to snag uninsured motorists went into effect Wednesday as part of an effort to force those drivers -- about one in four --to get covered or get off the road.

The move is similar to efforts in other states -- some of which have produced embarrassing glitches -- and is designed to catch motorists who try to beat the system by prematurely canceling their policies while continuing to drive with insurance cards showing they still are covered.

State and insurance industry officials say these drivers are costing everyone else money by pushing up premiums for the uninsured motorist portion of auto policies.

With a few exceptions, all insurance companies Wednesday were required to begin electronically transferring names of canceled policyholders to the Department of Motor Vehicles.

Once it receives the names, the department immediately will send out letters notifying motorists they are being fined $5 for each day they're uninsured, and that they stand to have their tags taken away and registration suspended if they don't get coverage within 45 days. Reinstating registration will cost another $200. All fees and fines go to the DMV.

"We had a similar policy years ago, but it lacked the organization and enforcement and it just faded away," said Rep. Bob Walker, R-Spartanburg, an independent insurance agent.

Walker sits on a seven-member working group aimed at setting up the database system for the 2-year-old legislation.

Walker, who also is licensed to sell insurance in North Carolina, said the difference between the two states is stark.

"North Carolina is so far ahead of us because they have had a system in place for years and now have something less than 5 percent of motorists who are uninsured," he said. "The latest figures out of South Carolina show we're in excess of 25 percent."

South Carolina's legislation is being tweaked to close a loophole and make it more painful for motorists to cheat, said another member of the working group, Eleanor Kitzman, president of Drivers Choice Insurance Services in Columbia.

As it stands, insurance agents are required to submit canceled policyholders' names only once a month to the DMV, meaning some offenders could slip by undetected for a few weeks. Proposed changes, expected to be adopted in January during the coming legislative session, will make insurers comply on a daily basis.

"I don't really see this as a problem right now," Kitzman said. "We and other insurance companies plan to file with the DMV each day. This will just make it so everyone has to."

Kitzman said other changes planned in January would shorten the 45-day grace period to 20 business days, and ratchet up the punishment to include revoking drivers' licenses.

Walker believes the threat of a license revocation will make a world of difference.

"When you just suspend a registration, many people will run out and register the vehicle under someone else's name," he explained. "But take away that license, and I'm telling you it will get their attention right away."

The insurance industry contends that the rising cost of auto insurance in recent years is a direct result of the growing number of uninsured drivers across America.

As a result, Walker said, uninsured motorist coverage has gone from "next to nothing" to $50-$100 a year.

Neither Walker nor Kitzman could say for certain that premiums would come down because of the database, but they said it was possible. If nothing else, they suggested, the drivers caught by the new database would have to buy new policies, putting substantial amounts of money into insurers' hands and easing pressure on rates.

While insurers and regulators generally accept that the database is a good idea, its success in the near term will depend on how smoothly it is rolled out.

Last year, for example, Georgia activated its own uninsured-driver database and immediately ran into a host of glitches, said Dean Kruger, chief actuary at the South Carolina Department of Insurance. "We looked at them and learned from their mistakes."

Georgia's system is more comprehensive than South Carolina's in that it requires insurance companies to report all policy cancellations, not just those closed out before expiration.

The extra names demand a lot more cooperation between insurers and the DMV. Policyholders there also are keyed into the database by their 17-digit Vehicle Identification Number, or VIN, and slip-ups have led to some awkward situations.

"All is takes is an 's' to be confused with a '5' when it's entered in the database, and the system doesn't recognize you," Kruger said. "When a state trooper in Georgia pulls you over and runs a check and sees you are not in the system, you get arrested there on the spot. We don't do that here."

Kruger said that besides being ineffective, it was deemed too costly to put a computer dedicated to the database in each police car across the state.

The South Carolina system will run via the Internet, meaning that insurance companies won't have to pay for extra technology to connect with DMV.

"We have been testing and retesting this thing since March and feel it's all ready to go," Kruger said.

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