Electronic Proof of Insurance—The Time Has Come

How many times have your clients received a traffic ticket because they couldn’t find their insurance card in the glove compartment? Or if they did find the card and give it to the police officer, did the officer hand it back, saying it had expired? In this scenario, the client now has to take time off of work to show up for a court appearance with a little piece of paper in hand to prove that they did, in fact, have insurance in force at the time they were pulled over.

The digital consumer—your client—is not going to stand for this antiquated and paper-based process much longer. If they can use their smart phone to get through TSA airport security and board an airplane, why can’t they use that same phone to prove they have auto insurance in force when asked by a police officer?

In a small but growing number of states they can.

Electronic ID cards

State legislators and regulators are beginning to update laws to recognize the increasing use of paperless technology by allowing insurance companies to provide policyholders with electronic ID cards. Converting from the antiquated paper-based system to an electronic display of proof of insurance will save insurance companies the cost of printing and mailing ID cards to all policyholders. It will also save law enforcement and court personnel time and money because they will no longer need to process tickets written for drivers who have coverage but forgot to put proof of insurance in the car.

This is a dynamic issue with state legislatures. Here is a short list of the states that have already made (or are making) this change:

  • Alabama—Alabama will soon publish a first‐of‐its‐kind regulation allowing motorists to electronically display proof both at registration and during traffic stops starting January 1, 2013.
  • Arizona—Gov. Brewer signed HB 2677, authored by Representative Dial, on March 27.
  • California—Assemblyman Gatto introduced AB 1708, legislation allowing insurers to provide proof of insurance to a mobile e lectronic device.
  • Colorado—An existing Colorado regulation allows motorists to show proof of coverage electronically when they register their vehicles, and will consider legislation to expand it to traffic stops.
  • Idaho—Gov. Otter signed SB 1319 into law on March 27, 2012.
  • Louisiana—In April, HB 1130 by Rep. Greg Cromer was unanimously approved by representatives and was sent to the Senate. The original ID card or photocopies of it are currently the only proof insurance state law permits.
  • Minnesota—Minnesota made the change to e-Card in 2012.
  • Mississippi and Maryland may also consider legislation to allow electronic proof of coverage in 2012.
  • [Update] Seventeen states that approved electronic proof of coverage laws in 2013 are: Alaska, Arkansas, Colorado, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Mississippi, North Dakota, Oregon, Tennessee, Texas, Utah, Washington and Wyoming. This list is likely to grow even longer in 2013 as legislation is awaiting signature by governors in Illinois, Missouri and Wisconsin.
  • In total as of June 18, 2013: The states that allow electronic proof of insurance coverage are: Alaska, Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Mississippi, North Dakota, Oregon, Tennessee, Texas, Utah, Virginia, Washington and Wyoming.

State insurance agent associations across the United States have always prided themselves on their lobbying ability and efforts. I can’t think of a better use of those relationships and resources than to encourage every state to submit legislation to allow electronic proof of coverage.

I encourage every agent to approach their state association and ask them to add this lobbying effort to their legislative agenda. Supporting this change will make the lives of every agency client better.

Steve Anderson provides information to insurance agents about how they can use technology to increase revenue and/or reduce expenses. He speaks professionally to hundreds of agents each year on the future of technology, the social web, and how insurance agencies can establish their Internet presence.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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6 thoughts on “Electronic Proof of Insurance—The Time Has Come

  1. I got a ticket this year for no proof of insurance and I had a pdf version on my phone. The cop wouldn’t accept it. I have court Feb 14th. Where is this information documented. I am in the state of Alabama.

  2. As I sit on the Kansas Insurance Commissioners Agents Advisory Group… this is an item I will take to our next meeting (early February) and will also provide to our newly elected State Representative(s). Seize the moment. “MO”

  3. The legal requirements can be very different in each state. Some require proof of insurance to register a car or renew tags, others just if you’re pulled over for a traffic violation. So any legislation would need to be customized state by state. The best situation would be if an electronic image could be valid for any situation where proof of insurance is required.

  4. Thanks Steve, the time has come, time to talk with our state legislators. Are there any states that are working better than others? Every state should not have to re-invent the wheel on this one, we need to keep it as simple as we can.

  5. Right on Steve… the time has come! These things seem little to some, but as you mentioned above… this is time wasting, and just a down right old school business practice…

    As the companies start to offer this (some are) this need will gain momentum… fast… once one consumer tells the other, it is only a matter of time before someone creates a FB page or website exposing this need and the lack of it… the insurance companies and agencies that grasp this early will be able to seize on the moment by showing they are ahead of the game by offering it immediately.

    Thanks for the post Steve… now to the companies!