PCI: 21 States Discussing Electronic Insurance Proof Plans

Twenty-one states should be considering legislation to accept electronic copies of insurance cards as valid proof of coverage this year after 2012 saw five states approving such plans, according to the Property Casualty Insurers Association of America (PCI).

An electronic-proof proposal that has already been introduced in Wyoming, SF 87, cleared the state Senate late last month and is the furthest along in the legislative process out of states tapped by PCI as “taking another step into the electronic age.”

Also late last month, a similar proposal, HB 20, was introduced in Ohio.

According to PCI, 19 other states will likely discuss proposals this year that would allow motorists to show electronic auto coverage proof, which the trade organization has dubbed “e-cards,” at a traffic stop or at the DMV when renewing registration:

–Rhode Island
–South Carolina

PCI called e-card proposals a “win-win-win” for the insurance industry, drivers, and politicians alike.

Today’s motorists already rely heavily on web-based devices, according to PCI, and insurers greet such proposals because they help them “adapt to changing consumer behavior,” while state officials should welcome the unburdening of minor court cases that accompanies such plans.

“The courts win because the docket will be cleared up of individuals who had insurance but just didn’t have a current ID card,” Alex Hageli, PCI’s director of personal lines policy, said in a statement.

Hageli also said that e-card proposals would alleviate burdens on law enforcement entities that have had to issue “thousands upon thousands of tickets” to drivers who simply “forgot to put their new ID card in their vehicle.”

“It’s a big waste of everybody’s time and effort,” he said. “Now is the time to make a small change in the law so insurers and consumers can take advantage of technology and avoid those annoying fix-it tickets.”

Enforcement Differs Between Plans

Seven states currently have regulations allowing some electronic means of proving coverage. Arizona, California, Idaho, Louisiana and Minnesota all passed pieces of legislation last year. In Alabama, insurance regulations were amended to allow electronic proof during the registration process and at traffic stops. Colorado has had a longstanding regulation permitting electronic proof during the registration process.

However, what constitutes “proof” differs between each proposal.

Language under Idaho’s law allows for electronic formats of a policy that includes “display of electronic images on a cellular phone or any other type of portable device.”

Arizona’s law allows for an image of the policy card to be displayed as long as the card states required vehicle information. For drivers, such general language means they can snap a photo of their policy card with their mobile device themselves (as long as authorities can view crucial information like policy number) without having to download a smartphone application with an electronic version of their policy specifically issued by their insurer.

Idaho and Arizona were the first two states in the U.S. to pass its legislative proposals for e-cards.

Other proposals are more concrete in their definition of what can be displayed to authorities as evidence of coverage.

Wyoming’s plan calls for a specific “identification card.” Such ID cards are available through smartphone applications, showing that “the insured and insurer both agree to the issuance of the card in electronic format,” according to the piece of legislation.

State Farm’s Pocket Agent is one such smartphone application that, among other things, displays a motorist’s policy information. But even the insurer states that its e-card “does not meet requirements for proof of insurance as requires in some states.”

So with more than a dozen states looking at e-card plans, motorists hoping to jump on insurance’s next big thing will not only need to check if how close their legislators are to approving such measures but also what their state considers acceptable electronic evidence of coverage.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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