Penn. Bill OKs ‘No-Deductible’ Collision Coverage, E-Cards

Pennsylvania state capitolPennsylvania lawmakers approved a bill that both exes out a minimum deductible requirement for collision coverage and allows consumers to display their proof of coverage through their smartphones and mobile devices.

SB 1040 is under review to become signed into law. The bill becomes effective in just under two months if signed into law by Gov. Tom Corbett.

Bill Nixes Deductible Requirement for Collision Coverage

SB 1040 changes deductible-related requirements for collision coverage, an optional form of protection for drivers.

A deductible is the amount a driver must pay before the insurer pays for a claim. Generally, adjusting deductibles downward on a policy pushes premiums upward, but doing so can have drawbacks.

Pennsylvania’s bill lifts two current requirements for policyholders with collision coverage, according to a House committee report:

  • That they have a minimum $100 deductible on a collision coverage policy
  • That policyholders who select a deductible below $500 agree in writing that
    they recognize “that a lower deductible means a higher premium”

Also, the bill expands the current requirement that Pennsylvania auto insurance companies offer drivers a $500 deductible. SB 1040 preserves the requirement of a $500 deductible offer but adds language that allows insurers to “offer a deductible in a greater or lesser amount [than $500] or a zero deductible.”

If finalized, the bill would allow for “no-deductible policies” on collision coverage that are currently unavailable in the state, according to Rep. Tina Pickett (R-Bradford), chairwoman of the House Insurance Committee.

The bill lifts the current requirement that a motorist with collision coverage has at least
a $100 deductible.

Bill Authorizes E-Cards

SB 1040 also contained language that allows drivers to electronically prove that they are properly covered in
addition to traditional paper-copy IDs.

Pickett said Monday that SB 1040 brings to bear “the type of technology we literally have at our fingertips,” adding that she “applauds passage” of the “e-card” legislation, as they are called in the industry.

Industry and legislative support is typically strong for e-card proposals. SB 1040 passed both Senate and House committees to reach full votes by the beginning of December; it cleared both
the state Senate and House with unanimous votes in support.

Most states in the U.S. have laws allowing drivers to display their proof of coverage through electronic devices like smartphones and tablets. However, laws differ state by state over what constitutes acceptable proof, who’s liable if the phones are damaged and how drivers’ privacy is protected.

Pennsylvania’s legislation restricts police officers’ access to the phone to only “content that is reasonably necessary to demonstrate proof of financial responsibility.” It also immunizes police officers from liability while handling the phone.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for 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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