Nearly half of U.S. states now allow electronic proof of auto insurance

There are now 24 states allowing some form of electronic proof of coverage during a traffic stop, the Property Casualty Insurance Association of America reported earlier this month.

In what the association says is a legislative trend in terms of insurance, 17 states have passed laws this year allowing drivers to show proof of auto coverage using a smartphone (as of June 6).

“In just two years, policy makers in nearly half the country have changed their laws to enable consumers to use their smartphone to show they have insurance instead of keeping that little piece of paper in the glove compartment,” Alex Hageli, PCI director of personal lines policy noted in a statement from the association.

“It makes good sense to allow consumers and insurers to use increasingly ubiquitous technology to comply with the law,” Hageli added.

Ann Carrns, a writer for the New York Times, seems to agree. In a blog post this week, Carrns explained why she’s behind electronic proof.

“I rarely seem able to remember to transfer the latest paper cards from the envelope mailed to me by my insurer to my glove compartment, and my wallet,” she wrote. “So the card I have with me is often dog-eared and out of date, even though I have paid my premiums and my coverage is current.”

The PCIAA has also published a map showing the various states that allow electronic proof. It says the list will only get longer as about seven other states are in the process of reviewing legislation on the issue.

“Increasing sales of tablets and other mobile devices are motivating consumers to want multiple communication platforms with their agent and insurer,” Kelly Campbell, PCI vice president for state affairs noted.

“Three states have approved laws allowing electronic delivery of insurance documents, with five more states actively considering legislation during 2013 sessions. These laws are moving the interaction between customers and insurers away from the Pony Express and into the 21st century.

Other states have also passed laws that will allow consumers to access their insurance policy through a website, Campbell also noted.

In Canada, insurers are still reluctant to “make the first move” on electronic proof of coverage, Willie Handler, a consultant with Willie Handler and Associates, wrote in a recent issue of Canadian Underwriter magazine.

“Despite smartphones, tablets and other technological gadgets now being part of everyday life, providing proof of auto insurance coverage is like a nostalgic trip back to the days of our parents or grandparents,” he wrote.

While some of the concerns around electronic proof are valid, Handler said that it still seems “inevitable” that it will become the norm in Canadian insurance.