How Does Electronic Proof of Insurance Work?
(Updated: January 2014)
It's a tech-driven world, so why wouldn't your auto insurance be headed the same way?
It may be a chicken-or-egg situation, but public demand for an easier, more portable way of proving insurance has increasingly coupled with insurers' broader use of technology. Meanwhile, legislation has spread mandating that law enforcement and state agencies accept electronic insurance cards as legally recognized proof of coverage.
With nearly every hand-sized phone and device able to snap a photo or display an image file, it brings up the question of what should be able to constitute proof of car coverage for a driver during a traffic stop.
So read on as we take a look at what's developed so far in state legislatures across the U.S., which pieces of legislation allow electronic proof of auto coverage, and how the wording of those laws dictate how motorists .
What E-Cards Mean for You
States where e-cards are legally recognized
|State||Legal basis||Effective date||Privacy|
|Alaska||HB 146||July 2013||X|
|Arizona||HB 2577||March 2012||X|
|Arkansas||Act 175||June 2013||X||X|
|California||AB 1708||January 2013||X||X|
|Florida||HB 157||July 2013||X||X|
|Georgia||HB 254||May 2013||X|
|Idaho||SB 1319||July 2012|
|Illinois||SB 1775||August 2013||X|
|Indiana||SB 620||July 2013|
|Iowa||SF 386||May 2013|
|Kansas||S 85||July 2013||X|
|Louisiana||HB 1130||August 2013||X|
|Maine||LD 133||May 2013||X|
|Mississippi||SB 2593||July 2013|
|Missouri||SB 322||July 2013||X|
|North Dakota||HB 1263||2013|
|Oregon||H 2107||May 2013||X|
|Pennsylvania||SB 1040||February 2014||X||X|
|Tennessee||HB 478||May 2013||X|
|Texas||SB 181||May 2013||X|
|Utah||HB 295||May 2013||X||X|
|Wisconsin||Act 31||July 2013||X||X|
|Wyoming||SF 87||July 2013||X||X|
contain provisions related to phoneowners' privacy|
**State's guidelines define who's liable if the electronic device is damaged
The table to the right shows the 30 states that currently have regulations, codes, or laws on the books governing how electronic proof of coverage should work. It also indicates whether the e-card guidelines contain provisions about phoneowners' privacy protections and liability if a phone is damaged in the course of viewing an e-card.
It's important to note the way your state defines an electronic car insurance ID and if your legislators wrote anything into the law about privacy and police use of your device or smartphone. That's because there is a range of ways state laws and regulations handle e-cards.
Even if you're in one of the states with an already approved law, you should carry your paper version of your policy ID card if you want to cover all your bases.
For all other policyholders, consider how your state's e-card guidelines are worded.
Idaho, one of the first states in the U.S. to have an e-card law go into effect, defines permissible formats of electronic proof broadly.
According to PCI, the nationwide trade organization, it submitted a draft for the Idaho law with the following wording:
"The certificate or proof of liability insurance required by this section may be produced in either paper or electronic format. Acceptable electronic formats include display of electronic images on a cellular phone or any other type of portable electronic device."
PCI said it backs the law's language "for purposes of consistency" but supports other wording as long as it doesn't mandate insurers to issue e-cards and still leaves policyholders with the choice to offer the traditional paper ID card as evidence.
In Louisiana, the law is worded similarly. Such provisions could be taken as permitting the storage of a photo of your ID card on your smartphone that is displayable during incidents like traffic stops as a legal form of proof.
But what makes for an acceptable photo of your policy card?
Minnesota goes further in that definition than other states do, listing the following required information that typically appears on a paper ID card:
- Insured's name
- Policy number
- Policy dates of coverage
- Make, model, and year of the vehicle being covered
- Vehicle identification number (or at least three digits of that number)
- Name of the coverage provider
Texas also describes proof as "an image displayed" on a mobile device that contains the following:
- Name of the insurer
- Insurance policy number
- Policy period
- Name and address of each insured driver
- Policy limits or a statement that the coverage of the policy complies with the minimum amounts of motor vehicle liability insurance
- Make and model of each covered vehicle
The Arkansas proposal offers a unique definition of acceptability, requiring that devices showing an electronic form of an ID card display the typically required policy info "as clearly as a paper proof-of-insurance card."
So take heed: Your coverage information needs to at least be legible in a photo if you want to try to use it as proof, and that might not always pass muster with a police officer in a traffic stop. The safest bet besides a paper ID card would be an insurer-issued electronic ID card.
How Private Is My Proof-Providing Device?
Privacy proved to be a common sticking point for lawmakers crafting e-card legislation.
According to information provided by PCI, there are 19 states with e-card laws that have provisions built into them that protecting phoneowners' privacy when authorities are viewing their displays of coverage.
California legislators discussed privacy at length after a legislative analysis highlighted the issue of "what can be done with the information, especially under the laws of criminal procedure."
"Practically speaking, this might mean that any person who hands their cell phone over to a peace officer voluntarily risks disclosure of private information accidentally revealed, even though AB 1708 only narrowly authorizes peace officers to view evidence of financial responsibility," the 2012 analysis stated.
The result was a prohibition written into the law that prevented law enforcement "from viewing any other content on the mobile electronic device" in the course of viewing and/or accessing the e-card.
Louisiana built similar provisions into its law. Those protections for motorists were also built into proposals in Arkansas and Texas, the last of which states in SB 181 that an "image" display does not mean "effective consent for a law enforcement officer, or any other person, to access the contents of the wireless communication device except to view the financial responsibility information."
In other words, expect that handing over policy proof via your smartphone is exactly just for that purpose: to prove that you're covered.
In addition, PCI points out that there are eight states with e-card provisions that define which parties are liable for a policyholder's phone should it be damaged in the course of accessing an e-card.
Do Your Homework
It's important to note that this is a developing issue. In states without such laws governing electronic proof of coverage, they may be well on their way to establishing them. In states allowing e-cards, some police officers may still be unaware of the exact proof-related procedures that are within the new law.
So if you'd like to do further research, your insurer, local legislator, motor vehicle department, state insurance regulatory department, and police department would be good contacts to touch base with to know what kind of proof you can legitimately show in your area.
If you're not in a state that currently allows its authorities to accept digital coverage ID cards, then keep updated on car insurance news; your state very well be the next to legalize it.
In October 2013 in New York, three months before lawmakers there convened for their next legislative session, a senator promised to bring a New York electronic proof bill up for consideration.
Again, carrying your paper ID card would the safest bet until more states legalize e-cards as proof, iron out legislative kinks they see that formed in the first states that approved them (see above), and make digital proof a more universal concept nationwide.
And when that happens, a motorist's world might look a bit like this.
Regulations and Codes Allow Digital Proof in Several States
In some cases, lawmakers haven't used the typical legislative process to legalize electronic proof and instead either created codes and regulations or modified existing insurance-related statutes.
More than a half-year after legislators left Oklahoma's digital car insurance bill, SB 860, unfinished in the legislative process, drivers in the Sooner State still got the green light to display their phones to prove coverage. In November 2013, the Oklahoma Insurance Department issued a bulletin confirming that current insurance code doesn't prohibit electronic proof of coverage because it "doesn't specify which format" is required for coverage verification.
"Therefore, an electronic version is perfectly acceptable," John Doak, Oklahoma's insurance commissioner, said in a public statement.
A similar situation recently unfolded in Florida, where the state Legislature passed a proposal to put electronic proof into effect by summer 2013. However, e-card usage under that proposal, called HB 157, needed to be implemented into an already existing administrative rule. An amendment to that rule wasn't passed until December 2013, when Gov. Rick Scott and his cabinet of state officials reviewed and approved it, cementing e-card usage for Florida drivers.
Colorado's insurance code had allowed electronic evidence of coverage during the car registration process before lawmakers there passed HB 1159, but the piece of legislation extended legal use of electronic car coverage proof to traffic stops.
In Alabama, regulations that went into effect in June 2012 permitted drivers to show proof of coverage through electronic means at traffic stops and the registration process.