Many drivers know that sinking feeling: A police car’s red lights flash in the rearview mirror. As you pull over and the officer approaches, you fumble for your paper insurance card – only to realize you can’t find it.
A common result: Getting ticketed for failure to provide proof of insurance. The inevitable court date follows. However, a growing number of car insurance companies are using technology to make such episodes a thing of the past.
So-called “e-cards” allow drivers to display digital proof of insurance on their cellphones. In 2012, six states – Alabama, Arizona, California, Idaho, Louisiana and Minnesota – changed their laws or regulations so drivers can now use e-cards as proof of insurance.
More than 20 other states are looking at adopting this practice, according to the Property Casualty Insurers Association of America, including Florida, Georgia, Michigan, Ohio and Texas.
Alex Hageli, director of personal lines at the property and casualty insurance trade group, says several major insurers, such as State Farm, Allstate and Progressive, now offer e-cards and that many regional insurers plan to add e-cards in the near future.
How e-cards work
Before e-cards emerged, many states passed laws outlining the exact format that insurance companies must provide to policyholders as proof of auto insurance. Traditionally, this has meant a small paper card.
By contrast, the e-card is the logical progression of a trend that began several years ago, when Colorado became the first state to let drivers use electronic devices such as laptops to show proof of insurance during the car registration process, Hageli says.
E-cards are a big step forward, Hageli says. Because drivers typically receive paper cards in the mail well in advance of the new policy period, they put the cards aside until their old ones expire.
Later on, they forget to replace their old cards when the new policy period begins. Such drivers generally don’t realize they’re driving with the old cards until it’s too late.
“The driver looks for the card and in that instant, they remember that they forgot to put that new card in their wallet,” Hageli says.
By contrast, a person who uses an e-card will have the updated information automatically sent to them. Most likely, an e-card user will have a cellphone in his or her car when being pulled over.
Positive response from drivers
Progressive is one of the insurers now offering e-cards. Customers who signed up for the company’s insurance online in recent years – but were frustrated by receiving paper ID cards – fueled the move, says Chris Ziance, assistant general counsel at Progressive.
“Customer feedback led to this initiative,” Ziance says. “It is 2013, and almost everyone is (electronically) connected.”
Progressive e-cards are available as an app for iPhone and Android devices, and as PDFs. Ziance says customers are happy to have an insurance card that “is always accessible and easily travels with them, which is helpful in a rental car and other situations.”
At Esurance, data showed that a growing number of policyholders were accessing their insurance information through a mobile device, spokesman Danny Miller says. As a result, the company introduced e-cards, which are available both as an app and directly from Esurance’s mobile website.
“It’s one of the most used features of our mobile app,” Miller says. “We consistently get very positive responses from our customers on the ease of getting to their policy information.”
Hageli says that for the most part, e-cards are a welcome development for both insurers and policyholders. He notes, however, that some law enforcement agencies have pushed back against the technology.
“For the last few decades, they’ve been looking at this piece of paper, and now it’s something new,” he says.
Some officers also have cited concerns that their police departments would be liable if the officer accidentally dropped and damaged the driver’s phone. Hageli says some states have added legal language to ensure law enforcement agencies won’t be liable for such damages.
Some policyholders also worry about depending on e-cards in situations where they may drive through a cellphone “dead zone” and be unable to access their insurance information.
Ziance says Progressive urges its policyholders to download e-cards to their devices so they can access them at any time.
“I’m willing to bet the number of customers that cannot access their e-card due to a dead zone is far less than those that cannot produce the paper card because they simply cannot find it,” he says.
Esurance plans to soon add the capability to download an e-card to an electronic device, Miller says.