With smartphones, iPads and other technological gadgets now part
of everyday life, providing proof of car insurance is like a trip
back to the 1950s.
Visit the department of motor vehicles or get stopped by a
police officer and you'll probably fish a business-card-sized slip
of paper out of the glove box -- that is, if you remembered to
replace it the last time you renewed your insurance coverage.
States put a lot of faith in that piece of paper.
The ID card has an expiration date anywhere from six months to a
year from now. So, an invalid card could look legitimate if an
unscrupulous driver cancels the policy immediately after getting
the card. And any officer or clerk who actually checks to see if
your insurance is still up to date may be looking at a database
with a 60-day lag time.
"The law's not keeping up with the reality of the consumer
marketplace," says Alex Hageli, director of personal lines policy
Property Casualty Insurers Association of
There's an app for that
Some states are starting to change the landscape.
now allow drivers to show proof of insurance with a smartphone app
or PDF copy of their policy. A committee in the
Assembly recently approved a bill allowing electronic proof of
That's a start: It allows drivers who buy coverage online to get
proof of insurance immediately, and updated information can be sent
by smartphone after renewals, keeping the most up-to-date version
Even in states that don't specifically allow it, virtual proof
of insurance could come in handy, as South Carolina resident Ayaz
Surka found out when he was pulled over for having an expired
license tag. He showed the officer a PDF of his insurance card on
his phone. The officer told Surka the card could have been
"created" and ticketed him anyway. Surka went to court, where a
judge dismissed both tickets.
That's great, but it's hardly proof of insurance, Hageli
"If you're just looking for the information just to look at it,
who cares? It could be on a cellphone. It could be on toilet
paper," he says. There's simply no way to guarantee, either by
smartphone or paper, that the policy is currently in force.
States long have verified insurance by collecting data from
insurers, putting it into a database and comparing it with its list
of registered cars in the state. Cars without a matching policy are
The information is updated every few months.
Other states ask for proof of insurance at registration time.
But it's too easy for drivers to cancel the insurance policy
afterward, says Adele Rapelye, spokeswoman for the Ohio Bureau of
Motor Vehicles. As a backstop, Ohio sends out 5,400 letters each
month to registered drivers asking them to prove they have
insurance. The state finds the random program to be more successful
at identifying drivers who don't have insurance, Rapelye says.
Real-time proof of insurance
The newest method works in real time with a database insurers
update electronically. It takes three seconds to verify if a
registered car has valid insurance, Hageli says. An officer can
send in a query to the database any hour of the day using a car's
license plate number and immediately get current information on the
car's insurance status. Idaho, which is setting up such a system,
estimates the system will cost $150,000 to set up and $50,000 a
year to maintain.
Under various names -- Online Verification (OLV), Real Time
Verification, and Web Services - Alabama; Montana; Oklahoma;
Nevada; South Carolina; Texas; Washington, D.C.; and Wyoming
already have real-time data or soon will. Idaho and Utah have
recently passed laws to implement it, and Mississippi is expected
"From a technical standpoint, it's the smartest way," Hageli
The new verification systems arrive as the rate of uninsured
motorists has reached 13.8 percent nationwide, according to the
Insurance Research Council. State legislatures have deployed a
number of get-tough measures that include fines and even car
impounding for drivers defying the law. (See "Do you look like you
Lawmakers in Tennessee have even proposed mandatory arrest for
driving without proof of insurance in cases of serious injury.
But does it keep uninsured drivers off the road?
While online verification systems can identify drivers without
insurance, they don't necessarily mean the state is enforcing its
laws that keep them off the road. Hageli has two suggestions for
lowering uninsured motorist rates further.
Indiana has a "brilliant" program that focuses on those most likely
to reoffend, he says. After those drivers prove they have insurance
so that their license isn't revoked, the state will randomly check
with their insurance companies for five years.
"Those who have driven without insurance in the past are much
more likely to drive without insurance now," he says.
Hageli also suggests giving police departments more money so
that officers can watch traffic courtrooms. That way, the officers
can ensure that drivers just convicted of not having insurance who
have had their licenses suspended don't get in their cars and drive
away after their court appearance.