The Digital Transformation of Insurance
More drivers using smartphones to show proof of insurance
February 14, 2013
Clearly recognizing the changing times and technology, California recently became the seventh state after Alabama, Arizona, Colorado, Idaho, Louisiana and Minnesota to modernize proof of insurance laws to meet the needs of the digital consumer.
The electronic proof of insurance legislation (Assembly Bill 1708), which went into effect at the beginning of the year, gives California motorists the choice of providing proof of insurance to police electronically via a smartphone or mobile device versus presenting a hard copy document.
Such legislation is a win/win for consumers, police and court officials. Since “fix-it” tickets and court dates will no longer be needlessly issued to drivers who have coverage but not an actual paper copy of their proof of insurance, valuable time and money will be saved.
A competitive edge for agencies meeting the needs of the digital consumer
The new law is also a big win for insurance agents who respond to the modern consumer’s demand for quick and easy online access to their insurance information. There’s real savings to be had in moving from paper-based systems to digital portals. Agencies will significantly reduce expenses related to printing and mailing policyholder documents.
Given how consumers have embraced mobile technology, it’s only a matter of time before more and more states pass similar legislation. More than 20 states are considering electronic proof of coverage bills or regulations in 2013, including: Arkansas, Colorado, Florida, Georgia, Hawaii, Indiana, Iowa, Kansas, Maine, Michigan, Missouri, Mississippi, Ohio, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, Wisconsin and Wyoming. Wyoming’s measure, SF 87, has already cleared the Wyoming State Senate.
Insurance agents who provide their customers with the on-demand self-service functionality that consumers have come to expect stand to gain a substantial competitive edge in their markets. In fact, agents who have added a digital client portal to their customer service strategy have seen higher sales and improved client retention rates. It’s important to note that the access to electronic proof of insurance is more than a picture of the ID card stored on the device. It’s an ID pulled on demand with up-to-date information from current policy data within the agency management system.
Alex Hageli, director of personal lines policy at Property Casualty Insurers Association of America, summed it up well when he said:
“Electronic proof of coverage is the wave of the future given how prevalent smart phones have become. Policyholders want to go ‘green,’ but without a change in the law insurers are still required to send paper ID cards to each customer. Several insurers already offer apps or will email copies of policies to consumers. Hopefully more states will follow in California’s footsteps in 2013 and modernize their proof of coverage laws.”
How do you see this change in legislation affecting your agency? What steps are you taking to meet the needs of the digital consumer? Tell us in the comment section below and use the social buttons to “share” this important industry legislation with your peers.