Archives for November 2018

Electronic Insurance ID Cards & Verification

With the electronic age in full swing, the era of having paper Auto ID cards is becoming extinct.  While not all states or insurance carriers have adopted the electronic ID card, many are moving towards it.  Additionally, many state DMVs are welcoming technology that allows law enforcement direct access to a system that will instantly verify insurance on a vehicle through its registration.

“According to the folks at Property Casualty Insurers Association of America, 11 states now have laws or regulations on the books that allow for electronic insurance cards to be used for both vehicle registration and when being pulled over by the police – Alabama, Arizona, Arkansas, California, Idaho, Kentucky, Louisiana, Minnesota, Mississippi, Virginia, and Wyoming.

In Colorado, drivers can use the e-cards for registration, but not for police pull-overs.

PCIAA says that the governors of Kansas and Indiana are expected to sign legislation in their states, while several other states – Florida, Georgia, Hawaii, Indiana, Iowa, Maine, Michigan, Missouri, Ohio, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, and Wisconsin – have pending legislation on the matter.”[1]

What does this mean when you rent a vehicle?  It means that the rental agency is still going to request your insurance information and you may still need a valid ID card as proof of insurance.

Some states require insurance carriers to “report” policy activity directly to the DMV or other state sponsored agency.  This reporting may be tied to the registration of the vehicle. Additionally, some states only require this reporting for personal insurance, but not for commercial policies.

How Does This Impact The Rental Community?

First of all, your renter may not have the traditional “Proof of Insurance” that you’re accustomed to. When you are gathering information from a renter with an electronic copy of their ID card, it may be beneficial to have them electronically forward a copy of that ID card to you for your files. In the event of an accident, you would still file a claim with your rental insurance policy, but still need to provide the renter’s insurance information so that the claims department can reach out to that carrier for any responsibility that they may have in the claim. In a towable RV situation, the liability follows the tow vehicle and as a rental operator, you absolutely need to have this information prior to releasing your travel trailer to the renter.

Secondly, it is important that you maintain ID cards in your vehicles to avoid your rental vehicle from getting impounded upon a traffic stop or accident.  Even though your rental policy is secondary to your renter’s personal insurance, the vehicle is registered in your business name and will require YOUR proof of insurance in the event of a traffic stop or accident. Just because your state does not require a paper ID does not mean that another will find an electronic copy acceptable and in a rental situation, how would you, the rental operator, continuously provide this information without a paper copy of your ID card? Additionally, in the states where law enforcement can verify insurance, many can only access personal insurance information, not commercial policy information.

All insurance carriers have the ability to produce a paper ID card, but the rental community also needs to adapt to changing environments.  Protect your rental operation by having proper proof of insurance from your renter and for your renter.  Nobody wants a negative review because a vehicle was impounded for lack of insurance proof, which could be costly.


A Massachusetts insurance website had this to say:  “Many other states require that drivers carry proof of insurance and require that insurance companies issue Auto Insurance ID Cards with policies.  However, most drivers in Massachusetts have not heard of such laws because they don’t exist in our state.  This can create stressful situations, which everyone would rather avoid, and it points out the challenges that inconsistencies between state laws can cause.

Recently, one of our customers had an accident while driving out of state, and the police officer asked for a proof of insurance card.  In Massachusetts, however, proof of insurance cards are not issued and vehicles aren’t required to carry them because this information is electronically available to law enforcement via the RMV.  Gladly, after some back and forth with the officer and providing other information, the person was allowed to leave the scene.  Unfortunately, some police officers may not be informed about our laws or be easily flexible about these differences between state insurance requirements.

When you think about it, the Massachusetts method is actually more accurate because police can verify updated RMV information rather than rely on paper documentation that may be out of date if a policy is cancelled. However, since laws vary among states, you as a driver need to be aware of the possible differences and be prepared in case you have a traffic violation or accident when driving your vehicle in another state.”

A renter can use a copy of their insurance policy with their registration, which lists the insurance company and notates that “No Insurance Card Required: Massachusetts’ law does not require an insurance card.” as proof of insurance.