Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 14, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.

Smartphones are being used for any number of reasons nowadays, electronic devices that we no doubt wouldn’t be able to live without. Mostly to play Angry Birds, but we’ll pretend the uses are ultra important to justify the fact that they cost more to purchase and operate than our annual insurance budgets.

Heck, there’s even iPhone Insurance to help you with things like screen repair, or with a replacement phone should your electronic lifeline suffer any accidental damages…but we digress.

There’s more in the works than a protection plan that lets you file a claim for your phone itself. The latest development is getting proof of insurance sent directly to your smartphone in the event you’re pulled over in your vehicle and asked to show it to a police officer. You’d only have to worry about your vehicle registration, which is most of the time attached to your vehicle anyways. This  sounds like a pretty sweet deal!

No more rummaging through McDonalds napkins and wrinkled oil and lube receipts in a panic looking for your most recent auto insurance liability ID cards. Now you have the ability to utilize electronic proof – which means having your insurance policy with you as long as you have your phone. Let’s face it, most of us don’t go anywhere without them anymore, so you may think that they’re even better than insurance cards, which we might misplace or forget about.

Often times, simply forgetting to place your new insurance ID card in the glove box can result in a costly ticket and a trip to the courthouse to show you actually did have insurance at the time of the traffic stop – court fees still included by the way.

What’s the deal?

Mike Gatto, a California Assemblyman, has proposed a piece of legislation that would require insurers to provide evidence of insurance coverage directly to the smartphones of their insured parties any time it’s requested.

Specifically, Bill 1708, if passed, would force insurers to electronically deliver proof of coverage to any ‘small, hand-held computing and communication device that has a display screen with touch input or a miniature keyboard’.

That sounds like pretty much any cell phone in operation these days. Providing some form of proof of purchase straight from your phone may not sound like a big deal, but it could be the saving factor between you and some serious financial repercussions.

Compare Quotes From Top Companies and Save

 Secured with SHA-256 Encryption

Is this a good idea?

Well, it’s obviously more convenient, and who doesn’t like that? However, convenience always comes at a price. And it would cost us here as well. How?

It’s simple. The cost of any good or service is passed on to the consumer any time you force a company to increase research and development costs to adapt new technology, which is exactly what would happen here if this bill becomes law.

The bottom-line is your insurance premium will undoubtedly increase if your insurance company is forced to spend any amount of money instituting these changes. That means your monthly premiums could go up if your company needs to reimburse themselves the cost of all this change.

Insurance companies are already adapting to and using new technology regularly without government involvement. Just take a look at Progressive’s Snapshot program or State Farm’s Driver Feedback app.

What do Snapshot and Driver Feedback have in common? They are designed to LOWER car insurance premiums for those who deserve it…not INCREASE everyone’s insurance premiums to accommodate a few forgetful drivers. Most people want their insurance options to come at a low rate, forgetting that convenience is something else that is usually paid for.

What are the alternatives?

We’re glad you asked. States such as Georgia and Texas have electronic insurance compliance systems that allow police, the State Department of Motor Vehicles, and insurers to communicate in real time via large databases. Doing so helps to keep the cost of insurance on the low end.

Car insurance and what specific coverage options you’ve opted into can also be verified easily during a traffic stop or in court (or any other time it is necessary to show evidence of auto insurance) by any party that has access to the database. Sometimes that means that they can learn if you truly have comprehensive coverage after you’ve hit a deer simply by running your license plates. Though keep in mind this isn’t practiced in every state. If you’re ever questioning the laws in your state, you can contact an insurance agent to ask them, or look it up online.

As always, the best practice is to store proof of insurance in your glove compartment and leave it there in case you ever need it. The card may not be the most convenient, but it’s acceptable proof that will be there as long as you put it inside your vehicle, and that’s what matters.

After all, a smartphone could be out of juice the one time you happen to get pulled over…

Tip: How to lower your car insurance premium.