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Which is better: Paper insurance cards or digital?

You probably rarely think about your proof of car insurance card. However, it’s essential to have it on hand those occasional times when you really need it, such as when you’re involved in a car accident or pulled over by a police officer. If you aren’t able to provide your insurance information, you could find yourself in legal trouble or facing a steep fine.

Many drivers who are fully insured have trouble remembering where they put their proof of insurance cards when asked to produce them.

But they rarely misplace their smartphones.

insurance cardsAs a result, many insurers are choosing to offer digital insurance cards or “e-cards.” These are digital versions of a traditional proof of insurance card, which can be pulled up on a policyholder’s mobile phone.

State Farm Insurance, for instance, offers a Pocket Agent mobile app, with features including options to pay an insurance premium or submit a claim online, as well as the ability to view a digital insurance card.

“Some customers still prefer to have a paper card, but more and more, we’re seeing that our customers’ preferences are having their insurance information at their fingertips and digitally available,” says Dave Phillips, a State Farm spokesman.

Other insurance companies are going digital, too: GEICO’s app includes online payments and claims and a digital insurance card; Progressive also offers a similar app.

Such digital cards include all of the information on a physical card. They are currently legal for use instead of a physical card at traffic stops and during vehicle registration in 27 states, many of which just approved the cards this year.

As a consumer, should you go digital, or stick with your paper insurance card? Here’s are three things to consider.

Paper insurance cards vs. digital insurance card

1. Consumers are more likely to lose their paper insurance card than a digital one.

Every year, thousands upon thousands of tickets are issued to drivers just because they forgot to put their new ID card in their vehicle,” says Alex Hageli, Property Casualty Insurers Association of America’s director, personal lines policy, in a statement. Although drivers can contest the tickets, it still means spending time in court.

Some might have lost their insurance cards, while others simply forgot to replace an expired card from a previous year with the current year’s proof of insurance. However, unless you’ve lost your smartphone, you’ll always have access to the current version of a digital insurance card.

“This is such a common sense switch that will save everybody time and effort,” Hageli says.

2. Many customers prefer the ease of digital interactions.

Today, many Americans have shifted from paper to digital for most of their daily activities, including reading books and newspapers and paying bills. A 2012 JD Power survey of the insurance industry found that 40 percent of Generation Y insurance consumers would use the insurance company’s website as the first step to address an issue, rather than contacting an agent.

3. Digital cards are not legal everywhere yet.

Currently, digital insurance cards are approved to replace physical proof of insurance in the following 27 states:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Florida
  • Georgia
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Minnesota
  • Mississippi
  • Missouri
  • North Dakota
  • Oregon
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming

There is pending legislation to allow drivers to show digital proof of insurance in some additional states not listed above, but in others, digital cards haven’t been recognized as valid. So, you could still find yourself facing a ticket and needing to pay a fine or go to court, even if you have an insurance app. Phillips recommends checking in with your insurance agent about the regulations in your state before going out on the road without a physical card. 

While it would be nice to stop worrying about your paper proof of insurance card, remember that even if you are in an approved state, you never know if your phone’s battery might die at just the wrong time.

To play it safe, keep the physical insurance card in your wallet or car dashboard, but download your insurance company’s smartphone app so that you’ll have a digital card as a backup, too.

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