Image: Woman with license © Blend Images, SuperStock

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, the director of personal lines policy at the Property Casualty Insurers Association of America.

There's an app for that

Some states are starting to change things. Arizona and Idaho now allow drivers to show proof of insurance with a smartphone app or PDF copy of their policy. A committee in the California Assembly recently approved a bill allowing electronic proof of insurance.

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 handy.

Even in states that don't specifically allow it, virtual proof of insurance could prove convenient, 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 says.

"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 probably uninsured.

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, a 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 at any hour 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, Real Time Verification and Web Services -- Alabama, Montana, Oklahoma, Nevada, South Carolina, Texas, Wyoming and Washington, D.C., already have real-time data or soon will. Idaho and Utah have recently passed laws to implement it, and Mississippi is expected to.

"From a technical standpoint, it's the smartest way," Hageli says.

The new verification systems arrive as the rate of uninsured motorists has reached 13.8% nationwide, according to the Insurance Research Council. State legislatures are responding by deploying get-tough measures, including fines and even car impounding for drivers defying the law.

Lawmakers in Tennessee have even proposed mandatory arrest for driving without proof of insurance in cases of serious injury.

 

Suggestions for further improvements

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.

First, Indiana has a "brilliant" program that focuses on those most likely to re-offend, he says. After those drivers prove they have insurance so their license isn't revoked, the state randomly checks 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," Hageli says.

He also suggests giving police departments more money so 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 the court appearance.

Click here to become a fan of MSN Money on Facebook

More from CarInsurance.com: