Nationwide Insurance has entered the testing phase of a partnership with RiskBlock, a blockchain framework designed for the risk management and insurance industries. The partnership between Nationwide and Riskblock, called the “RiskBlock Alliance,” is currently in beta mode; both parties plan to expand the partnership in 2018.
The point of RiskBlock is not simply to allow law enforcement to more easily obtain proof of insurance coverage from drivers. Since it utilizes a blockchain framework that is nearly impossible to manipulate, RiskBlock is meant to eliminate insurance fraud altogether.
Many states already allow law enforcement to check insurance information from a mobile app or through email. Through blockchain technology, it will become impossible for drivers to tamper with that information.
Electronic insurance proof across the United States
Most states have already streamlined the traffic stop process by allowing drivers to present electronic proof of insurance on smartphones, for example through the insurer’s mobile app, an electronic version of an insurance card, or another certified method that can take the place of a paper insurance card (check your individual state laws for guidance).
Currently, only New Hampshire, Massachusetts, Connecticut, the District of Columbia, and New Mexico still require physical proof of insurance. Acceptability of electronic proof is fairly new; as recently as 2011, no state allowed electronic proof of insurance during a traffic stop.
“It’s surprising to me that states like New Mexico still require paper insurance card proof,” said Philadelphia car accident lawyer Jeffrey Reiff. “Considering the login process, the app download, and the availability of social security numbers and photos, electronic proof is usually more fraud-resistant that paper.”
Driver-to-driver insurance verification through blockchain technology
While Nationwide’s partnership with RiskBlock will help reduce fraud, the real benefit to drivers will come from the ability to more easily share insurance information with other drivers after an accident.
Exchanging carrier information, phone numbers, and cards is inefficient, unreliable, and fraud-prone,” adds attorney Darwin Overson. “There’s no reason modern drivers should have to do more than scan a QR code with another driver or enter a verification code.”
Blockchain may reduce insurance business costs exponentially
Two of the main business expenses for carriers like Nationwide – combating fraud and paying staff to answer verification questions by phone – could be nearly eliminated by blockchain technology.
By making it possible for law enforcement to immediately and accurately verify insurance information, and by simplifying the process with which drivers can exchange insurance “cards,” Nationwide can allocate funds to areas away from the call center.
And with an immutable blockchain framework in place (and with police looking at only electronic records), drivers won’t be able to falsify their insurance information.
Law enforcement isn’t the only part of government leaning on blockchain’s integrity. Learn more about Running Future Cities on Blockchain.