Pay-As-You-Drive Insurance Proposed in California
It’s an idea that’s always made sense to me: pay for auto insurance based on the miles you drive. Doing so ties fuel consumption to insurance costs - the more you drive, the more you pay for both fuel and insurance. It would make a lot of people think twice each time they started up their cars.
California’s Insurance Commissioner, Stever Poizner, wants to make this an option for the State’s drivers, citing environmental benefits. thirty-four other states already have such options available. According to a recent study by the Brookings Institution, the option would save most people money over current mileage estimation processes.
According to the Environmental Defense Fund, if 30% of California’s drivers opt for pay-as-you-go insurance, the state would avoid 55 million tons of carbon dioxide emissions between 2009 and 2020 - the equivalent of taking 10 million cars off of the road over that period. The Brookings Institution said that this option would reduce driving by 8%, cutting CO2 emissions by 2% and oil consumption by 4%. That doesn’t seem like a lot, but combined with other initiatives it would certainly make a dent in our problems. As a Los Angeleno, I also can’t help but salivate over the thought of reduced traffic.
Why not take it another step and move insurance payments to the pump, so that you pay for it along with your gas, by the gallon. That would even more definitively tie the costs together in real time, while reducing the number of unisured drivers on the road. No insurance, no gas. Just an idea…
Photo credit: mdxdt on Flickr through a Creative Commons license
