Pay-per-mile car insurance might come to California
The idea of paying for your insurance by the mile is not new. MileMeter, in Texas, offers pay-as-you-drive (PAYD) rates and California has been using mileage brackets to set insurance rates for years. A new, more precise PAYD system is under discussion in California that would give people who drive less a financial incentive to do keep doing so – and maybe convince people on the fence to find an alternative when possible.
State Insurance Commissioner Steve Poizner recently issued regulations on what PAYD mileage verification plans could look like. It's likely that people with PAYD would think twice when getting behind the wheel and combine trips when possible. The Brookings Institution studied PAYD last year and found that driving would drop by eight percent if all U.S. drivers were under a PAYD system. Also, two-thirds of U.S. households would save an average of $270.
MileMeter is looking to expand to California, and MileMeter founder and CEO Chris Gay told the Sacramento Bee that, "Our take is that half the market out there is being overcharged and underserved – and that's who we aim to address." The bigger insurance companies are looking into PAYD, but have not yet decided to offer it in California. This is an idea that easy to implement and, in lieu of higher gasoline taxes, could have a dramatic impact.
[Source: Sacramento Bee via MMN]
Photo by Wouter Kiel. Licensed under Creative Commons license 2.0.
Reader Comments (Page 1 of 3)
Doug 8:30PM (11/09/2009)
Umm... no thanks.
Next thing will be to ding your insurance every time you exceed the speed limit. The government would get involved too and send you an automatic speeding ticket. Then they'll start taxing the distance you drive as well. Perhaps a veritable tax or insurance rate for the different places you may drive through at certain times of the day or night.
A good deal of the motivation for this is the political inability to raise the gas tax. How about we just kill the oil subsidies to begin with (or wean them in predicable way).
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polo 1:53AM (11/10/2009)
It wouldn't take more than 10 years for cash strapped cities to start using programs like this to get more money out of people.
Imagine an automatic fee for every mile over the speed limit you go. The GPS data shows you crossed as a light turned from yellow to red: automatic fine...AND you sped up to?? automatic triple surcharge. You were on X Street between 3-5pm...hmmm thats premium hours..automatic fee. Did you skip your last oil change? hmm that means you car's exhaust isn't so clean...automatic fee. You're car honked the horn in the downtown district...we have noise laws against that...automatic fee. Seems you're excessively changed lanes on Friday...automatic fee. There is also a surcharge for disputing the automatic fee - and good luck winning in court against a transponder.
Mark Kiernan 7:21AM (11/10/2009)
This isn't big government but big insurance. The insurance companies benefit from this not the government.
polo 1:09PM (11/10/2009)
"This isn't big government but big insurance. The insurance companies benefit from this not the government."
Mark, those same "fees" are even more likely be tacked on by insurance companies (who can entice customers which cheap "base" plans, and add fees as you go), and this program can easily be piggybacked off of for a gas tax. Either way its only a matter of time before transponder surveillance leads to automated fees and/or fines.
How;'d you like a police car (or insurance agent) to tail you every time you put the keys in the ignition? Thats what it will feel like.
KK 11:00AM (11/11/2009)
> How;'d you like a police car (or insurance agent) to
> tail you every time you put the keys in the ignition?
> Thats what it will feel like.
I would like that, actually. It would curb any temptation to drive fast or recklessly.
And I think everyone would drive MUCH more safely with such a system. If widely implemented, such a system would save thousands of lives every year (if not tens of thousands).
igotzzoom 8:45PM (11/09/2009)
Yeah, a little too big-brotherish for my comfort. Although, I do have a transponder and use toll roads, so same difference I suppose. If I could use my existing transponder for it, then I guess I could get used to it, as long as it didn't beep all the time.
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Geoff de Ruiter 8:48PM (11/09/2009)
Pay as you drive is awesome, there are so many benefits to it, seriously. I wish BC had it, and there was some talk of it.
And! if you drive backwards all the time they pay you, just like solar panels!
(that second one was a joke)
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polo 1:37AM (11/10/2009)
Eventually these same insurance companies will want that transponder to send them data on just how often you "cheat" the speed limit, how hard you hit the gas peddle, just how responsive you are to stop signs and yellow lights, and just how far you drive from the car in front of you.......
how would you like a police car to tail you every time you put the keys in the ignition? Thats what it will feel like. But in the end you'll probably save enough to buy a KFC family meal so I guess that'd be worth it?
Geoff de Ruiter 1:51AM (11/10/2009)
Wow dude, in BC the insurance company is a public company so the population owns it actually. Let them monitor me, I am a safe driver and I have no fear of my government because they are a the mercy of us. I am sorry you do not have the same thing.
I drive my truck once every 3 weeks or so for an outing or adventure like rock climbing or snorkeling/crab hunting. This would save me hundreds of dollars per year. I pay ~900/year and if I could do the pay per drive I would probably drop that down to like 200. And all being able to still drive my own vehicle whenever I want. That is equates to a few more KFC family meals that you estimated.
Boyprodigy1 9:37AM (11/10/2009)
And the conservatives in the States wonder why I want insurance companies to DIE!!!!!!
Don 9:01PM (11/09/2009)
That would be a great thing for me. I am at sea 180 days out of the year. I Fly to work and back where ever the boat is. When I am home I do some traveling but not more than 8000 miles a year in my Roadtrec. I really enjoy my time off no time clocks and no rushing to work everyday and No Commuting ever!!!!!
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KK 8:59PM (11/09/2009)
Sounds great, and it looks like it's already available in my state (AL) from Progressive - why didn't I know about this?? I only use the car once or twice a day, I never speed (seriously), and never drive after midnight. It's about time someone took that into account and gave me a discount rate.
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KK 9:00PM (11/09/2009)
er, I meant once or twice a week...
Boyprodigy1 9:40AM (11/10/2009)
What does driving after midnight have to do with it? I worked at a movie theater all throughout high school and thus ended up driving home almost every night, after midnight. I only ever saw one accident on the freeway which I drove after midnight and it was a motorcycle accident and there were no other cars involved. Is this one of those "scared of the dark" things?
KK 3:45PM (11/10/2009)
Don't ask me, Progressive lists that as one of the factors they consider. I presume it's because there is a disproportionate number of DUI-related accidents at night, though I imagine drowsiness is also a factor.
dgw3049 9:18PM (11/09/2009)
I'am all for it if for people like me, who have multiple vehicles wouldn't have to pay like we're driving each one of them full time its like legalized rape! I still remember what they were saying 30yrs when they got everybody to vote to make it against the law to drive without insurance, which was a good thing, but they said it was going to reduce rates and that is something that has never happened! I've only had 1 ticket in the last 20yrs and I pay more now, then when I was a stupid kid with 10 or more tickets on my record.
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Paul P. 9:40PM (11/09/2009)
I hope these systems also take into account where those miles are driven. Someone who lives in a rural area might drive a lot of miles a year, but has a low risk for accidents involving other drivers. On the other hand, someone who lives in the city might only put on a few miles a year, but those miles are very high risk.
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Sebastian 11:12PM (11/09/2009)
Great point. Not sure if they do or not.
Doug 10:01PM (11/09/2009)
I think the issue should be that all the "benefits" are possible with out all the big brother stuff.
I barely drive myself. Maybe twice a week and pay a low insurance rate because of that. I self report how much I drive in a 6 month period based on an off the top of my head estimate. I suppose they could just have me report the actual mileage on my odometer every 6 months.
Whether I live in a rural area should be factored in by looking at my zip code.
Whether I speed or not should be factored in by if I have any tickets. (I don't.)
I like the idea of having lots of data collected on my driving habits (since I'm a data geek), but only on the condition I get full access to that data and control over what specifically is collected and how it's used. It's bad news when the gov't or insurance agencies get involved.
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polo 1:47AM (11/10/2009)
"I like the idea of having lots of data collected on my driving habits (since I'm a data geek), but only on the condition I get full access to that data and control over what specifically is collected and how it's used."
Thats like me saying "I'd like the government to raise taxes on me but only on the condition I have full control over what programs that tax money will fund and an itemized list of what specific benefits I will get in return". NOT. GONNA. HAPPEN.