California Moves Closer to Insurance by the Mile for Drivers
November 10, 2009 10:57 AM
comment(s) - last by
Watchdog group says new rules give insurance companies all the power
In many states in America, auto insurance is a requirement. This is a good thing since that means any accidents that happen will be sure to have coverage by both drivers. The problem according to some drivers and insurance companies is that drivers that drive more miles and have a higher chance of accidents pay the same amount as drivers who drive significantly less.
California is closer to allowing insurance companies to
sell insurance by the mile
to drivers. This would mean that drivers who drive more would pay more than others would. The Sacramento Bee reports that Insurance Commissioner Steve Poizner has released regulations that will permit and authorizes insurance companies to verify mileage as part of insurance plans based on miles driven.
The ultimate goal of the new insurance plan in California isn’t to save drivers money, but to encourage people to drive less. Less driving will reduce the pollution in California, the number of accidents and ease traffic congestion according to lawmakers. California isn't the only state with insurance plans based on miles driven. Texas has such plans provided by a company called MileMeter that offers six month policies with chunks of mileage ranging from 1,000 miles to 6,000 miles.
MileMeter CEO Chris Gay said, "We absolutely anticipate coming to California." He continued, "Our take is that half the market out there is being overcharged and underserved – and that's who we aim to address."
Conventional mileage based policies would reportedly take an estimate of projected mileage for a year and then refund or bill the driver depending on the actual miles driven. Mileage could be verified in several ways such as at smog check stations, DMV records, and via electronic devices attached to the car.
The fear with mileage based insurance plans is that there will be a push to charge drivers to drive longer distances each year more money in insurance rates. However, there is reportedly no plan to do that at this time.
Two thirds of homes in the country would save about $270 per year per car with mileage based plans according to a study from Brookings. However, Carmen Balber from Consumer Watchdog says that the new policies cater to the insurance industry and don’t require the premiums to reduce when driving does.
"I think the regulations were drafted to guarantee that insurers win, because they were left with all of the choice," Balber said.
Insurance companies are taking the new proposal seriously and Michael Gunning, VP of the Personal Insurance Federation of California said, "Given the competitive nature of the marketplace, I think this is going to be a selling point for companies."
The members of the federation write more than 50% of all auto policies in California. Drivers concerned about their privacy with policies requiring a device be connected to the car need not be concerned according to lawmakers. Regulations prevent the devices from recording location information about the vehicle. However, Balber maintains that the mileage devices give insurance companies a foot in the door to push for the right to collect other data. Future policies could possibly rate drivers higher if they drive in high crime areas frequently.
There are also proposals in the works that would
regulate gas taxes on a per-mile basis
using GPS tracking.
This article is over a month old, voting and posting comments is disabled
RE: This is new?
11/10/2009 1:07:26 PM
I don't see anyone "mooching" or "benefiting" from any subsidies here.
The bottom line is that there are many insurance companies out there, so competition is alive and well. You choose who your carrier is. You choose to go with them based on the rate and services they offer. I don't see any conservatives setting the insurance premium rates for themselves, do you?
We are not against any forms of new ideas or methods for competition. What we are against is a new method being forced by legislation to encourage you to drive less. That is nothing short of social manipulation by legislation. If they want to offer this service as well as normal insurance methods - then go for it. But for the government to pass a law requiring me to put some kind of GPS device in my car to track my miles, where I go, etc .... and then charge my insurance based on it and potentially my gasoline taxes based on it...well then I have a big problem with it.
RE: This is new?
11/10/2009 2:25:33 PM
Did you read this part of the article:
California is closer to allowing insurance companies to sell insurance by the mile to drivers. This would mean that drivers who drive more would pay more than others would. The Sacramento Bee reports that Insurance Commissioner Steve Poizner has released regulations that will permit and authorizes insurance companies to verify mileage as part of insurance plans based on miles driven.
The legislation is merely
PAYD insurance plans with mileage verification. What else am I supposed to think when people are against this? AFAICS they don't want to pay the true cost of their mileage. There is no forcing of anything here.
If many people don't want data tracking devices, then competition will provide insurance without mileage verification, just like prepaid per-minute cell plans haven't replaced monthly plans. If/when low mileage drivers with lower claims leave them, though, they will jack up rates to stay in business, but that's the free market in action.
Regarding subsidies, read this economically focused article that mostly steers clear of environmental aspects:
"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs
Proposed 2020 By-the-Mile Road Tax Set to Raise Taxes on Hybrids, EVs
July 2, 2009, 11:18 AM
Study Predicts Self-Driving Vehicles Could Rake in Billions
March 6, 2015, 8:34 AM
Dual-Motor Tesla Model S P85D's "Insane Mode" Shocks Passengers
January 28, 2015, 11:18 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
BMW Testing Tech to Allow Users to Auto-Park, Summon Cars Via Smartwatch
December 16, 2014, 9:30 AM
Lamborghini Offers Up $6,000 Leather-Bound Android Smartphone
December 12, 2014, 3:12 PM
Quick Note: GM Teases Next Generation Chevrolet Volt
November 20, 2014, 3:26 PM
Most Popular Articles
Windows 10 Build 10056 -- What's New in the Latest Leak
April 13, 2015, 10:38 PM
Tech's Biggest Loser on Tax Day: eBay Pays Nearly 99 Percent Tax Rate
April 15, 2015, 3:28 PM
Sharp Unveils World's First "4K" Phone Display at Mind-Boggling 806 PPI
April 13, 2015, 11:24 AM
Editorial: TinEye is an Essential Search Engine That Too Few Know About
April 14, 2015, 10:58 PM
Mathematician's Sociological Formulation May Explain the "Hipster Paradox"
April 14, 2015, 1:13 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information