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: Simple Test
11/10/2009 1:50:06 PM
Well, I guess we will just have to get rid of this corrupt system one way or another.
"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
Proposed 2020 By-the-Mile Road Tax Set to Raise Taxes on Hybrids, EVs
July 2, 2009, 11:18 AM
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
Audi is Latest to Step Into the Hydrogen Game, Delivers A7 Sportback h-tron quattro
November 19, 2014, 1:41 PM
Toyota’s Mirai Hydrogen Fuel Cell Vehicle Priced from $57,500 in the U.S.
November 18, 2014, 10:23 AM
Honda Still Pushing Hydrogen, Introduces FCV Fuel Cell Concept
November 17, 2014, 8:27 AM
Most Popular Articles
Android-Powered BLU Studio 7.0 Claims to be the "World's Largest Smartphone"
December 19, 2014, 2:40 PM
Paramount Bans Team America Screenings, Cowers Submissively to North Korea
December 18, 2014, 10:26 PM
Miyamoto: Nintendo is Prepping Successor to Troubled Wii U
December 22, 2014, 6:28 PM
Amazon's Kindle Fire HDX 8.9 Drops to $299 (30 Percent Off) for a Day
December 22, 2014, 10:57 AM
News Corp's Fox is Terrified of North Korea, Kills Upcoming Steve Carell Film
December 18, 2014, 4:09 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 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information