California moves closer to pay-by-the-mile auto insurance

[Denny Crane]

http://www.mcclatchydc.com/256/story/78224.html

California moves closer to pay-by-the-mile auto insurance

Jim Sanders | The Sacramento Bee

last updated: November 03, 2009 06:53:39 AM

Car insurance by the tankful?

Not quite, but California moved a step closer last month to pay-as-you-drive policies that could allow motorists to buy insurance like they do gasoline — a little at a time.

Insurance Commissioner Steve Poizner released regulations permitting and authorizing mileage verification for pay-as-you-drive, without dictating what form such plans must take.

The goal is to use per-mile pricing to entice Californians not to drive so much, thus easing air pollution, relieving traffic congestion and lowering the number of traffic collisions.

A first-of-its-kind plan is MileMeter, available only in Texas, which last year began offering six-month policies with chunks of insured miles ranging from 1,000 to 6,000 miles. When the "tank" runs dry, motorists buy more.

To read the complete article, visit www.sacbee.com.

 

[Denny Crane]

John Garamendi used to be the insurance commissioner for California years ago. Back then, he proposed a small gas tax (per gallon) to pay for govt. no-fault auto insurance.

I liked the plan back then and think it's still a good idea. Obviously it depends on how much the tax is, though.

The people who drive the most are generally the biggest risk, not in all cases. Just by being on the road there's some small risk, the more time on the road, the more that risk.

EDIT: Garamendi is likely to be the next mayor of SF.

 

[elcap15]

I am going to have to go ahead and disagree with you there. I dont think there is any correlation between mileage driven and riskiness.

Think of how little old people drive and how risky they are behind the wheel.

Im pretty sure I read somewhere that most accidents happen close to home anyway.

Furthermore, people who drive more consume more gasoline. Since gas is taxed per gallon, they are paying more in taxes already.

 

[blazerboy30]

You're being sarcastic, right? If not...

I am going to have to go ahead and disagree with you there. I dont think there is any correlation between mileage driven and riskiness.

Swap "riskiness" for "total risk", and there definitely will be a correlation.

Think of how little old people drive and how risky they are behind the wheel.

Now you have introduced a new variable, age. Take the same person and have them drive 10 miles per year, versus 10k miles per year. In which scenario are they more likely to be in an accident? Clearly, there is more "risk" if the person drives 10k miles per year instead of 10.

Im pretty sure I read somewhere that most accidents happen close to home anyway.

That is because people drive the majority of their mileage close to home. Again, more miles driven will increase the overall risk, or chance of accident.

Furthermore, people who drive more consume more gasoline. Since gas is taxed per gallon, they are paying more in taxes already.

I agree. One would hope that this tax would be used to decrease other existing taxes, but I think we all know that isn't going to happen. We'll just pay more taxes.

 

[Denny Crane]

I agree. One would hope that this tax would be used to decrease other existing taxes, but I think we all know that isn't going to happen. We'll just pay more taxes.

You'd pay more taxes on gas, but you'd not have to buy auto insurance.

 

[Shapecity]

If they really want less cars on the road make the gas $5.00 per gallon again. I prefer higher gas than this pay per mileage insurance non-sense. Most people in Southern California don't commute very far mileage wise. The problem is too many vehicles on the road and terrible reaction time to clearing out accidents. We learned two summers ago that $5.00 per gallon gas made people think twice about driving.

 

[Buzz Killington]

Don't they ask you how much you drive per year? I always lie and way undershoot it, thought that affected insurance rates

If they do this, they should also charge for what freeways you travel on.....the 110 near downtown is psycho!

 

[Denny Crane]

$5 gas seems like a good idea, depending on where you live. It certainly would make the cost of food higher, if it's trucked to the store near you. It would really hurt tourist destinations where people like to drive...

 

[Buzz Killington]

I agree. Like I've stated previously, higher gas prices will cause consumers to be more fuel efficient if that's their main objective. Perhaps make a passenger vehicle gas tax that does not apply to commercial vessels and transport.

 

[STOMP]

$5 gas seems like a good idea, depending on where you live. It certainly would make the cost of food higher, if it's trucked to the store near you.

That would seem like an easy enough issue to sidestep through tax breaks/writeoffs for those businesses affected... whether or not people with long commutes would qualify for similar tax breaks could be dealt with separately as well.

STOMP

 

[Shapecity]

$5 gas seems like a good idea, depending on where you live. It certainly would make the cost of food higher, if it's trucked to the store near you. It would really hurt tourist destinations where people like to drive...

Good then people will eat less and/or waste less food. I don't think tourist destinations will be effected. The US dollar is so weak right now a few bucks more won't cause any tourists to flinch.

 

[Denny Crane]

Good then people will eat less and/or waste less food. I don't think tourist destinations will be effected. The US dollar is so weak right now a few bucks more won't cause any tourists to flinch.

I was thinking more like people driving from LA to Vegas. Or from nearby states to Disneyland.

 

[Shapecity]

I was thinking more like people driving from LA to Vegas. Or from nearby states to Disneyland.

People in LA should be flying to Vegas. I never understood why anyone would drive there when it's a 45 minute flight. The airlines could use the extra business too! Southwest always has those $39.00 internet specials. Not to mention a lot of casinos are flying people out to get them on the gambling tables.

 

[BLAZER PROPHET]

$5 gas seems like a good idea, depending on where you live. It certainly would make the cost of food higher, if it's trucked to the store near you. It would really hurt tourist destinations where people like to drive...

Why not keep truck diesel at $2/gallon to keep food low and raise gas to $5/gallon?

 

[Shapecity]

Why not keep truck diesel at $2/gallon to keep food low and raise gas to $5/gallon?

That's a great idea actually.

 

[Denny Crane]

People in LA should be flying to Vegas. I never understood why anyone would drive there when it's a 45 minute flight. The airlines could use the extra business too! Southwest always has those $39.00 internet specials. Not to mention a lot of casinos are flying people out to get them on the gambling tables.

When I lived in Vegas, I saw license plates on cars from probably all 50 states.

Does Southwest have a flight to the grand canyon?

Ford has a car that gets 60MPG on diesel fuel, but it's against the law to sell it here, especially California.

 

[Buzz Killington]

People in LA should be flying to Vegas. I never understood why anyone would drive there when it's a 45 minute flight. The airlines could use the extra business too! Southwest always has those $39.00 internet specials. Not to mention a lot of casinos are flying people out to get them on the gambling tables.

Because if you go in a car of 5 people its like 20 bucks each in gas. When you factor wait times at the airport, taxis, etc, its about break even. Driving is slightly longer but if someone else is driving you just knock out. We drove to vegas in a group when gas was about $4.60 a gallon, in the desert it was over $5 I think...but we took a friend who had a Prius so it was all good.

For me, I live by LAX so I cab it to the airport. Its $15 to the airport, then wait an hour for the flight, a 40 minute flight, a $15 cab ride from Vegas airport to the hotel. Plus its about $150 to fly round trip on the weekends...so flying is about $200-250 for a Friday-Sunday trip. multiply by 4 people, you'll see that driving is a lot cheaper.

I've driven between LA and Vegas at least 100 times...I used to go every month, its not that big of a deal.



Oh yeah, if you drive you can bring drugs too.

 

[Shapecity]

Because if you go in a car of 5 people its like 20 bucks each in gas. When you factor wait times at the airport, taxis, etc, its about break even. Driving is slightly longer but if someone else is driving you just knock out. We drove to vegas in a group when gas was about $4.60 a gallon, in the desert it was over $5 I think...but we took a friend who had a Prius so it was all good.

For me, I live by LAX so I cab it to the airport. Its $15 to the airport, then wait an hour for the flight, a 40 minute flight, a $15 cab ride from Vegas airport to the hotel. Plus its about $150 to fly round trip on the weekends...so flying is about $200-250 for a Friday-Sunday trip. multiply by 4 people, you'll see that driving is a lot cheaper.

I've driven between LA and Vegas at least 100 times...I used to go every month, its not that big of a deal.



Oh yeah, if you drive you can bring drugs too.

That's the only point I'd concede.

 

[MARIS61]

If the goal is to limit driving, STOP BUILDING AND REPAIRING ROADS! (and stop taxing us for them)

If you keep spending tax $ on more roads, then don't tax me again because I'm using them.

 

[barfo]

Oh yeah, if you drive you can bring drugs too.

We were somewhere around Barstow on the edge of the desert when the drugs began to take hold.

barfo

 

[barfo]

The goal is to use per-mile pricing to entice Californians not to drive so much, thus easing air pollution, relieving traffic congestion and lowering the number of traffic collisions.

This seems like a great idea to me.
Especially since my commute is very short

barfo

 

[mook]

Why should good drivers subsidize bad drivers? I mean, if you are a drunk and get in two or three collisions, in the current system your liability insurance goes through the roof (and rightly so).

Under a gas tax system, you won't pay a penny more for car insurance after your third wreck than you did before your first one. Instead, everybody else's rates go slightly up in the form of increased gas tax to pay for your bad driving.

I'm all for public health insurance because so much more of bad health is the luck of the draw. A major illness can happen to anyone. Besides, the right to live is a fundamental right in our country (ie, "life, liberty, pursuit of happiness...").

How you handle yourself behind the wheel seems much more directly correlated to how likely you are to get in a collision. It's much less random. And there is no fundamental right for people to drive that is furthered with an insurance tax. If you tend to wreck other people's cars in collisions, you should pay more in insurance. If you don't, you should pay less.

 

[barfo]

Why should good drivers subsidize bad drivers? I mean, if you are a drunk and get in two or three collisions, in the current system your liability insurance goes through the roof (and rightly so).

Under a gas tax system, you won't pay a penny more for car insurance after your third wreck than you did before your first one. Instead, everybody else's rates go slightly up in the form of increased gas tax to pay for your bad driving.

I'm all for public health insurance because so much more of bad health is the luck of the draw. A major illness can happen to anyone. Besides, the right to live is a fundamental right in our country (ie, "life, liberty, pursuit of happiness...").

How you handle yourself behind the wheel seems much more directly correlated to how likely you are to get in a collision. It's much less random. And there is no fundamental right for people to drive that is furthered with an insurance tax. If you tend to wreck other people's cars in collisions, you should pay more in insurance. If you don't, you should pay less.

Is anyone proposing a gas tax insurance system though? I thought that was just an analogy. The insurance is charged by the mile, just like gas tax, but that doesn't mean pay at the pump, and so it doesn't mean everyone pays the same rate per mile.

barfo

 

[mook]

I would add that I could see how a gas tax to cover the illegally uninsured driver would make sense. So you are still legally obligated to carry liability insurance, but if somebody hits you and that guy doesn't have liability insurance, you can still get restitution from the state.

Hmm. Come to think of it, even there it doesn't really make sense. Why not just have the state takes all citation fees paid by people who are driving without liability insurance and put it in a special fund? That fund would then go to paying for people who are victimized by people without liability insurance.

Anyway, I've always been in favor of a gas tax. Gas should be more expensive for environmental and national security reasons. I'd like to see a "floor" built in where the tax artificially always prices gas at a minimum of $3.00 this year, $3.25 next year, $3.50 the year after that, etc. If the cost of crude suddenly skyrockets, the tax is automatically cut so that the consumer doesn't see a big spike at the pump. A steadily, slowly increasing gas price would tell the market that 14 mpg gas guzzlers are bad investments today, tomorrow and forever, without being a sudden shock.

 

[mook]

Is anyone proposing a gas tax insurance system though? I thought that was just an analogy. The insurance is charged by the mile, just like gas tax, but that doesn't mean pay at the pump, and so it doesn't mean everyone pays the same rate per mile.

barfo

doah! I misread it. Oh well.

Learn the thread and then post!

 

[Ed O]

I would love to pay for insurance by the mile. I drive about 20 miles a week and would presumably save a lot of money.

Ed O.

 

[Denny Crane]

John Garamendi used to be the insurance commissioner for California years ago. Back then, he proposed a small gas tax (per gallon) to pay for govt. no-fault auto insurance.

I liked the plan back then and think it's still a good idea. Obviously it depends on how much the tax is, though.

The people who drive the most are generally the biggest risk, not in all cases. Just by being on the road there's some small risk, the more time on the road, the more that risk.

EDIT: Garamendi is likely to be the next mayor of SF.

There you go, mook.