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Editorial: Driving less; saving cash
Pay-as-you-drive a win-win
STORY TOOLS 
More from OpinionIt's an option that makes lots of dollars and sense for car-loving Californians.
Wednesday, state Insurance Commissioner Steve Poizner unveiled a voluntary "pay-as-you drive" proposal that will give motorists the option of paying for their auto insurance based partly on the total number of miles they drive each year.
The incentive is this: If you drive less, you will be rewarded with cheaper auto insurance.
It only makes sense that one motorist, who drives 10,000 miles a year, pay less than a driver, who puts, say, 40,000 or 50,000 miles each year on the odometer.
It's a win-win plan that will cut harmful tailpipe emissions, save gas, ease gridlock and lower those dreaded insurance premiums.
This type of auto insurance — already offered to drivers in 34 states, and in Canada, Japan and parts of Europe — has proved its worth by reducing auto-insurance premiums for those motorists.
Here in California, the Brookings Institution estimates nearly two-thirds of the state's drivers would benefit from pay-as-you-drive. In fact, the Washington-based think tank says a typical California family would save $276 annually per vehicle.
What's more, many major insurance companies favor the pay-as-you-drive option. They see it as an innovative, customer-oriented way to increase the number of polices they write and as a way to reduce costly auto claims.
Under Mr. Poizner's proposal, expected to take effect next year, insurance companies would be allowed to track driving mileage through odometer readings, maintenance records or wireless devices, such as General Motors' OnStar program, placed in vehicles.
Currently, insurance premiums are based on how many miles motorists drive a year. Provided by motorists, these mileage estimates, which are usually inaccurate, lead to higher rates and do little to inspire motorists to drive less. However, the cash savings to be realized through accurate mileage readings should serve to reduce both.
As expected, environmentalists praise the pay-as-you-drive option for its pollution-reducing potential. However, watchdog groups remain concerned about privacy issues. And, rightly so.
A mileage-based bill, which would have allowed insurers to track California motorists' locations and how they drive, was recently withdrawn from the state Senate. The bill was being pushed by insurance companies.
Such an invasion of privacy would have been outrageous and the bill's author was wise to pull it in favor of Mr. Poizner's proposal, which prohibits any such privacy intrusions by insurance companies.
The insurance commissioner did all California motorists a favor by green-lighting this voluntary pay-as-you-drive option.
Posted by victoroz on September 2, 2008 at 6:14 a.m. (Suggest removal)
Re Editorial: Driving Less, Saving Cash
The simplest and least invasive way of reducing insurance premiums is a Pay-at-the Pump policy. I can hear the groaning now, but let's look at the logic and convenience of this policy.
Since California requires all drivers to have vehicle insurance and many don't, Pay-at-the Pump would ensure that everyone would be covered, including visitors to our state and those driving rentals. The era of the underinsured and uninsured driver would be over!
Drive less, pay less...it's that simple! All drivers would have a minimum amount of coverage and would pay for that coverage via a surcharge on every gallon of gas purchased. For those that require or desire additional coverage, supplemental insurance can be purchased separately. Those that drive more, pay more! Those that drive less, pay less!
No government or private entity has to track your number of miles driven nor where or when you made gasoline purchases. Your privacy is assured since your premium is being paid with every gallon purchased. Keep in mind that the insurance premiums you pay now will either be eliminated or greatly reduced.
Better minds than mine can certainly provide the figures required to derive a "fair" insurance surcharge at the pump as well as other details of a plan such as this. But, imagine never having to fear a large insurance premium every six months or so since your always paid up via the pump.
Victor Ortiz
2219 E. Thousand Oaks Blvd
Thousand Oaks, CA 91362
805 701 3292
Posted by 5thGenerationOxnard on September 2, 2008 at 2:05 p.m. (Suggest removal)
So, if I drive a brand new Porsche I pay less (potentially much less) than someone driving an old Suburban. And I also pay no penalty for HOW I drive as a bad record will no longer mean higher premiums. Basic concept is good but don't think it works out too well in real life.
Posted by nelsonknows on September 2, 2008 at 10:21 p.m. (Suggest removal)
Government and privacy are a oxymoron. I, (along with over a million U.S. Citizens), had my telephones tapped for six years under the Clinton Administration solely because I am a gun owner. It wasn't until G.W. Bush took office that this invasion to my rights was stopped. (I even received a letter from G.W. Bush to apologize for this intrusion), so NO THANK YOU concerning more government interference. As for insurance, that should be between my insurance company and me.
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