Sunday, January 08, 2006

WorldChanging - Pay-Per-Mile Car Insurance

I like this idea! Pay-Per-Mile Car Insurance: It's Coming.

How can you reward yourself for driving less? Or how can you make the costs people pay more closely match their impact on the world?

Car costs are largely divorced from car usage. Sure, you pay for gas as you drive, but for most cars, the average driver pays about as much for insurance as they do for gas; then there's the car's purchase price and maintenance. [...], insurance means being stuck with a fixed cost, no matter how much or how little you drive.

Well, not anymore. At least not in some places. Pay-Per-Mile, or Pay-As-You-Drive ('PAYD') insurance means that your insurance payments are based on how much you drive. Such plans have cropped up in places like the UK, Japan, and even a few US states.
This could have a big impact. I know I really want to join City Car Share and get down to just one car, using transit to get to work. But the economics don't yet work. (And might not until I'm working in the city.) PAYD insurance could change the economics for car sharing in a big way.

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