CA has approved "Pay by the Mile" auto insurance

http://www.sacbee.com/politics/story/2300940.html

Set to roll out late this year, early next year - this may be great news for low mileage or multicar drivers.

SUCKISSTAPLES said: http://www.sacbee.com/politics/story/2300940.html

Set to roll out late this year, early next year - this may be great news for low mileage or multicar drivers.

Unless you dislike the idea of having mandatory GPS tracking for cars in half a decade as people are forced from ordinary insurance to pay-as-you-drive insurance.

Oops! I forgot, insurance companies are the salt of the earth. Government is the cause of all problems.

I hope that is not brought over to my state, I put almost 30k miles on my car last year and am on track to do the same this year.

dzyr4tt said: Damn.. I hope you are not in my state.. as I might be indirectly paying for your premium..

I put only 5000 on my daily driver ( I take the train to work ).....and my other car only rolled abt 1200 miles... He's only costing you something if he gets into or causes an accident.

owenscott said: SUCKISSTAPLES said: http://www.sacbee.com/politics/story/2300940.html

Set to roll out late this year, early next year - this may be great news for low mileage or multicar drivers.

Do you really think they would do this if it was GOOD for the consumers?

It is possible for something to be good for a company and the consumer, believe it or not. As for the paranoid slippery-slope folks, I wouldn't worry too much. There's more then enough of you to ensure we will always have flat-rate insurance too.

The goal is to use per-mile pricing to entice Californians not to drive so much, ....

This is not the way to make it happen. If going from $1 a gallon to $4 didn't do it this surely won't.

Sure would be nice though...

owenscott said:

Do you really think they would do this if it was GOOD for the consumers?

Do you really think they would do this if it was BAD for the consumers? The purpose of businesses is to generate value. Profit is the metric of the value generated. If consumers are worse off, then value is being destroyed and the business will run at a loss.

The only way this could be profitable to a business if if there was a monopoly such that it forced consumers to enter into a worse agreement then they are currently in now.

tripleB said:

The only way this could be profitable to a business if if there was a monopoly such that it forced consumers to enter into a worse agreement then they are currently in now.
Monopoly isn't the only way to force consumers buy things they don't want. There is also government.
In most states car insurance consumer does not have any say in this, and will just have to pay for whatever cappry options are forced upon him

If this is the case.... zero miles driven= free insurance????

well anyhow, time to unplug the odometer..

ardentazn said: If this is the case.... zero miles driven= free insurance????

well anyhow, time to unplug the odometer..I am sure theres going to be a baseline minimum premium since the car is still exposed to theft/damage even when not driven.

Milemeter , the current leader in the pay per mile insurance industry, has ppl buy their insurance in 1000 mile blocks, so a very little used car will still need to have a 1000 mile plan

I live in CA and have been paying based on the mileage we put on our cars. Each year they send a request for our current mileage and then bill us based on the prior year's mileage. I don't see this being much different.

JM80 said: That is an incorrect assumption, as highway miles are significantly lower risk then city miles.
I would like to see a source for this. I will give you that there may be more accidents per city mile than highway mile, but the worst accidents I have seen have been on the highway. I drove on a highway in Atlanta where I would pass accidents where people were getting loaded on ambulances almost every other day and a few times I witnessed rescue people using the jaws of life. I never saw these level of accidents with injury and multiple cars on normal roads like I did on the highway. So maybe your risk of accident is lower is lower, but the fact that one accident could cost 2-10X what it cost on the city roads it might be more risky in terms of insurance payout.

JM80 said: Also, generally the more experience you have the less risk you are at for getting into accidents. That is why pilots are charged based on their hours of operation in class. In my opinion you driving less then 7,000 miles a year would put you in a higher risk category, especially since you live in a metro area; as opposed to someone that lives in a rural area that has a low frequency of accidents, and who drives 3x your miles.
No one is saying only pay per mile regardless of other factors. Currently my insurance company knows how long I have been a licensed driver and factors that into my quote. Also my home location is factored into the quote and if you live in a metro area you generally pay more. There is no reason these factors can not be included in the rate charged per mile. So if you have a better risk profile then you can pay less per mile than me.

SUCKISSTAPLES said: EcoTony said: I live in CA and have been paying based on the mileage we put on our cars. Each year they send a request for our current mileage and then bill us based on the prior year's mileage. I don't see this being much different. Yes they have used mileage based pricing, but not pay per mile. It will really make a difference for very low mileage driven cars.

If we can truly buy insurance in blocks of 1000 or less, the costs should be less than even the lowest premium on a standard policy... we should start seeing premiums similar to collector car policies of $100 or less, but for regular cars
I think the issue is that it used to be difficult to enforce. So my insurance policy says something about "this vehicle is driven more than 7500 miles annually". I guess if I had a weekend car that I drove less than that I could get a small discount. But think about it from the insurance company perspective. You say your car is only driven 10,000 miles annually. How do you prove that? Sure you can sign some statement, but what if you drove 12,000 miles one year and the insurance company tried to deny your claim? Everyone would be up in arms claiming how unfair they were being and you only put those 2,000 miles on to visit your dying grandmother, etc. In order for a more distance-based premium to be charged a more real-time monitoring of milage is required.

owenscott said: I now have to drive farther away to purchase the same item rather than support some stores outrageous political action or belief.

By driving further away, you are purchasing more gas, which supports Middle Eastern countries, which support terrorism. Why do you support terrorism?

owenscott said: Do you really think they would do this if it was GOOD for the consumers?

AAA insurance already charges you by blocks of miles. I am on a 5000 mile plan. It is good for me.

It will be good for freeway congestion... It will be good for the environment...

owenscott said: ahh soo true .... it makes perfect sense till the govt gets involved. Slipper slope for the govt to make it almost mandatory. They wont come out and say that ... it will be more of a "Tax" you higher depending on the type of insurance you choose. Per mile gets taxed less if at all.

You keep the govt out of your recently learned economics definition and then it might be true. Are you blind to the fact that some businesses will do what ever their little political beliefs tell them to do without regards to "value." Monopoly's be damned, they can have an impact without being a monopoly. I now have to drive farther away to purchase the same item rather than support some stores outrageous political action or belief.
Wow dude. In this case we are talking about a relaxing of government regulation to allow a new form of insurance to be sold along side the current form of insurance. To use the government to prohibit this type of insurance from being sold would go counter to the less government philosophy that many on the right support. Even Ron Paul would support this idea of car insurance since he believes in less government involvement. So what if this makes some environmental hippies happy? You can also be happy that with a new product available in the marketplace capitalism will be greater and government intervention less. Despite what you see on the cable news networks it is not always right vs. left--just because the left like something doesn't mean the right won't like it too.

biomedeng said: I would like to see a source for this. I will give you that there may be more accidents per city mile than highway mile, but the worst accidents I have seen have been on the highway. I drove on a highway in Atlanta where I would pass accidents where people were getting loaded on ambulances almost every other day and a few times I witnessed rescue people using the jaws of life. I never saw these level of accidents with injury and multiple cars on normal roads like I did on the highway. So maybe your risk of accident is lower is lower, but the fact that one accident could cost 2-10X what it cost on the city roads it might be more risky in terms of insurance payout.

Seriously? Look up the rates to insure a car in any major metropoulos, and then compare that to a rural area in the state. Guess what the rural areas will almost always be significantly cheaper. You yourself included the key word about the accidents you saw "a highway in ATLANTA". The comment I was responding to was saying that a city driver was subsidizing a rural driver, and I said that was B.S.

tripleB said: owenscott said: I now have to drive farther away to purchase the same item rather than support some stores outrageous political action or belief.

By driving further away, you are purchasing more gas, which supports Middle Eastern countries, which support terrorism. Why do you support terrorism?

Play your funny little games ... don't take it out of context.

dzyr4tt said:

hehehe...

well...since he is driving that much, the risk of getting into or causing an accident are more and increases his risk profile...and hence I am balancing out that risk...

I am actually looking into Progressive thats offering the same...

Yes and no. I put on an average of 20K miles every year being in sales for 25+ years with zero speeding ticket. Another colleague would get at least a ticket seemingly every other month. Our employer made my colleague attended a weekend driving school or else. It's all depends on your driving style.

Progressive offered me a $5 discount if I would install a device in my car which I have to upload information to them regularly. I declined the offer because that is a lot of hassle to save about $5 every six months and am not interested in sharing that much info with them. They have been a great company to work with otherwise.

Dealguy123 said: Only "problem" I see with pay per mile is that the folks driving 20k+ miles per year are going to have their premium hiked, eventually. Why? Because the pay per mile folks will be bringing in less revenue (and likely profit), so in order to keep profits the same, they will raise rates. Personally, I'm "ok" with this, as there's no such thing as a free lunch, and someone is ultimately paying for it. I view these pay per mile policies as insurance companies merely being able to more effectively price risk (in a non-intrusive way), which is a win-win in my book. Of course, the folks who do drive 60+ miles per way each day to work will not be thrilled.

I'm jealous of you guys who don't have personal property tax for your vehicle. Here in VA you're paying for your car if you're not even driving it..

I think this is a bad way to price risk. I remember they use to tell us that most accidents happen within 5 miles from home. You don't put on a lot of miles just driving near your house...

Yeah, the police can collect any evidence they want, as long as they have a valid warrant for it.

You are not required to tell them about the existence of the device. And you'd be well advised to keep your trap shut about it and anything else as well.