There is a proposal for Pay-As-You-Drive car insurance. Your insurance rate is per-mile, not per-6-month-term. This would decrease insurance rates of those who drive little (like yours truly) but raise them for those who drive long distances. It would of course motivate decreased driving, which is a good thing from the point of view of emissions, congestion, road maintenance, vehicle maintenance, etc. I support the idea, since it seems to cause more of the cost of an activity (driving) to be borne by those participating in the activity (drivers).

However, part of the rationale used in the proposal is rests on the assumption that people who drive more get into more accidents. This deserves consideration. Stated flatly like that I have no doubt it is true: the more you drive, the more exposure to the risk of driving you undergo, thus more accidents for longer drives. However, it’s also possible/likely that people who drive a lot are, by virtue of larger experience, better drivers than those who drive very little. Additionally, people who drive the longest distances tend to do so on cross-country highways, not in cities. The risks of highway driving are different from stop-and-go city traffic.

So, while long drivers are likely responsible for more total accidents than short drivers, their rate of accidents per mile may be less. I suppose that this could be taken into account by insurance companies by charging a higher rate for the first 5 or 10 thousand miles driven, then gradually decreasing the per-mile rate up to a certain point thereafter.






One response to “Pay-As-You-Drive?”

  1. The Shark Avatar

    Then my father is an enigma. He’s had jobs that have required him to drive out of state many times, and currently spends a lot of time driving all over Salt Lake/Utah counties just running various errands, seeing doctors, etc. — and the only ticket he’s ever gotten in his entire life (he’s like 62 now) was about a year ago, and it was undeserved, though it was easier for him to just pay it and go to traffic school for a day to get it off his record.

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