Excerpt: "It has been estimated that pay-as-you-drive (PAYD) insurance could reduce miles driven by 10 to 15 percent, and lower accident rates."
It would also encourage people to use transit, bicycles and walk (etc.) more often. Mike Neuman ------------------------------------- Pay-As-You-Drive Insurance Proposals have circulated for over a decade to link automobile insurance to the price of gasoline or miles driven, with the intent of encouraging reduced driving in order to achieve safety and environmental benefits. While some conventional auto policies take account of approximate mileage driven, they use very crude methods. It has been estimated that pay-as-you-drive (PAYD) insurance could reduce miles driven by 10 to 15 percent, and lower accident rates. This has significant implications for climate change, as automobiles account for a quarter of U.S. GHG emissions. Progressive Insurance (U.S.) and Norwich Union (UK) have conducted pilot tests with 5,000 policyholders in Minnesota, who received up to 25 percent premium discounts depending on their driving habits. Market tests are also underway in Massachusetts, Oregon, Pennsylvania, Texas and Washington. In 2003, the Oregon legislature enacted a $100/policy tax credit to insurers who offer PAYD insurance. The U.S. Environmental Protection Agency is promoting the concept at the national level. In 2004, General Motors' GMAC insurance began offering mileage-based insurance discounts of up to 40%, utilizing its OnStar technology to keep track of driving patterns. Japan's Aioi Insurance, Israel's Aryeh, and the Netherlands' Polis Direct also introduced PAYD products in 2004. Pay-per-K insurance company offers the product in South Africa. In Germany, premiums have been reduced by up to 50 percent for smaller cars driven shorter distances; Rheinland Versicherungen offers premiums that are proportional to miles driven. Gerling offers similar incentives. An important side benefit of these products is that they use technology to verify distance driven and thereby reduce intentional or unintentional misreporting by insureds, which is believed to be common in the self-reporting systems more widely used today. The American Insurance Association has opposed "Pay-at-the-Pump" insurance, which differs from the above-mentioned strategies in that it collects premiums via the gasoline price rather than as a function of distance driven, and thereby does not allow for other risk factors (driver age, gender, location, etc) to be properly reflected in the price. More detail at: http://www.vtpi.org/tdm/tdm79.htm SOURCE: From Risk to Opportunity: How Insurers Can Proactively Manage Climate Change (Aug. 2006) http://www.tiny.cc/cU05A _______________________________________________ Bikies mailing list [email protected] http://www.danenet.org/mailman/listinfo/bikies
