The way, and amount, you drive is changing. With the emphasis on greenhouse gases, pollution, and congestion lately, there is going to be a strong push in the very near future to get people to drive less. Along with that change may be a change to the way you buy car insurance as well. Economists are predicting that you will be buying insurance by the mile very soon, instead of as a blanket policy.Here’s an article from MSN Money, and believe it or not, this isn’t a new concept.
I kind of like this idea. Not only does it encourage people to drive less and ride the bus, ride their bike or walk more, but it also gives them a financial incentive to do so. What do you think?
A publicly run auto insurance would eliminate a huge replication of services, as well as the profits taken out without services provided other than ownership (is this a service?) This would allow for the insurance to be covered by a simple surcharge on fuel. This would allow further incentive than simply miles driven to obtain a more fuel efficient car and it would recognize the greater damage a larger vehicle can cause.
All good points Rick. I'm glad you brought up the point about this kind of service providing incentive to invest in more fuel efficient cars. Right now, gas prices are low enough that people aren't worried about driving alot.
I would save so much money this way! I only drive about 100 miles a month. I drive so little that it seems silly to be paying $100 each month just to insure my car. That's WAY WAY more than I pay for gas!
Another problem I just thought of that this could fix is that a lot of people can't afford the insurance so they just don't get it (despite the law). Then when they crash into you you're screwed. A guy in a newer model Mercedes hit me a couple years ago and didn't have insurance! And my insurance company wouldn't take the time to sue him, just wrote it off and made me pay my $500 deductible, which I would have gotten back had they gotten money out of him. Maybe that's not much to some people, but $500 is a lot to me.
I think that miles per year would be a great way to get a discount on Auto insurance. Like Rachel I do not drive a lot of miles each month. Good Sam Insurance for motor homes is advertising only pay for the months you use the motor home.
Recreational vehicles are another reason it would be good to buy insurance by the mile. Most families I know can't afford to buy, insure, and pay the upkeep for both the husband and wife to have a car of their own, let alone teenage kids. And throw recreational vehicles on there and you're paying another mortgage payment!
If gas taxes would be high enough to reach the tipping point where people start looking to public transportation, like what happened about a year and a half ago, we could expand our public transportation system to actually be convenient and not a waste of time. Then we would be collecting the proceeds and not a bunch of folks from Arab countries. Of course the better PT is, the less taxes are coming in from gas taxes…
We saw a 10% increase in ridership in my area when gas reached their highs. When those prices went down, however, folks were in the habit of using PT and never really went back to single car driving in large numbers. Of course, our city did win the National PT area of the year… maybe that has something to do with it! 🙂
We had the same phenomenon here- transit ridership went up along with gas prices, then stayed up even after they dropped. I haven't checked lately so don't know if they're still holding steady. But I will check as it will give me something to blog about. In neighboring Kootenai County, ridership numbers have increased every single month for the past several years, usually by large amounts, until last month. For some reason, ridership in September dropped off on all routes, and even the dial-a-ride programs saw a drop in service requests. Did something happen last month that I'm not aware of?
Maybe a bunch of people got layed off and didn't need to drive or ride public transportation.
The thought is that it may be something like that- that it's most likely economy-related, such as maybe people are trying to save money by just not going out as much in general.