GasBuddy News Article

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California makes way for pay-per-mile insurance

mnn.com -- Drivers with these policies only charged for number of miles driven, creating an economic incentive for those who drive less.

Last month, California moved one step closer to allowing pay-as-you-drive policies that would allow drivers to buy insurance as needed, according to a recent article by The Sacramento Bee.

According to the Bee, California Insurance Commissioner Steve Poizner recently released "regulations permitting and authorizing mileage verification for pay-as-you-drive, without dictating what form such plans must take."

Much like pre-paid phones, pay-per-mile policies only charge insurance for the amount of miles used, so if people drive less, their car insurance will be cheaper.

Environmentalists are hoping a change in policy creates a change in behavior: that

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Submitted Nov 18, 2009 By: teafortwo

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DrCashFlow Champion Author Massachusetts Posts:1,692 Points:537,570 Joined:Jun 2008	Message Posted: Nov 19, 2009 3:06:23 AM Ignore DrCashFlow Report Abuse kind of depends on cost per mile.
POLELANE Champion Author Ohio Posts:5,010 Points:546,970 Joined:Mar 2008	Message Posted: Nov 19, 2009 1:23:30 AM Ignore POLELANE Report Abuse their bureau of motor vehicles can just check their odometer each year during the vehicles' safety inspection and bill them as a percent per mile.
boutmuet Veteran Author Orange County Posts:348 Points:152,360 Joined:Apr 2009	Message Posted: Nov 19, 2009 1:21:30 AM Ignore boutmuet Report Abuse Bad idea. Thanks I'll keep my regular insurance since I drive 20,000 miles a year because of school. I don't need anyone tracking me, even if it just my mileage numbers.
MPGKing All-Star Author New Jersey Posts:842 Points:214,630 Joined:Mar 2009	Message Posted: Nov 18, 2009 10:44:01 PM Ignore MPGKing Report Abuse Bad idea - only opens the door to being taxed by the mile.
car253 Champion Author Ohio Posts:1,447 Points:404,380 Joined:Oct 2008	Message Posted: Nov 18, 2009 10:39:23 PM Ignore car253 Report Abuse Not something I would be interested in.
OHMS Champion Author Orange County Posts:6,726 Points:737,335 Joined:May 2005	Message Posted: Nov 18, 2009 9:04:13 PM Ignore OHMS Report Abuse I'd love that law; I have four Paseos each of which gets 35-40 mpg; to and from work 4 miles away. I don't wear out the road and the air and the water like you long distance migrant workers. You wear out the roads; you pay to fix them. you dirty the air; you pay to clean it; I only wish I paid one fourth the auto insurance; I only can drive one at a time;
computernut2008 All-Star Author Ohio Posts:805 Points:229,065 Joined:Oct 2008	Message Posted: Nov 18, 2009 7:02:55 PM Ignore computernut2008 Report Abuse My mom was 91 and didn't drive anymore but I used her car to take her to the store 1 time a month. Total of 2 miles..Her insurance was $50.00 and month and her agent said that was a good deal..Now that is theft in my opinion. This car was an 85 Plymouth Reliant that was the last car her and my dad bought new.. She signed this relic to me and it cost 15.00 a month to drive it anywhere..However even though the insurance people are a rip the government will be worse. I remember in the 80's when they passed the insurance law in Ohio I was against it. Not because I didn't think you should have it but,they were saying it would reduce rates..Yea right...Passing a law REQUIRING you to buy something will always bring the price down RIGHT sure it will..
Gas Thirsty Champion Author Los Angeles Posts:1,714 Points:2,142,705 Joined:Mar 2003	Message Posted: Nov 18, 2009 6:57:30 PM Ignore Gas Thirsty Report Abuse This an unfair plan. It discriminates people who have to drive far to work. Insurance rates should be based on driving records, type of vehicles and residencies.
bobdec Champion Author Florida Posts:3,433 Points:671,275 Joined:May 2008	Message Posted: Nov 18, 2009 6:56:04 PM Ignore bobdec Report Abuse Another way to control us
DerHahn Champion Author Illinois Posts:7,104 Points:973,685 Joined:May 2004	Message Posted: Nov 18, 2009 5:42:34 PM Ignore DerHahn Report Abuse don't really mind the idea for use on my car. it only gets used in the winter or during bad weather. the scooter only cost $100 a year so not worried about that.
LilRedWagonIN Champion Author Indiana Posts:2,006 Points:445,880 Joined:Oct 2008	Message Posted: Nov 18, 2009 5:29:17 PM Ignore LilRedWagonIN Report Abuse It's scary: Canada requiring pay-per-mile taxes and hefty fines and imprisonment if drivers do not submit to Big Brother recording of vehicle data. California getting their nose in the tent by doing the same thing of GPS recording of miles (and speed and where the vehicle goes). The energy companies are in this control freak mode with "intelligent" thermostats in homes so that heat can be controlled remotely (by government?). Technology can be promoted by all kinds of benefits, but the hidden agenda is an all-knowing Big Brother - whether by insurance companies, government, or marketing firms.
lgwhitlock Champion Author California Posts:2,071 Points:551,975 Joined:Jun 2008	Message Posted: Nov 18, 2009 5:24:43 PM Ignore lgwhitlock Report Abuse And as more people use it the closer we will be to having Big Brother...
fullcirclethink Veteran Author Washington Posts:317 Points:29,090 Joined:Jun 2009	Message Posted: Nov 18, 2009 5:20:27 PM Ignore fullcirclethink Report Abuse First: why would the insurance companies go for this? It will only add to their paperwork. Second: isn't it a statistical fact that most accidents happen close to home? If this is true, it won't matter if they drive fewer miles; they cause most of the accidents anyway! Definitely another way to control the masses and limit our freedoms by hitting our wallets.
Zonk All-Star Author Michigan Posts:871 Points:981,650 Joined:Oct 2005	Message Posted: Nov 18, 2009 5:17:59 PM Ignore Zonk Report Abuse To control such a policy would be a nightmare.
truckguy115 All-Star Author Orange County Posts:702 Points:109,280 Joined:Apr 2008	Message Posted: Nov 18, 2009 5:15:07 PM Ignore truckguy115 Report Abuse just because some of you live outside this stupid i live in. don't think for one second cancer like this won't spread outside here. it can and will spread if enough people do it or are forced to use it. more like forced is what i see happening.
jcurley Champion Author California Posts:2,792 Points:676,650 Joined:Dec 2007	Message Posted: Nov 18, 2009 5:14:05 PM Ignore jcurley Report Abuse Sorry, but the only way to make Americans change their driving habits is to have the price of gasoline hit $4-$5 a gallon. THEN THEY PAY ATTENTION! And I beg to differ that a 3000 mile driver is safer than a 8000 mile driver. We already have a two tier insurance thing - over/under 8000, here in CA.
USNChief Sophomore Author Jacksonville Posts:133 Points:20,320 Joined:Oct 2009	Message Posted: Nov 18, 2009 5:09:06 PM Ignore USNChief Report Abuse They better offer a tremendous rate reduction. I do not live in CA. I would not buy this type of coverage. I CAn see many legal battles between policy holders and insurance companies. As we all know the Insurance company will win.
fasu007 Veteran Author South Carolina Posts:411 Points:554,700 Joined:Jun 2008	Message Posted: Nov 18, 2009 5:04:53 PM Ignore fasu007 Report Abuse I don't want anyone watching where or when I'm going somewhere, by putting a chip in my vehicle. This story ran a couple of days ago. I'm glad I live on the other side of the country.
scuffy All-Star Author Florida Posts:781 Points:744,660 Joined:Apr 2005	Message Posted: Nov 18, 2009 5:04:17 PM Ignore scuffy Report Abuse I think how this will end up is pay by the mile tax just for driving.
lpj Champion Author Macon Posts:6,393 Points:1,350,985 Joined:Apr 2006	Message Posted: Nov 18, 2009 5:01:10 PM Ignore lpj Report Abuse something don't sound right about this article !!!!!
fordmexico Champion Author Michigan Posts:1,549 Points:135,905 Joined:Oct 2009	Message Posted: Nov 18, 2009 4:58:26 PM Ignore fordmexico Report Abuse Insurance should not be used to change riving behavior. It is a contract between you and a company that indemnifies for those things as specified in that contract. Driving behavior (tickets-accidents), where you live, the type of your vehicle as well as the miles you drive should be considered when computing premiums. I am also against the use of credit reports to assess risk and thus the premiums you pay. Many people through no fault of their own have seen their credit scores decline. These lower scores lead to higher premiums. Not fair.
lowpet Veteran Author Texas Posts:279 Points:72,000 Joined:Dec 2008	Message Posted: Nov 18, 2009 4:58:24 PM Ignore lowpet Report Abuse it will be interesting to see how this will work
guyincognitoNY Champion Author New York Posts:2,509 Points:507,060 Joined:Sep 2008	Message Posted: Nov 18, 2009 4:56:35 PM Ignore guyincognitoNY Report Abuse i would look for anyway to cheat them
Lukus Champion Author Halifax Posts:2,623 Points:536,445 Joined:Nov 2007	Message Posted: Nov 18, 2009 4:55:19 PM Ignore Lukus Report Abuse It might work in California and it might stop some of the heavy traffic on the roads out therre.
signwiz All-Star Author Indiana Posts:590 Points:777,425 Joined:Feb 2006	Message Posted: Nov 18, 2009 4:51:39 PM Ignore signwiz Report Abuse Insurance companies only incentive to do this would be to increase revenue. Otherwise, why change?
dhnbBUG Champion Author Pennsylvania Posts:2,528 Points:597,195 Joined:Apr 2008	Message Posted: Nov 18, 2009 4:48:25 PM Ignore dhnbBUG Report Abuse I hope they figure in other factors besides miles.
Focus2 Champion Author Illinois Posts:3,581 Points:1,090,750 Joined:Mar 2006	Message Posted: Nov 18, 2009 4:48:06 PM Ignore Focus2 Report Abuse Save money? Really? That was what the telephone company told me when they switched me from an unlimited calling plan to pay per calls. Telephone bills all went up.
DonKofAK Veteran Author Anchorage Posts:311 Points:182,790 Joined:Jun 2009	Message Posted: Nov 18, 2009 4:43:55 PM Ignore DonKofAK Report Abuse NCWebGuy makes some good points. I'd like to build on his observations. 1. Why do we resist change without thinking through the consequences? For example, any change in health care will be bad for me, not good. Is it possible there could be good, bad, and indifferent changes that, on the whole, make things better for me and for you? 2. Mileage alone does not account for exposure to insurable risks; for the fellow below who thinks city drivers will pay less than rural drivers, ask yourself why insurance brokers want to know where you live and drive. Insurers use your zip code to indicate risk, then they adjust the premium accordingly. 3. It seems some people could benefit from a college-level course in insurance because they clearly spend a lot on it without knowing what they're getting. It's like home-buyers thinking the bank is their partner and, when the value of the house drops to less than the loan balance, they can deliver keys to the bank receptionist's desk and walk away. Look up the word "debt" and "loan"; it's not the same as "partner." Gypsykid; if it sucks to be someone who has to drive a lot, make the changes that make you happier. Find a better solution; stop complaining and victimizing yourself. Weenerdog; why shouldn't those who incur less risk pay less than those who incur more? Insurance involves a contract binding a party to indemnify another against specified loss in return for premiums paid. I can put my premiums in the bank and, if I'm careful and lucky, I'll have more in the bank than it takes to pay for my losses -- the cost repairing the damage to people and property. On the other hand, if I'm careless and/or unlucky, I'm impoverished. I pay the insurance company to avoid poverty. I'd prefer to pay them a fair price for the risk they take and the protection they provide. [Edited by: DonKofAK at 11/18/2009 5:45:56 PM EST]
caddilac Champion Author Ontario Posts:9,556 Points:987,880 Joined:Apr 2007	Message Posted: Nov 18, 2009 4:41:04 PM Ignore caddilac Report Abuse I would be in favour of that kind of policy here where I live if it were offered. I get a small reduction in insurance premiums because I am retired, but I still think I am overcharged for the few miles I actually drive in a year. People that drive less have a lesser chance of being in an accident, so they shouldn't have to pay as much as those that drive a lot. And, maybe those that use their vehicles a lot, to make frequent trips to the corner store, will either walk or pay extra for increasing their chance of getting in an accident. For those that don't want to pay by the mile, well, they can always pay the same as they do now. People that drive a lot are the ones that increase their chances of being involved in an accident, so they SHOULD pay more. [Edited by: caddilac at 11/18/2009 5:45:27 PM EST]
YLHandyman Champion Author Orange County Posts:3,650 Points:660,865 Joined:Feb 2008	Message Posted: Nov 18, 2009 4:40:51 PM Ignore YLHandyman Report Abuse Great for those who don't drive much.
julius1st4 Champion Author Ontario Posts:1,321 Points:733,755 Joined:Jul 2003	Message Posted: Nov 18, 2009 4:40:14 PM Ignore julius1st4 Report Abuse What's this got to do with Gas & Oil. The Auto Insurance Co's [in Ontario} just stated that their rates will probably increase by 20% next year.
camel1 Champion Author Minnesota Posts:3,080 Points:1,171,245 Joined:Jul 2006	Message Posted: Nov 18, 2009 4:40:03 PM Ignore camel1 Report Abuse It sounds good for those who drive very little, but the rates will be high!
Joeski1 Champion Author New Jersey Posts:2,828 Points:588,225 Joined:Dec 2004	Message Posted: Nov 18, 2009 4:39:17 PM Ignore Joeski1 Report Abuse I guess if want to tour the countryside you'll need to get a horse now....
Eichhornchen Champion Author Detroit Posts:1,882 Points:367,775 Joined:Feb 2009	Message Posted: Nov 18, 2009 4:36:59 PM Ignore Eichhornchen Report Abuse Will they give a discount for people who deliver Meals on Wheels?
Brewernut All-Star Author Milwaukee Posts:853 Points:319,460 Joined:Oct 2008	Message Posted: Nov 18, 2009 4:36:16 PM Ignore Brewernut Report Abuse well it makes sense but it is going to be bad for people who have to drive the most
georgeo Champion Author California Posts:1,535 Points:60,330 Joined:May 2009	Message Posted: Nov 18, 2009 4:35:59 PM Ignore georgeo Report Abuse Somehow they will make you pay more than you normally would.
1Casey Champion Author Albany Posts:1,294 Points:860,265 Joined:Jun 2004	Message Posted: Nov 18, 2009 4:33:47 PM Ignore 1Casey Report Abuse More abuse of the American tax payer.Don't car pool your kids any where. school, scouts, you will be the one paying for it. What about the people who volunteer to delver meals to the home bound? Are they going to pay more for helping. Way to go Arnold.
spazz1218 Rookie Author Tampa Posts:48 Points:10,290 Joined:Nov 2009	Message Posted: Nov 18, 2009 4:33:05 PM Ignore spazz1218 Report Abuse I love California but glad im not living there now
gypsykid Champion Author Florida Posts:1,638 Points:326,565 Joined:Apr 2009	Message Posted: Nov 18, 2009 4:29:05 PM Ignore gypsykid Report Abuse sucks to be someone who has to drive a lot
weenerdog Champion Author Detroit Posts:4,050 Points:769,225 Joined:Jan 2008	Message Posted: Nov 18, 2009 4:28:48 PM Ignore weenerdog Report Abuse If they are charging people who drive less a smaller premium, then someone is going to have to pay more to make up the difference.
goodbuy Champion Author Michigan Posts:2,336 Points:388,370 Joined:May 2005	Message Posted: Nov 18, 2009 4:27:37 PM Ignore goodbuy Report Abuse So is it cheaper if I drive in the city versus the country. Should be.
gypsykid Champion Author Florida Posts:1,638 Points:326,565 Joined:Apr 2009	Message Posted: Nov 18, 2009 4:27:31 PM Ignore gypsykid Report Abuse i guess this makes sense...drive more pay more
hibsaw Champion Author Mississippi Posts:2,284 Points:550,000 Joined:Feb 2008	Message Posted: Nov 18, 2009 4:23:45 PM Ignore hibsaw Report Abuse I agree with HUGO40.
SBlouch Champion Author San Antonio Posts:4,092 Points:889,205 Joined:Apr 2007	Message Posted: Nov 18, 2009 4:20:20 PM Ignore SBlouch Report Abuse CA usually is one of the first to come up with new energy ideas. But if I am not mistaken, Progressive has a policy which is lower for those who do not drive much. I think payment of insurance should be on the average use rather than the actual. USAA, each time it is ready to be renewed ask if the mileage has increased or decrease and then change the policy to reflect this as they know when when gets older they drive less.
garman87 All-Star Author Austin Posts:655 Points:1,342,695 Joined:Aug 2005	Message Posted: Nov 18, 2009 4:16:53 PM Ignore garman87 Report Abuse For people that don't drive a lot this sounds really good.
ItisAJeepThing Champion Author Tucson Posts:10,675 Points:1,141,385 Joined:Oct 2006	Message Posted: Nov 18, 2009 4:13:50 PM Ignore ItisAJeepThing Report Abuse How does this work? Do I have to call Allstate every trip? What happened to privicy?
ncwebguy Rookie Author Raleigh Posts:51 Points:48,370 Joined:Apr 2008	Message Posted: Nov 18, 2009 4:11:36 PM Ignore ncwebguy Report Abuse Some people have gone into "fight change" mode without actually thinking. There will probably be a fixed cost for insuring the value of the vehicle, and the the variable cost based on how far you drive it. No one is changing anyone's behavior. This is allowing another choice in determining the cost of insurance. Freedom from having to pay insurance based on "average use" vs. actual use that may be less. Why do the people who hate this hate freedom? If you want an unregulated Libertarian utopia, feel free to move to Rwanda.
Hugo40 Champion Author Kentucky Posts:1,888 Points:481,555 Joined:Aug 2008	Message Posted: Nov 18, 2009 4:11:31 PM Ignore Hugo40 Report Abuse Then the next step is to charge vehicle owners taxes on miles driven?
Sneakers55 Champion Author Houston Posts:27,237 Points:1,146,370 Joined:Nov 2005	Message Posted: Nov 18, 2009 4:11:26 PM Ignore Sneakers55 Report Abuse JMJarvis1952 wrote: >And this is going to make insurance companies any richer? A lot of the insurance industry is mutual (not for profit) but a smart for-profit company can do well. Look at GEICO and Progressive for two profitable for-profit companies.
sam7777 Sophomore Author Grand Rapids Posts:230 Points:30,210 Joined:Jun 2009	Message Posted: Nov 18, 2009 4:10:06 PM Ignore sam7777 Report Abuse This will cause the insurance companies to charge people that drive more extra to offset what they get now. They are not going to lose money.