Pay-As-You-Drive Auto Insurance
Among the list of green ideas to get the economy moving the Center for Economic and Policy Research is promoting the Pay-As-You-Drive Auto Insurance. According to the New York Times ( STEPHEN J. DUBNER and STEVEN D. LEVITT, April 20, 2008) G.M.A.C. has begun using OnStar technology to offer mileage discounts, and next month Progressive will roll out a comprehensive PAYD plan called MyRate. Progressive, the huge Ohio-based insurer that has long prided itself as an innovator, will first offer the plan in six states, having run a similar pilot in three other states.
Here is the basic concept.
Subsidize pay-as-you-drive auto insurance policies (PAYD).
By providing a disincentive to drive, PAYD insurance policies are good for the environment and have the potential to improve safety on the roads.
If insurance were paid on a per mile basis, it would provide roughly the same disincentive to drive as a $2 per gallon gas tax.
A $300 subsidy would encourage more insurance companies to offer pay as you drive policies and would effectively put $300 in the pocket of every driver who switches to a PAYD plan.
While this policy would take somewhat longer to implement than the other two, the recession is likely to be long enough that we could still benefit from the stimulus a year or two down the road.
Estimated cost: $3 billion
What do you think - Good idea? Bad idea? vote for it at http://beautifulcity.us