Photo: Flickr, CC
The Greener Kind of Car InsuranceIncentives are a great tool to nudge people in the right direction. It will always be harder to clean up the environment when people's personal interests are opposed to the environment, but when both are aligned, the path of least resistance leads to a better world. Pay-per-mile car insurance is a good example of such an incentive. It's not world-changing by itself, but if applied to enough motorists, it can no doubt have a significant impact. The principle is simple: The less you drive, the less car insurance you have to pay for (since on average, people who drive less are less likely to make insurance claims).
Photo: Flickr, CCThe state of California is making positive moves in that direction. The SacBee reports that "insurance Commissioner Steve Poizner released regulations permitting and authorizing mileage verification for pay-as-you-drive, without dictating what form such plans must take."
The goal would of course be to reduce California's chronic traffic problems and improve air quality.
We can't yet know how such programs would work, but MileMeter in Texas is probably a good template. From their FAQ:
If you drive less, you pay less. With our new launch of MileMeter 2.0, you are covered for six months. If you drive more miles than expected, you are still covered as long as you pay us promptly for the miles driven. You get the peace of mind of a traditional six-month policy, and all the savings and benefits of distance-based insurance. Win-win! You can pick, purchase, and print your insurance cards from the website, and the entire transaction requires only 5 minutes. The policy costs are quoted in cents per mile. You may purchase between 1,000 and 6,000 miles of coverage and pay in full at the time of purchase.
So instead of paying a relatively fixed amount and then not saving a cent on insurance when you drive fewer miles, you would have an incentive to keep your mileage low. Of course the incentive wouldn't be so strong as to radically change people's habits, but in conjunction with other incentives (sticks AND carrots -- tax credits for public transit users and electric cars, a revenue-neutral carbon tax on fuel, etc), it could make a big difference.
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