Curb Those Miles and Save
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For a long time, putting a dollar value on the cost of car insurance in California has been dependent on zip code, prior claims, and a few qualitative characteristics including gender and age. Insurance Commissioner Steve Poizner may change these pricing tenets and base premiums primarily on the distance we drive.
From a risk perspective, it’s statistically proven and logically true that the more one drives, the higher the chances he or she will be involved in an accident. Aside from the safety benefits though, this provision would have positive economic and environmental impacts as well.
In a Business Week article, the Associated Press reported, “Two out of three households in the state could save an average of $276 per vehicle, and lower-income people, who generally use their cars less than the middle class or the wealthy, might save even more, said a July study by the Brookings Institution in Washington. However, some high-mileage drivers might see their rates increase by opting for pay as you drive, the Brookings report said.” (www.businessweek.com)
And the savings continues. According to the same article, the Environmental Defense Fund estimates that California drivers would save $40 billion in car-related expenses from 2009 to 2020 if only about 8.5 million drivers sign up for pay-as-you-drive policies. Where’s the pen?
Less cars on the road also means less greenhouse gas emissions – music to environmentalists ears. It was reported such a move would be equivalent to taking 10 million cars off the road. Considering there are nearly 5 million cars that travel through Los Angeles a day alone, the improvements in air quality would be significant.
This means less fuel, smog and ultimately more motivation to really look at alternative modes of transportation. For the transportation industry – this move would mean less congestion, ultimately leading to greater fuel efficiency (if there’s a reduction in stop and go traffic) and quicker transporting of goods and services.
A public hearing is set for October 20th – enough time to start reconsidering our driving habits and re-navigating our routes.
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