Car insurance by the mile.

Jamie_5

Well, in the abstract it makes sense. But I wonder about the fairness of its application. For instance it often costs more to live closer to work---think of working in large cities---so charging directly by the mile would result in higher insurance costs for less affluent people and you could argue that meant the poorer were subsidizing the richer, hardly a desirable result. Similarly for living in the western states as opposed to the eastern seaboard.

On the other hand, most auto insurance companies I have dealt with already do this to some extent, by charging higher rates for people who drive more during the year, though it is generally self-reported.

Generally, I think of insurance (whether automobile, health, homeowner, or whatever) as socialization of risk, which makes sense. A community of people implicitly agree that it would be extremely damaging for any single individual to have to shoulder the costs of a catastrophic event, even if the expected cost spread over time might be bearable or the odds of suffering the catastrophe were quite low for each individual. Better to share the costs, which insurance does. So I think insurance rates should reflect a balance between incentivization for that which is easily controlled by the individual and socialization for that which is not so easily altered, e.g. where one lives. (Realistically, many people live where they can afford to, where they can find a job, where they have family obligations, etc.)

Long-winded, but you asked.

Wayco Wayne_2

I went to

a lecture last night on the oil shortage and energy usage, and it's conservation. A lot of it I had heard before, but this one was a new idea. Some folks are discussing car insurance paid by the mile as an incentive for people not to drive as much. Very clever I thinks. What thinks you? WW

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mtfallsmikey

Would be a killer for me

I drive 144 mi. round trip/day to and from work...but as you know yourself, W.W., it is expensive to live here in the Metro area. even with the commuting expenses, the money is here, not where I live.

RonWHC

Just another

whack @ social engineering. Oregon wanted to tax road fuels by miles driven. Public Transit folks want a 40 cent per gallon tax to throw @ subways & buses. Maryland is trying to limit building way out, & force "Smart Growth" in crowded developed areas. Guess who owns much of the buildable space in those areas? Yep. High dollar contributors.

What's in it for the Auto Insurance Guys? If it flys - check minutes of future Insurance Commission meetings. The quid pro quo will be there. Auto Insurance ain't broken. As my insurance guy says; "I don't really need to sell anything else."

Maine Doug_64

How does the

government supported flood insurance for the multi-rebuilds of the megamansions on the coasts and rivers fit into your formula? Should there be a we will do it once but after that you are on your own clause?

Probably more important than the mile billing method is making sure drivers are actually insured and taking the cars away for a month if caught without. Second time two months....

Wayco Wayne_2

Taxxing gas

to develop mass transit is a very European thing to do. Which is why their mass transit is so developed. In Belgium I was told they tax new auto sales by the cylinder of the engine of the car. Someone who buys a Jaguar 12 cylinder will be taxed 6 times as much as a person who buys a 2 cylinder Smart car. Developing more efficient city space is a smart thing to do. You can't fault people with money for being smart enough to invest in owning city space that can be developed. My issue with higher population centers is the crime and gangs that seem to exist in such areas. It makes me think of futuristic novels I've read where groups of people band together in walled communities to keep safe, with appointed security people to protect the community garden food source. Ack! Help! I'm a country boy at heart and need some space around me. As fuel prices go up it becomes a luxery. WW

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Jamie_5

coastal megamansions

I don't have a formula, just a perspective for helping to raise what I think of as important issues around insurance.

I agree with what I take to be implicit in your question, that it seems unfair to subsidize/socialize the flood cost of a fantastic view for people who can afford to live in safer areas and choose to live in more flood-prone areas for the view. If it is unfair, insurance costs for those people should be less socialized, i.e. the coastal megamansion owners should shoulder the expected costs among themselves rather than spread it to the rest of us.

Maine Doug_64

I see in Maryland

many of the "nanny state" things as in Maine.

My son's auto insurance in Baltimore is adjusted for zip code. He lives in a high risk area because that is all his teacher's salary permits. If he moved to where my place is located in the yuppy ghetto (near Inner Harbor), his insurance cost would drop significantly.

So the folks in the high risk areas are more likely to not have insurance which puts others in the position of having to pay more to compensate for the same high risk zip code in addition to the odds of being hit by an uninsured driver.

We worked with our agent to get a family package for 3 buildings and 4 vehicles and 2 umbrella policies. When I was using my truck for business I carried a large umbrella policy in addition to the vehicle policy. I can appreciate the cost you all have for insurance on trucks.

Of course insurance won't help where a Baltimore firetruck ran a red light at 47 mph and hit a vehicle and killed 3 people.

andy_21

zip code pricing

LI NY here we get hammered on auto & truck insurance, start to notice many vehicles in driveways around w/ out of state plate, PA, MA., South Carolina... Much cheaper to insure, make you wonder who getting screwed, someone picks up the extra costs

John_173

out of state plates

Here is a link to a comparison of car insurance rates by state (published by the insurance industry).

http://www.iii.org/media/facts/statsbyissue/auto/

Lots of out of state plates here in SC - and not transients. (How do I know? Because I go to church with them.)

I'm inclined to believe the out-of-state-plate syndrome is more complex than simply evading tax/insurance/etc. costs. It seems to me that people who establish a residence anywhere should assume all of the rights & responsibilities of that locale & join the community.