The “Pay As You Drive” approach to auto coverage could save some drivers money–and cut lots of CO2, studies say.
Most car insurance is priced in the United States kind of like an all-you-can-eat salad bar, says Justin Horner, a transportation analyst at the Natural Resources Defense Council. You pay a set amount once or twice a year, and then you can eat one little salad, or you can totally chow down, making several trips back for more food, piles of cole slaw and jello threatening to topple from your over-filled plate. Either way, it makes no difference to your wallet.
And, of course, regardless of hunger level, it can be kind of tempting to go back again and again, just because you can.
On the other hand, if you get your salad at one of those pay-by-weight places, you’re likely to be a lot more discriminating about what’s on your plate. That’s how we buy gas, says Horner.
And, according to a study by the Brookings Institution, a non-partisan think tank, that’s also how we should be buying our car insurance.
“Just as an all-you-can-eat restaurant encourages more eating, all-you-can-drive insurance pricing encourages more driving,” states the report. “That means more accidents, congestion, carbon emissions, local pollution, and dependence on oil.”
According to the study, if car insurance premiums were priced per mile driven, driving would decrease nationwide by eight percent (it would take a $1 per gallon increase in the price of gas to achieve this kind of reduction). This would:
- Decrease carbon emissions by 2%
- Decrease oil consumption by 4%
- Save $50-$60 billion in reduced “driving-related harms”
In California alone, the study finds that an eight percent decrease in driving would account for between seven-and-nine percent of the total CO2 reductions needed to meet the states mandated levels for 2020.
In another study, professors at the Massachusetts Institute of Technology found that if all Massachusetts drivers switched to car insurance priced by the mile, fuel consumption would go down 9.5%, cutting two million tons of CO2 emissions.