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October 12, 2008 10:17:08 AM CDT



Calif. Mulls Pay-as-You-Drive Insurance to Cut Costs, Miles

Posted Jul 15, 08 1:48 PM CDT in Business US 

(Newser) – An alliance of insurance companies and environmentalists are pushing to bring  pay-as-you-drive auto-insurance, available from a handful of companies in other states, to California in a big way, the Los Angeles Times reports. The system, which charges premiums based on mileage, as recorded by a GPS tracking device, gives drivers financial  incentives to conserve, and has multiple benefits on roadways and for the environment.

But watchdog groups are concerned insurers will monitor more than just their customers' mileage; a GPS tracking system could "give insurance carriers your exact location at all times and could wind up being subpoenaed in divorce proceedings and other lawsuits," one privacy advocate worries. In the state legislature, where the measure is expected to pass, one assemblyman worries that the system rewards low-mileage urban drivers and punishes customers in rural areas. Still, one study suggests implementing the system nationwide could save $52 billion.

Source Los Angeles Times

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Pay-as-you-go auto insurance is available in 34 states, but some oppose its introduction on grounds that companies could track more than just customers' mileage.   (AP Photo)
Commuters navigate Los Angeles traffic in this file photo.   (AP Photo)
The new insurance would reward drivers for driving less, potentially reducing traffic jams like this one.   (AP Photo/Alexander F. Yuan)
In this Sunday, May 11, 2008 file picture, unsold 2008 Ford Edge vehicles are parked at a dealership in the south Denver suburb of Littleton, Colo.   (AP Photo/David Zalubowski)
Traffic flows across the Golden Gate Bridge from Marin County into San Francisco in this file photo.   (AP Photo)
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