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

Option available in 34 states seen to help costs, environment; invasiveness an issue
By Kevin Spak,  Newser Staff
Posted Jul 15, 2008 1:48 PM CDT
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)
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(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.