A friend sent a note from Seattle's Sightline Institute that they are trying to bring a Pay As You Drive (PAYD) auto insurance pilot to Washington.
Sightline answers: What is Pay As You Drive?
Car insurance is currently sold like an all-you-can-eat meal plan: once you've made the purchase, you may as well gorge. Traditional low-mileage discounts don't come close to capturing the difference in accident risk between high- and low-mileage drivers; those who drive less are penalized.
Pay-as-you-drive insurance would make buying car insurance more like buying gasoline: the less you drive, the less you pay. Insurers would offer motorists a per-mile rate that would also incorporate existing rating factors, such as a driver's crash history or geographic location.
Evidence suggests that low-mileage drivers are a large untapped market.
Sightline goes on to cite the benefits:
Initial research estimates that pricing insurance by the mile could cut total driving by 5 to 15 percent, which would slash the huge environmental impacts of the automobile and lessen the number of crashes and claims. A 10 percent reduction in driving is estimated to result in a 17 percent reduction in crashes.
For taxpayers: Reduced driving would also save money on roadwork. Oregon Environmental Council, a nonprofit group working to pilot PAYD in Oregon, estimates that PAYD insurance could trim the state's road-related costs substantially over the next 20 years.
I don't quite understand why this hasn't happened yet - especially given the free market's proclivity to meet the needs, wants and desires of consumers. Could it be that the auto insurance market isn't a truly competitive, diverse, consumer driven marketplace? Say it isn't so.
As I don't commute to a regular day job, I drive a lot less than most people (aside from my girlfriend who exclusively cycles). It would be nice to pay less on auto insurance based on the time & mileage I actually use.
This is America - it's the greatest country on earth, shouldn't I have the right to pay for auto insurance based on how much I actually need active coverage?