Monday, June 12, 2006

The insurance companies solve global warming.

Increasing the cost of driving has been one of the main strategies floated for decreasing our use of fossil fuels. The most common thought on how to do this is a gas tax. A recent piece in Harper's suggests a different way: pay-by-the-mile car insurance. The article points out that this wouldn't even necessarily mean a hike in prices for most drivers because the per-mile fee could be calculated based on current car insurance costs divided by the average mileage driven. To me, this proposal might have a psychological advantage over the gas tax in that each month when they get their insurance statement, drivers will get to see their costs measured out in a one to one relationship with car usage.


At 11:11 PM, Blogger Daniel said...

Don't auto insurance prices already vary depending on how much driving we do? When I was insured by Mercury Insurance in California, I got a pretty big discount when I called them to tell them I'd be driving 10,000 miles per year less in a new job. Perhaps Mercury is an exception, but I would think not. It's pretty obvious that the risk the insurance companies have to bear is in part related to the number of miles you drive.

At 8:49 AM, Blogger Kover said...

A quick Internet search says that some do, but using the pretty broad categories that you mention--unless folks think they can reduce their driving in huge chunks, my guess is that this doesn't have that much of an effect on car usage. There are actually a few places that are doing the pay-per-mile thing though.


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