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Greening Auto Insurance
Alex Steffen, 6 Nov 03

In the classic film Repo Man, the character Miller proclaims, "The more you drive, the stupider you get." That may or may not be true, but is certainly true that the more you drive, the more air pollution and toxic runoff you create, and the more likely you are to have a serious if not deadly accident. And the combined effects of more and more of us trying to drive more and more places are gridlocked freeways, global climate change and billions of dollars in lost health-care costs. Poll after poll has shown that the vast majority of Americans would like to drive less than they do.

But your car insurance? It doesn't give a damn how much you drive - you pay a flat fee for the year and drive all you want. But that may be changing.

As Elisa Murray details in a Grist article, insurers are starting to warm to the idea of mileage-based insurance. Under a mileage-based system, you'd pay for insurance based on how far you actually drove in a year, rather the way you pay for gas. It's a great idea, saving money and creating an economic incentive for driving less:

"[T]he new pricing structure could spur motorists to drive less, which would reduce driving-related problems such as congestion and auto accidents. One study, by Aaron Edlin of the University of California at Berkeley, estimates that a universal system of per-mile auto insurance would reduce driving nationally by about 9 percent with a potential insurance savings of $8 billion a year and congestion-related savings of an additional $9 billion. ...Dean Baker, codirector the Center for Economic and Policy Research in Washington, D.C., has noted, mileage-based auto insurance 'may be the biggest free lunch around in reducing greenhouse gas emissions.'"

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