California considering pay-as-you-drive insurance on clarkhoward.com

Pay-as-you-drive insurance pricing -- a model pioneered by Progressive in Texas -- holds real promise for the future, according to Clark. As the name suggests, you pay in 1 of 2 ways: Based on your mileage or based on how, when and where you drive.

In the first method, the mileage on your odometer is manually tracked. In the second approach, a computer device in your vehicle checks to see not only total miles driven, but also if you speed, make jackrabbit starts, sudden stops, etc.

Obviously, there's a real creep-out factor with the second method of monitoring.

California is now considering pay-as-you-drive pricing as a voluntary option for all drivers. It will be interesting to see what happens because, as Clark has said many times, California is often a trend-setter for our nation.

The pay-as-you-drive model could be a real boon to your wallet and the environment. As you might expect, people tend to drive less when they know they're paying by the mile. They condense trips or even skip driving if it's not necessary.

For example, Clark likes to visit Fry's Electronics for deals -- but the closest one is 28 miles from his home. If he had a pay-as-you-drive insurance policy, he'd have to calculate the cost of using his vehicle versus the potential savings on electronics before deciding to make the trip.

What do you think about the pay-as-you-drive model and its implementations? Vote in our poll and let us know!

What others are saying

Pay-As-You-Drive Insurance
I think this is an incredible idea. Especially for people like my mother. She is 86 years old, drives maybe 2000 miles a year but has to pay the same premium as driver's her age (if there are any) who drive everyday, piling on the mileage as they go. If the prices are right, I would be very interested myself. At age 59, an excellent driving record, I drive less than 10 miles a day to work and back in a small, economy car that is only used for that purpose. However, insurance is paid on the vehicle basically the same as if I drove it 200 miles a day. Hope this idea flys.
By Dallas Oliver @ 09/04/08 04:35:38 PMreport abuse
Insurance Cost
Howard, I think this is a good Idea for teens and young people, They always pay more, someone like me and you do not have a need for this, since our rates are always less. Also is never a good idea to let insurance companies know your business (where you are, how fast you are going or how slow and how long you been there) I could be intrepreted to thier own benefit. And believe me, I been a licensed insurance agent in Florida for 13 years, nothing they do is to benefit you, it is always to benefit them. Please Howard don't buy this one from them, at the end they will find a way to make you pay more, isn't that the business they are in??? to make MONEY!!!
By Moe Mago @ 09/03/08 08:35:29 AMreport abuse
Pay As You Drive
To begin with, I HATE insurance (in total). They finally paid politicians enough that instead of canceling you, the State will revoke your license, pull your tag, and fine you heavily if your policy lapses (or if a computer [or entry clerk]) screws up.

There is no other industry I can think of that lets government be its enforcer. What a scam. It was well worth the millions (billions) that insurance bribed (and continue to bribe) politicians with.

Now, in a Big Brother move, the industry will charge me for every mile I drive? Will I pay more if my trip takes me to "Big Joe's Bar and Package Lounge?" I have enough troubles already. What if someone borrows my car. What a shock I may get to find out Aunt Ethel is a speed maniac and now I owe and extra $122.50!

I don't know Clark, I don't like this one!

John
By John Braun @ 09/03/08 01:05:41 AMreport abuse
Build insurance into the price of gas?
I've heard an idea where insurance is funded the same way highways are, by the premiums being part of the price of a gallon of gas. Those who use more gas, presumably drive more, have more exposure and thus pay more. Everyone would be thus covered in theory.
By MikeAtNight @ 09/02/08 09:28:29 PMreport abuse
Auto Insurance
About 15 years ago Economist Andrew Tobias promoted a "Pay at the Pump" ballot measure plan for mandatory insurance in CA. This model does not require draconian government monitoring of our lives and the attending loss of privacy. I thought the plan was a brilliant way to insure all drivers, and to cut the attorneys out of a piece of the 'action.' Unfortunately, the attorneys realized the would lose hundreds of millions in revenue and created deceptive ads that scared the public away from voting for such a reasonable & fair alternative. Perhaps also the auto insurers bank-rolled some brainwashing as well. This plan was no-fault, and even more importantly, "No-Attorney." We are already the most controlled, monitored society in the history of the Earth. I would oppose further monitoring of my life. Many do not buy insurance because they cannot afford the premium. However, if every gallon of gas included 15 cents for insurance coverage, and we offered true 'no fault' without attorneys, the cost of insuring would cost all the honest, law-abiding people much less than now.
By Mark Blackburn @ 09/02/08 07:59:39 PMreport abuse
Slow Road To Socialism
Another ploy from the socialism state called California.

No way... This is another piece of the crumbs that the government and some corporations are feeding the lemmings to get socialism established. This time it is under the cover of "We Will Save You Money" by watching where and when you drive. Just like the ID Chip that is "suppose to assist the police if you are lost or kidnapped". They use our emotions to change the society slowly. No ID chips in my house, not even my 2 dogs. You will be under the control of someone else who will dictate where, when and who you will visit.

I don't care what the cost savings, we can't let this socialism masquerade keep going.

The biggest a government should ever be is one that can be drowned in a bathtub.
By Marlin @ 09/02/08 05:07:55 PMreport abuse
Not a good indicator
Mileage alone is not a good indicator of risk. Many high risk drivers (speeding, under the influence of drugs, poor maintenance of cars, etc.) that don't drive many miles but drive the cost of everyone's insurance up.
By David @ 09/02/08 03:39:36 PMreport abuse
the future of auto insurance
This is what I see to be the norm in the future. All car insurance will be monitored to cut down on liability. Soon the insurance companies will require the "black box" for cars, else the customer pays an abnormal price. That will cost the companies at first, but more and more will do it. Soon it will become a standard safety feature on new cars. Years will pass then one bright young guy brainstorming at an insurance company will say, "We can offer no monitoring of driving." And some older fellow quietly mentions that's the way it used to be.
By Josh @ 09/01/08 03:12:44 PMreport abuse
They already use my mileage.
AAA already checks my mileage each time I renew my policy. They charge me more for my commute vechile because I put on 25000 miles each year. I don't like the idea of government getting involved though. I think insurance should be based on your driving record and the kind of car you have.
By Jim @ 09/01/08 03:03:32 PMreport abuse
I get tired of hearing about California. I don't even consider it part of the U.S..
Its becoming a socialist haven. I like the FREEDOM of getting in MY CAR and going where I want without being tracked and paying the goverment by the mile to drive. If you like all of this big brother communist crap move to California. I love getting in my Monte Carlo SS windows down sunroof open and enjoying the FREEDOM of it. So goes California so goes the nation. Straight to hell.
By me @ 08/29/08 06:24:59 PMreport abuse
Depends on the Pricing
I am curious to see what the cost would be compared to current plans with no change in driving habits.
By Bob @ 08/29/08 04:13:11 PMreport abuse

Pay-As-You-Drive Insurance

I think this is an incredible idea. Especially for people like my mother. She is 86 years old, drives maybe 2000 miles a year but has to pay the same premium as driver's her age (if there are any) who drive everyday, piling on the mileage as they go. If the prices are right, I would be very interested myself. At age 59, an excellent driving record, I drive less than 10 miles a day to work and back in a small, economy car that is only used for that purpose. However, insurance is paid on the vehicle basically the same as if I drove it 200 miles a day. Hope this idea flys.

By Dallas Oliver @ 09/04/08 04:35:38 PMreport abuse

Insurance Cost

Howard, I think this is a good Idea for teens and young people, They always pay more, someone like me and you do not have a need for this, since our rates are always less. Also is never a good idea to let insurance companies know your business (where you are, how fast you are going or how slow and how long you been there) I could be intrepreted to thier own benefit. And believe me, I been a licensed insurance agent in Florida for 13 years, nothing they do is to benefit you, it is always to benefit them. Please Howard don't buy this one from them, at the end they will find a way to make you pay more, isn't that the business they are in??? to make MONEY!!!

By Moe Mago @ 09/03/08 08:35:29 AMreport abuse

Pay As You Drive

To begin with, I HATE insurance (in total). They finally paid politicians enough that instead of canceling you, the State will revoke your license, pull your tag, and fine you heavily if your policy lapses (or if a computer [or entry clerk]) screws up.

There is no other industry I can think of that lets government be its enforcer. What a scam. It was well worth the millions (billions) that insurance bribed (and continue to bribe) politicians with.

Now, in a Big Brother move, the industry will charge me for every mile I drive? Will I pay more if my trip takes me to "Big Joe's Bar and Package Lounge?" I have enough troubles already. What if someone borrows my car. What a shock I may get to find out Aunt Ethel is a speed maniac and now I owe and extra $122.50!

I don't know Clark, I don't like this one!

John

By John Braun @ 09/03/08 01:05:41 AMreport abuse

Build insurance into the price of gas?

I've heard an idea where insurance is funded the same way highways are, by the premiums being part of the price of a gallon of gas. Those who use more gas, presumably drive more, have more exposure and thus pay more. Everyone would be thus covered in theory.

By MikeAtNight @ 09/02/08 09:28:29 PMreport abuse

Auto Insurance

About 15 years ago Economist Andrew Tobias promoted a "Pay at the Pump" ballot measure plan for mandatory insurance in CA. This model does not require draconian government monitoring of our lives and the attending loss of privacy. I thought the plan was a brilliant way to insure all drivers, and to cut the attorneys out of a piece of the 'action.' Unfortunately, the attorneys realized the would lose hundreds of millions in revenue and created deceptive ads that scared the public away from voting for such a reasonable & fair alternative. Perhaps also the auto insurers bank-rolled some brainwashing as well. This plan was no-fault, and even more importantly, "No-Attorney." We are already the most controlled, monitored society in the history of the Earth. I would oppose further monitoring of my life. Many do not buy insurance because they cannot afford the premium. However, if every gallon of gas included 15 cents for insurance coverage, and we offered true 'no fault' without attorneys, the cost of insuring would cost all the honest, law-abiding people much less than now.

By Mark Blackburn @ 09/02/08 07:59:39 PMreport abuse

Slow Road To Socialism

Another ploy from the socialism state called California.

No way... This is another piece of the crumbs that the government and some corporations are feeding the lemmings to get socialism established. This time it is under the cover of "We Will Save You Money" by watching where and when you drive. Just like the ID Chip that is "suppose to assist the police if you are lost or kidnapped". They use our emotions to change the society slowly. No ID chips in my house, not even my 2 dogs. You will be under the control of someone else who will dictate where, when and who you will visit.

I don't care what the cost savings, we can't let this socialism masquerade keep going.

The biggest a government should ever be is one that can be drowned in a bathtub.

By Marlin @ 09/02/08 05:07:55 PMreport abuse

Not a good indicator

Mileage alone is not a good indicator of risk. Many high risk drivers (speeding, under the influence of drugs, poor maintenance of cars, etc.) that don't drive many miles but drive the cost of everyone's insurance up.

By David @ 09/02/08 03:39:36 PMreport abuse

the future of auto insurance

This is what I see to be the norm in the future. All car insurance will be monitored to cut down on liability. Soon the insurance companies will require the "black box" for cars, else the customer pays an abnormal price. That will cost the companies at first, but more and more will do it. Soon it will become a standard safety feature on new cars. Years will pass then one bright young guy brainstorming at an insurance company will say, "We can offer no monitoring of driving." And some older fellow quietly mentions that's the way it used to be.

By Josh @ 09/01/08 03:12:44 PMreport abuse

They already use my mileage.

AAA already checks my mileage each time I renew my policy. They charge me more for my commute vechile because I put on 25000 miles each year. I don't like the idea of government getting involved though. I think insurance should be based on your driving record and the kind of car you have.

By Jim @ 09/01/08 03:03:32 PMreport abuse

I get tired of hearing about California. I don't even consider it part of the U.S..
Its becoming a socialist haven. I like the FREEDOM of getting in MY CAR and going where I want without being tracked and paying the goverment by the mile to drive. If you like all of this big brother communist crap move to California. I love getting in my Monte Carlo SS windows down sunroof open and enjoying the FREEDOM of it. So goes California so goes the nation. Straight to hell.

By me @ 08/29/08 06:24:59 PMreport abuse

Depends on the Pricing

I am curious to see what the cost would be compared to current plans with no change in driving habits.

By Bob @ 08/29/08 04:13:11 PMreport abuse

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Aug 29, 2008 -- California considering pay-as-you-drive insurance

What others are saying