More on Pay as You Drive Insurance


I posted some time ago about paying insurance based on the number of km driven per year. Here is a detailed and clear article on the subject and how it is being implemented in several states south of us:

The article talks about “negative externalities: the behavior of one person has negative impacts on another person (or society as a whole), yet the person causing those impacts doesn’t pay for them”. The three mentioned are congestion, carbon emissions and traffic accidents. I would add pollution, both noise and gases such as CO and NO2, and dangers to the non motorized public to that list. That does not include the costs of paving huge areas to provide parking for all of these vehicles.

The authors estimate that driver’s would have to pay an extra $.10 per mile to compensate society for the real cost of their driving.

Take a look to see how some insurance companies are instituting this idea.



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