Pay-As-You-Drive Car Insurance

Sipos writes "The BBC has a story about pay-as-you-drive car insurance. There is not that much detail about how it would work but it seems that a black box in your car monitors your position using GPS. This information is then reported to a insurance company computer which then works out which roads you used and then bills you accordingly. The article seems to suggest that this will make insurance cheaper. Surely this will only happen for people who drive on dangerous roads less than average, after all there are no less accidents as a result? It also makes no mention of the potential for abuse of privacy this could involve. Are people really prepared to let insurance companies track their every move to save money on car insurance?"

Comments

Wrong turns

[Anonymous Coward]

So what happens when I make a wrong turn in LA and end up in watts or compton, does my insurance skyrocket?

True Pay as you go...

[mrwilson]

A true pay as go or 'those who drive more pay more' concept would be to pay at the pump. The states should add .10 (or whatever) per gallon to go to Liability coverage for all that drive. No more uninsured motorists. No high fees for those that only drive 200 miles per month. It may sound a little socialist but you'd sure see those SUV sales give way to Hybrids.

Add it to the price of gas.

[Fast Ben]

There was some talk about this in California a few years ago, they wanted to bake the car insurance into the price of gas, so that everyone would automatically be covered. This would have solved the problem with uninsured drivers, as well as promote energy efficient cars - drive a gas guzzler, and you pay more for insurance too. Personally, I thought it was a great idea, but of course the insurance industry lobby shot that idea down real fast.

Re:Big brother-in-law, the insurance salesman

[rattler14]

whynot.net already came up with a very elegent and clever solution that gets around any sort of GPS, odometer, tracking measures.

Solution? Put it in the cost of gasoline.

Think about it. You need gas to drive the damn thing, you can't skirt around that issue. So the more you drive (and thus the more gas you use) the more you are paying for insurance. Now granted, this has a few flaws, namely that it is the lowest common denominator insurance. But perhaps that's a good thing. Additional coverage and plans above the standard could be purchased above and beyond what the baseline covers and would be strictly voluntary.

You can either read the book (which I found to be very interesting). Or just go to their website, here's the link for this topic

http://whynot.net/view_idea.php?id=499

enjoy

Re:I don't trust 'em

[Anne Thwacks]

I live in the UK, and I can tell you there is no way that premiums are based on actuarial risk. Premiums are related to percieved ability to negociate. If you live in a poor area, your premiums go way up. If you drive a 2 litre diesel (75HP), your premiums is the same as for 2 litre petrol (150HP).

If you buy a second car (so as to have a big one when you need it and a small one when you don't) you cannot use your no claims bonus on both cars, even if you can't drive two cars at once! If you get a minibus, you cant use the no claims bonus from a van on the minibus, or vice versa, even if both are the same Ford Transit body.

You have to declare the value of the vehicle when you apply for a policy, but if you write off the vehicle, they value it half what you did. I could go on, but no need ... its pretty clear that these people are major league crooks. And they use the fact that insurance is compulsory to demand money with menaces. (Pay insurance or we send the boys in blue round to visit...)