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California's Revised Pay-As-You-Drive Insurance Draws Continued Objections
The EFF has restated many of their original privacy objections about California's latest revision to the Pay-As-You-Drive auto insurance proposal. Admitting that the amended bill is an improvement, privacy advocates are still uneasy about the surveillance implications of this program. "The proposal centers on a simple idea: infrequent drivers are less of an insurance risk. By pricing policies according to the mileage driven, insurance companies can offer discounts to lower-risk infrequent drivers, and put an appropriate cost penalty on heavy drivers. The state estimates that 30% adoption of PAYD insurance nationwide would reduce miles driven by at least 10% among subscribers, and save 55 million tons of CO2 over the next ten years. The benefits of such a system could be quite dramatic, as California Insurance Commissioner Steve Poizner is sure to emphasize. Such insurance plans first became available in 2004, and are now available as a limited option in 30 US states from insurance companies like Progressive and Liberty Mutual."
How is someone who drives less better at driving? It would seem someone who drives less frequently is less practiced and would be a greater risk as compared to someone who is a regular driver. There must be some sort of bell curve where the people on the ends pay more.
This is my sig. There are many like it but this one is mine.
Why would anyone think that paying by the mile would reduce the amount I'm driving?
I don't go on long jaunts around the town just for the hell of it, I go because I need to get somewhere, or pick something up.
So pretty much what this would do is either be a savings for me--because it'd be less than my buffet style policy--or it'd be more expensive for me. I'm guessing that the majority of people, myself included, would fall into the latter category.
I currently have no clever signature witicism to add here.
just don't know how it can save "55 million tons of CO2 a year"....people who drive a little will continue to drive a little with this insurance or not.
I hate it when they fudge numbers and try to draw a causation out of it.
A chicken didn't lay an egg because there was a law passed that gave tax incentives to the chickens to lay eggs....
I hate it even more when politicians take credit for something that has nothing to do with anything.
Couldn't you say that a driver who drives less has less driver experience than somebody who drives more? Therefore the driver who drives less could be a higher risk?
I don't drive very often, but when I do drive, I always have a case of Dos Equis with me.
https://www.eff.org/https-everywhere
but it lacks any practicality fo California.
All this will do is make insurance unaffordable to low income families that have toi drive due to the distance they must commute. Meaning more uninsured motorists.
They al ready take it into account some what, and that's enough.
This is just attempt to squeeze another dime out of people who must have this service.
Quite frankly, if the Government is going to mandate insurance, then it should also offer a base insurance program, at cost.
Just one that covers the minimum insurance levels. If you want more, then you can buy more from an insurance company.
The Kruger Dunning explains most post on
I'd always thought it would be a neat idea to roll auto insurance in at the gas pump. No more uninsured drivers, plus it would be an incentive to reduce driving. obviously LOTS of holes in the plan, but it would eliminate the big brother aspect of this proposal.
Insurance companies already charge more if you drive more; all of them that I know of ask how much you drive. I actually started to RTFA, but there's little to no explanation of what the "pay as you go" does, and as I don't live in California it's not likely to affect me unless it's adopted by other states.
Can anybody clarify for me?
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Sunday drivers have got to be the most dangerous people on the road.
Someone who drives 100K miles a year is going to have a lot more miles between accidents than someone who does 5K.
I'll see your Constitution and raise you a Queen.
I would have no problem with this if people were actually given the choice of whether to sign up for a pay-as-you-drive plan, but as it stands, this hurts consumer choice without any real benefits. It is unlikely that people will really drive less, because they still need to get to their jobs and to stores that are miles away from their homes. If we want people to drive less, we should be investing in mass-transit systems which will help them do that, thereby increasing consumer choice rather than decreasing it.
I dunno about others, but all of a sudden, I'd have an incentive to find the shortest router from point A to point B, even if that means city-streets instead of expressway. This means I'll be sitting in heavy traffic, clogging up the streets, taking longer to reach my destination, and probably causing more accidents and safety issues.
bah... you could run every car on earth 24/7 and it wouldn't do half the damage as the 2 real issues behind any climate change we may be seeing.
1. Big AgBusiness.. The crap we're allowing these mega corps to dump into the water, killing a key filter our planet uses for processing O2 and CO2, is a war crime w/o a war.
Big Agbusines pt 2 .. 7 football fields of old growth forest cut down every *day* in South America.
2. The acre after acre of tropical vegetation we've poured Agent Orange on in central and south america in the name of our 'war on drugs'.. Yes, lil timmy won't be able to get as much pot after school, but he'll need to take a boat to get home.
I have no issue with the people of our planet collectively tackling the issue of climate change. I do have an issue with making up fake boogy men and ignoring the real ones that only have better lobbyists on their side.
You think insurance companies will lower prices for the average Joe with this? I think not. Their claim experience isn't going to change, and they need to charge X dollars to all customers combined so they make a profit. They're still going to need to charge X dollars, so what's going to happen? Heavy drivers will pay *more*, and everybody else will pay about the same as they are now. Bah!
ON DELETE CASCADE
WTF? Am I missing something? Last time I got insurance for a vehicle (in California!), the guy writing the policy asked me how many miles I expect to drive per year. They have a number of mileage brackets that are used in the calculation of your premium. The more miles you drive in a year, the more money you pay. Back in the before time, I had a classic car that was a weekend ride. Insurance was cheap because it was classified as "pleasure use" and driven less than a thousand miles per year. I don't think I've ever had a situation where the estimated annual mileage wasn't used to calculate the premium.
I dunno about others, but all of a sudden, I'd have an incentive to find the shortest router from point A to point B, even if that means city-streets instead of expressway. This means I'll be sitting in heavy traffic, clogging up the streets, taking longer to reach my destination, and probably causing more accidents and safety issues.
Interesting. Perhaps we should base it on a combination of milage and total engine revolutions. I've always wanted an RevOdometer (or hours of operation meter) on cars anyway. That way you could tell if the used Crown Vic you're about to buy was used mostly on highway trips to and from Minnesota to Florida, or used as a taxi cab.
Lucky you. Back when I had a long commute -- despite the fact that I took mass transit to my office (with a two-mile drive to the train station) my insurance company assumed I drove to my office each day. I provided train receipts, pictures of my odometer, etc... I offered to have their agent inspect my odometer in person... but to no avail. They based their rates on a 120-mile round trip despite the fact that I drove four miles daily.
I eventually switched insurance carriers, but I overpaid on my insurance for six months because those douchebags couldn't grok the idea that someone might take mass transit even when they own a car.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
I agree. Odometer checks seem far less invasive, and cheaper, than GPS. Also, already illegal to tamper with, while I can think of all sorts of ways to interfere with GPS tracking.
OK so assume CA mandates this and then follows up with mandating a law that requires every vehicle in CA to be fitted with some kind of GPS or similar tracking device:
1) What happens when the tracker in my car suffers some kind of *mysterious* electronic failure? Am I going to be fined?
2) Who is going to pay for the tracker and the installation?
3) What happens when a faulty tracker drains the battery? (Oddly enough I've seen this happen in a fleet vehicle)
4) How do I get the lucrative contract to maintain this massive tracking infrastructure system?!!
5) Anyone want to bet that this gizmo won't also be recording speed - insurance companies probably value that info more than distance. Betcha law enforcement will have de facto rights to query your gizmo right there on the spot when they pull you over - probably have a built in blue tooth so they don't even need to get out of the cruiser to write you up.
We're already paying per mile in the form of taxes on each gallon of gas we buy. They must be gearing up to address the revenue threat posed by the as-yet impractical plug-in hybrids. Crappy idea all around in my opinion.
If there was any kind of mass transit, I would take it vs. the 2 hours I spend behind the wheel each day. I'll go out on a limb and say I'd take it at the cost of an additional 30-60 minutes transit time; at least I could get stuff done on the bus/train and I bet I'd have lower blood pressure to boot.
This driving close to home bit sounds dangerous!
Um, how is it weighted by relevent statics if the insurance company currently doesn't know the miles driven?
I don't follow you. My insurer knows how many miles I drive per annum (well, within a bracket) because I fill in the details on my insurance renewal every year. I imagine they perform at least some checking up on at least some people who get in accidents so as to make sure that the information is at least broadly true.
To summarise the summary of the summary: people are a problem. ~ h2g2
MyRate by Progressive (as mentioned in the summary) has been around for quite some time (in select states) and I am a longtime customer. Here is how it works:
You get a computer chip that installs on the ODBCII port on your computer. Every 6 months (when you renu your policy), you pull out the chip, plug it into your computer via USB, and upload the data with your policy renewal request. You can view charts of your driving speeds, times, etc.
Progressive then offers you a discount percentage off of your base premium. They have an explicit policy that utilizing this chip cannot INCREASE your premium, only give you the option of a discount (in other words, we overprice our policy, but give you an option to recoup it if you drive less)
The discounts are as follows:
5% = participation discount
5% = safety discount (stay below 75mph and the discount is yours)
up to 10% = based on driving time / milage.
The 10% is calculated roughly as such.
At the beginning of the tracking period, you are given a 10% discount. then for every mile you drive, that percentage is reduced by a fraction. That fraction (something around 0.0006% per mile) is determined based on the time classification you drive. they have 3 classifications of driving time, low, medium, & high. High are times such as rush hour, and overnight, medium are weekends & lunch hour, low is everything else.
Ultimately, with both the safety discount and the amount I drive, I end up with somewhere around a 16% discount off my policy renewal.
It can be compared to the california policy, but in reality the current offered program seems quite different from the proposal.
The premise is faulty. Open highway driving is far safer than inner-city rush hour traffic.
You need to consider the conditions, not just the distance.
-Jeff
Please learn the difference between a dissenting opinion and a troll before you moderate.
I've combed through the 108 comments so far that have been modded 2 or above, and not a single one of them shows any awareness of what the article actually talks about. Has anybody actually read the article? Oh, wait, this is slashdot...
The article helpfully explains that the main issue being raised by the EFF is privacy. Um, it's not exactly subtle...the article has a big image of a poster with a man's face, with the slogan "BIG BROTHER IS WATCHING YOU."
What the EFF is objecting to is the idea of using electronic monitoring to measure the number of miles driven. The article (remember that article thingie? it's got that little underlining thingie, with the text in a different color, so you can click on it, and it's, like, a hyperlink, so you can go and read it?) lays out some objections to this, such as the tendency the government has demonstrated since 9/11 to go nuts with intrusive monitoring of its citizens. The concern is that the government will then be able to tell where every citizen drives. That's pretty darn scary, if you think about it.
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Said it before, I'll say it again: I will NOT consent to tracking devices of ANY sort installed on ANY vehicle I own. Period. They can kiss my ass.
Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
One of the key points is that driving the city streets causes more accidents than driving the freeway.
I really doubt that people will avoid freeways like the poster says, though. I think the extra gas used, the time wasted, and the additional risk of accidents outweigh the small advantage in insurance costs.
It's good to see that California isn't letting their impending bankruptcy hold back their socialist agenda.
I lived in LA for 6 years. California is probably one of the worst places to try to implement this program as: (1) they have a massive amount of urban sprawl, (2) Los Angeles has incredibly inefficient public transportation, (3) and there are broad swaths of the state where driving is almost a necessity for people who can't afford to live in the communities that they work in.
Is this really such a problem that is needs to be addressed right now? As others have said, there are going to be no deals here. Insurance companies will make sure that they profit over this little experiment. Furthermore, the state officials may mean well, but the federal government has shown that they will not hesitate to violate our privacy. Why give them another mechanism to do so?
But what really puts the cherry on the cake are the little comments that this will reduce CO2 emissions. Newsflash: Most people don't drive more than they need to, and the ones that drive for fun are just going to pay the tax and keep driving. Why does every method for reducing CO2 emissions have to involve punishing people while giving money to industry for absolutely no innovation? Do you think I like sitting in traffic with 3 other carpoolers? Build some efficient public transportation that actually works and people will take it. Reduce urban sprawl by not allowing people to build homes anywhere they feel like. Those are the techniques to reduce driving. Look at NY city. Look at all of Europe.
Historically insurance originated as part of the mercantile economy of the British Empire. A ship was an expensive thing, and the loss of a ship could ruin a middle class merchant. So they'd buy insurance--basically they'd pay a fee to a wealthy noble who would then gaurantee the value of the expedition--if the ship sank, they wouldn't lose anything. The amount they paid would be proportional to the risk of losing the ship, the value of the ship/cargo, and plus a margin of profit. Without that profit there'd have been no point for the nobleman to enter into the deal, and the state certainly wasn't about to assume to risk for the merchants.
You're leaving out Lloyd's, which was the most crucial link in the story.
Technically, the ship owner would approach Lloyd's of London, and they'd send a guy out to look at the ship and its crew. They'd then do some calculations based on the sailing date and expected weather, and come up with a price. The ship owner would pay the price, and Lloyd's would take a cut.
Lloyds THEN would turn around and sell all of the risk on the trip. They'd approach (as you say) a rich guy and offer to give him money in exchange for the rich guy to assume some or all of the risk on the trip, telling them the relevant details (good captain, but might run into storms, etc.)
In such a fashion, Lloyd's never had any risk at all, because they'd sell off all of the risk to others.
If the voyage did well, the rich guy(s) got to keep the money paid to them by Lloyd's, Lloyd's keeps their cut, and the ship owner has his ship. Everyone's happy. If the ship sinks, a well dressed gentleman from Lloyd's visits the rich guy(s) and tells them to pay up.
It still works that way today. If you're a wealthy Dubai tycoon, Lloyd's will happily pay you a nice sum of money to assume the risk on, say, an oil supertanker about to sail around the world.