Affordable, Innovative Insurance Will Also Reduce Pollution

(18 December 2002 — Washington D.C.)  If you drive fewer than 10,000 miles per year, chances are you’re paying more than your fair share for car insurance.  Pay-As-You-Drive (PAYD) insurance, an innovative concept that links insurance polices to an odometer rather than just a date on the calendar, can fix this inequity.  Consumers now have the web-based tools to convince insurance companies and elected officials to bring PAYD insurance to their communities.  The new content can be viewed at www.environmentaldefense.org/article.cfm?contentid=2205 on the Environmental Defense web site.

“Mileage-based car insurance could, at no cost to the public sector, reduce driving, air pollution and traffic congestion by 10% or more,” said Michael Replogle, transportation director of Environmental Defense.  “A reduction in driving will benefit the 142 million Americans who live in areas where the air they breathe puts them at risk.”

Consumers deserve the opportunity to buy auto insurance policies that better reflect their risk, allowing them to save money and the environment by driving less.  Environmental Defense encourages consumers to demonstrate to insurance companies that a market for PAYD insurance exists by taking the Pay-As-You-Drive Pledge online at www.actionnetwork.org/campaign/payd. 

PAYD makes insurance more affordable by giving drivers control over their premium.  Giving drivers a monetary incentive to drive fewer miles will decrease their insurance premiums and will lessen their annual fuel and maintenance costs.  PAYD alleviates the problem of uninsured motorists by making it easier for low-income drivers to buy small increments of insurance.

Premiums are more equitable with PAYD.  Under the current system, low-mileage drivers, usually low-wage earners, seniors, carpoolers and bus riders, subsidize the high-mileage, high-claim drivers.  New data suggests that the number of miles driven better reflects a driver’s risk of being in an accident.  PAYD is also expected to increase safety by reducing crashes by 17%.