Texas Environmentalists Praise By-the-Mile Auto Insurance Option

November 12, 2008

Contact:  Ramon Alvarez, Environmental Defense Fund, 512. 691.3408-w
Media Contact: Chris Smith, Environmental Defense Fund, 512.691.3451-w or 512.659.9264-c or csmith@edf.org
(Austin – Nov. 12, 2008) Environmental Defense Fund praised MileMeter for recently launching a pay-as-you-drive (PAYD) insurance program that will reward low-mileage drivers with lower premiums than traditional, flat-rate insurance.
Texans will become the first in the nation to have a “by-the-mile” choice of auto insurance that gives drivers the opportunity to save money while also protecting the environment. “Texas drivers now have a choice to do the right thing by their pocketbooks as well as by the environment,” said Ramon Alvarez, senior scientist with Environmental Defense Fund. “Pay-as-you-drive insurance policies help to increase our awareness of how many miles we’re driving and therefore, think twice before making an optional trip to the store, or better yet, walk, bike or use public transportation to get there instead.”
Traditional insurance offers 15 percent or less mileage-based discounts that don’t typically capture the full benefit of driving fewer miles. However, insurers are slowly moving in this direction. Progressive Insurance has in the last five months also launched partial mileage-based insurance policies in seven states, offering 40 to 60 percent mileage-based discounts. GMAC Insurance also offers up to 40 percent mileage-based discounts in several dozen states for motorists with On-Star equipped vehicles.
“By providing a strong monetary incentive to drive fewer miles, these policies also have the added environmental benefit of reducing traffic, air pollution, dependence on foreign oil and greenhouse gases that contribute to global warming,” Alvarez added.
A Brookings Institution report released in July estimates that if PAYD were offered to all drivers, it would save two-out-of-three households an average of $270 per car, result in an 8 percent decline in driving, reduce driving-related damages by $50 billion to $60 billion, and cut carbon dioxide emissions and oil consumption.