California's Revised Pay-As-You-Drive Insurance Draws Continued Objections 411
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."
Bell curve??? (Score:5, Insightful)
I drive exactly as much as I need to (Score:5, Insightful)
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.
how could it save... (Score:5, Insightful)
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.
Less driving = lower risk? (Score:3, Insightful)
I don't get it (Score:4, Insightful)
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?
But that is nonsensical! (Score:4, Insightful)
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.
Choice (Score:2, Insightful)
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.
Re:Oh crap. (Score:5, Insightful)
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.
Re:Bell curve??? (Score:5, Insightful)
I know it is common practice on Slashdot to speculate beased on no more information than your initial gut reaction, but this sort of thing is actually the core business of insurance companies. They have people who are quite skilled statisticians, call actuaries, who fiddle over mountains of data to decide how much to charge who in order to maximize profit while still being able to offer comeptitive premiums.
Because you know what a bell curve is doesn't put you in league with these people and your elementary passive aggressive questions do nothing to further anyone's understanding of anything. Not even your own.
Lower Prices my Ass (Score:3, Insightful)
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!
Re:Bell curve??? (Score:5, Insightful)
Even if driver safety is inversely proportional to driving time, it is so at some ratio less than 1:1.
That is, consider 3 people. Bob drives 1 mile a year, and has a 1% chance of getting in an accident for every mile he drives. Tom drives 100 miles a year and has a .1% chance of getting in an accident for every mile he drives. Jim drives 10000 miles a year and has a .01% chance of getting in an accident for every mile he drives.
Bob is going to get in one accident every 100 years. Tom is going to get in 1 accident every 10 years. Jim is going to get in 1 accident every year.
To be more realistic I would say decrease the %s by a factor of 1000, and increase the miles by a factor of 10.
Why does Bob's insurance cost almost as much as Jim's, currently?
Re:But that is nonsensical! (Score:5, Insightful)
The insurance company doesn't care how many miles you drive between accidents, it cares about how many accidents you have between years.
This system is already in place! (Score:4, Insightful)
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.
Re:Bell curve??? (Score:3, Insightful)
Re:Less driving = lower risk? (Score:3, Insightful)
Couldn't you say that a driver who drives less has less driver experience than somebody who drives more?
Certainly.
Therefore the driver who drives less could be a higher risk?
Not necessarily (and apparently not - unless you can think of a good reason why the insurance companies would lie in a way that would cost them more money by misclassifying risk).
Remember, what an insurance company considers "risk" and what you (as a road user) consider "risk" are not the same thing. The insurance company is concerned about their profits. You are concerned about your life.
Re:I drive exactly as much as I need to (Score:3, Insightful)
Why would anyone think that paying by the mile would reduce the amount I'm driving?
I doubt anyone in this situation has concerned themselves with you specifically, but I imagine they base their expectations on the rise in gasoline prices a couple of years having shown that its price elasticity of demand wasn't quite what everyone thought. Since demand for gasoline dropped sooner than expected it is true that cost per mile will eventually force people to cut back on driving.
Re:Bell curve??? (Score:5, Insightful)
Most accidents happen within, I think it was five or ten miles of a person's home.
Most driving happens within five or ten miles of a person's home.
Re:Bell curve??? (Score:3, Insightful)
"How is someone who drives less better at driving?"
The same way someone who's learned how to ride a bike doesn't suddenly stop knowing how to ride a bike. Driving is not difficult, and I imagine if you did a study of infrequent drivers, there would be small re-adjustment period (for things like parallel parking, etc) before they reached the levels of long time drivers, but for regular driving their would be a negligible difference.
Re:Less driving = lower risk? (Score:4, Insightful)
Cost them money? Not likely. Mark my words, they'll charge people that drive less the same that they pay now, and charge people that drive the most even more.
Re:insurance at the gas pump (Score:3, Insightful)
"but it would eliminate the big brother aspect of this proposal."
It wouldn't, you'd just replace one big brother (government) with another (corporation) it amazes me that americans think private corporations have their best interests at heart, ever looked at the kind of security and monitoring equipment in many modern businesses? The analyze everything about you're shopping for instance.
Quite frankly there is no privacy once you walk into a corporate building or store for instance.
Re:Bell curve??? (Score:5, Insightful)
What's the Penalty? (Score:2, Insightful)
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.
Re:Oh crap. (Score:2, Insightful)
As well as using more gasoline and causing more pollution. When you're stopped at a red light you get zero mpg. Unless you're in a hybrid, travelling down a street where there's a stop sign at every block could cause your 35 mpg car to get more like 5 mpg. If I go to the Walmart on the north side of town using Dirkson Drive, It's a shorter route, but as there are traffic lights and a 30-45 mph (varying) speed limit, I can use I-55 doing a legal 65 mph and get there faster, more safely, and using less gasoline.
Re:Lower Prices my Ass (Score:3, Insightful)
Rush Hour? (Score:4, Insightful)
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
Re:insurance at the gas pump (Score:3, Insightful)
You've just introduced location based tracking, whether you pay by card or cash.
Big brother indeed.
Re:Bell curve??? (Score:1, Insightful)
And banks are experts in managing risk...
California needs to back off. (Score:4, Insightful)
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.
Re:Bell curve??? (Score:4, Insightful)