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."
Not just privacy concerns (Score:5, Interesting)
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.
insurance at the gas pump (Score:5, Interesting)
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.
Re:Oh crap. (Score:2, Interesting)
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.
Re:Bell curve??? (Score:3, Interesting)
Actually, from what I recall this is not the case.
Most accidents happen within, I think it was five or ten miles of a person's home.
So, just because people are driving "less miles" doesn't necessarily equate to "less risk" if the above is true (or at least close).
Re:Oh crap. (Score:2, Interesting)
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.
Re:Not just privacy concerns (Score:3, Interesting)
They do that here in Quebec. A level of liability insurance is provided by the province and is bundled into your car registration fee. I think some of it is also built into your drivers license fee, which is interesting, because it means you effectively pay a base insurance premium to have a drivers license, and a higher premium if you also have a car of your own.
Insurance by the mile is in Texas (Score:1, Interesting)
I'm using Milemeter.com in Texas, it's billed by the mile. I'm paying about half of what I payed my previous company with same coverage.
But it only works people driving under 12k a year.
Re:Privacy? (Score:4, Interesting)
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.
Re:Bell curve??? (Score:3, Interesting)
Re:I drive exactly as much as I need to (Score:2, Interesting)
Um, I believe the problem was that gas prices rose, people didn't (or couldn't cut back) and that this likely contributed to the recession. Remember, most agree it started in 2007, when prices were climbing. It wouldn't be suprising that as people were paying more for gas they were spending less on everything else (and the oil companies pocketed the profit).
Re:Bell curve??? (Score:2, Interesting)
Use trips, not miles (Score:1, Interesting)
Use number of trips, not miles -- just like when comparing whether airlines are safer than cars:
http://www.midtod.com/98autumn/airline.phtml
Re:This system is already in place! (Score:3, Interesting)
While they don't currently monitor your mileage with some kind of device, they don't exactly just take your word for it. You're asked for you odometer reading, and the mileage you expect to drive. While you could lie about odometer reading, if it's grossly off and you make a claim they'll find out what the odometer really reads when the car goes into the shop. At that point I guess they could deny the claim based on your false statement on the application / renewal form.
Yes, I know this is far from fool proof. You could tamper with the odometer, get the shop to report the wrong number, switch insurance frequently and give low mileage to the new company in anticipation of driving lots of miles etc. etc. However, I imagine it discourages many potential scammers.
Insurance is expensive in CA and many people do try scams to avoid paying high rates. It's always a gamble though. For instance many people register their car at the parents address back home in Iowa or where ever. This gets them cheaper insurance rates and cheaper registration; however, when they make a claim the insurance company often figures it out and denies the claim. Similarly with the mileage, you could lie about lower mileage to get cheaper rates, but you're gambling that you won't have a claim and/or that they won't catch you. If you end having to pay a few thousand in repair bills out of your own pocket, that offsets saving a few hundred a year pretty quickly.
Re:Bell curve??? (Score:3, Interesting)
Because Jim was born a girl.
Re:how could it save... (Score:3, Interesting)
Why don't we just add it to the gas prices then? gas price + sales tax + insurance + road tax
We'll have insured cars driving on paid for roads that help pay for police and schools while reducing CO2
Re:Bell curve??? (Score:4, Interesting)
But it does have something to do with the accident rate.
Maybe more aggressive people tend to buy a certain kind of vehicle.
Maybe some vehicles are more prone to flipping over in accidents.
Maybe some vehicles have lower accident rates on account of their anti-lock brakes and other safety features.
Insurance companies study these things, and their differences in rates are based on statistics. If they knew the future and could predict with perfect accuracy your future driving record, they could find the right rate for you personally every time -- but since they aren't omniscient, statistics are what we've got.
Re:Bell curve??? (Score:3, Interesting)
You're wrong. The EFFECT of insurance is to collectivise, but it is NOT the purpose. The purpose of insurance is to reduce risk.
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.
Insurance only effectively collectivises when it is widespread (i.e. when everyone has it). But that is a side effect, not the purpose.
Re:Bell curve??? (Score:3, Interesting)
Insurance companies study these things...
Then the government regulates what they can do with those studies.
Lloyds (Score:3, Interesting)
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.