Pay-as-you Drive Insurance Is Closer Than You Think

A help to millions of drivers, burdended by overbearing car insurance costs is on the horizon, and could be a reality very soon.

Pay-as-you-drive car insurance, a idea that allows motorists to purchase coverage on a per-mile basis, is getting lots of attention as one answer to rising gas prices and growing commuter traffic.


With the pay-as-you-drive concept, insurers will factor in such criteria as your driving history, vehicle type and geographic into a per-mile price, which will range between 2 cents and 10 cents a mile. Your mileage readings will be recorded with onboard sensors in cars or odometer readings.

People in favor of the plan say that if drivers could save on premiums by reducing distances driven, instead of paying a large annual or semiannual policy charge, whether the miles are driven or not, drivers would probably take fewer trips, or more likely use other means of transportation.

Several findings have determined the idea could reduce overall driving by around 10 percent.



Says Dean Baker, director of the Center for Economic and Policy Research, in Washington, D.C., "It's almost a no-brainer when you look at reducing gasoline use and conserving oil."

The state of New Jersey has never looked into a "pay-as-your go" car insurance premium idea, even though it boasts the country s highest average car insurance rates.

In the year 2003, the average person in New Jersey paid $1,188 a year for their car insurance premium, a whopping 44 percent above the average in the U.S. In that same year, state legislators passed a law that partially deregulated the New Jersey s auto insurance market, which had, at that time, a reputation for excessive bureaucracy in the car insurance industry.


Study findings at the Georgia Institute of Technology found that 27 of 43 states would be legally permitted to offer pay-as-you-drive insurance. Those states included Alabama, Michigan, Ohio, Oregon and Pennsylvania. In other states, the study found that state laws would need to be revamped to allow pay-as you-drive insurance.

By: Gary Hollins -

Article Directory: http://www.articledashboard.com

Get a free online car insurance quote at Insurance-Info-Center.com, and read hundreds of articles on car insurance and how to save!