Pay-as-you-drive (PAYD) car insurance is a nifty idea that charges you for car insurance based on the miles you’ve driven. Sightline has been pushing this idea for a while, on the idea that it will encourage less driving.
Now they’re looking for people to take part in the first PAYD pilot program.
PAYD’s bigger, more ambitious cousin is the Vehicle Miles Traveled (VMT) tax, which would replace the gas tax. VMT, whatever its policy merits, is politically toxic. President Obama had to distance himself from Ray LaHood when the Transportation Secretary mulled the idea in public, and it almost cost Mike O’Brien his city council seat.
While I do think it’s important to pursue different revenue sources for transportation funding in an era of increased fuel efficiency, the VMT tax is not a hill I want to die on right now.
PAYD, on the other hand, is a nice middle ground: it’s voluntary, economically efficient, and will likely reduce driving and congestion.
I have something related to that already through Allstate. It’s not exactly the same because it doesn’t keep track of millage but it’s a similar idea. Basically it’s only insured for a couple days a month and I have to notify them before I use it or it’s not insured that day. And for this it only costs about 1/10th as much I think.