SACRAMENTO — An alliance of insurance companies and environmentalists wants to bring a new kind of mileage-based auto insurance to California and charge motorists only for the number of miles actually driven.
Called pay as you drive, the option is available from a few insurers in 34 states -- but not California -- as well as Canada, Japan and Europe.
One company, GMAC Insurance Group, says its customers -- whose mileage is tracked by General Motors Corp.'s OnStar system -- have reduced the premiums they pay by 13% to 54%. And California drivers could expect to get similar savings if pay as you drive is approved here.
The system could cut motoring costs, protect the environment and reduce traffic congestion, boosters say. Opponents, mainly privacy advocates, say they fear that insurance companies could begin tracking more than just a driver's mileage. High-mileage drivers could also see higher rates.
People who agree to tie their insurance premiums directly to miles driven are likely to make the maximum effort to stay out of their cars. That way, proponents say, they'll save money on gasoline and insurance, the top two costs of owning a car.
"I'm getting good savings," said Mark Holcomb, a retired federal worker, who recently moved from San Diego to a suburb of Orlando, Fla. "I'm not driving so much, so my likelihood of an accident is lower."
Holcomb said he cut his insurance bill by $634 a year for his Cadillac Escalade and his Saab convertible by switching to a GMAC pay-as-you-drive policy.
The concept, if applied nationwide, would do a lot more than cut insurance bills, says a study by the Brookings Institution, a Washington think tank. Pay as you drive could create $52 billion in annual benefits from fewer accidents, reduced traffic and pollution, and less reliance on foreign oil, the study concludes.
"This is a tool to reward drivers who actually drive less," said Assemblyman Jared Huffman (D-San Rafael), the author of a bill in the Legislature, AB 2800, to authorize pay as you drive in California.
Huffman's measure is sailing through the Legislature with little opposition. State Insurance Commissioner Steve Poizner is working on regulations that would put a similar proposal on the books.
Pay-as-you-drive skeptics say they're all for reducing auto use but are wary about how insurers might keep tabs on their customers. Others worry that the deep discounts offered urban drivers, who don't use their cars much, could be offset by making rural motorists pay more.
