Insurance by the Mile

A simple way to slow global warming

The world must reduce its consumption of fossil fuels in order to avoid the worst effects of global warming. This will require many long-term and expensive measures to promote alternative fuels and conservation

Currently, auto insurance is viewed as a fixed expense. People pay the same amount for their insurance no matter how much they drive. This means that when someone is comparing the cost of driving to work with the cost of carpooling or public transportation, they won’t factor in the cost of insurance, because they will pay the same whether they make any particular trip or not.

This would change if drivers paid for insurance by the mile. Taking rough numbers, the average person drives her car around 10,000 miles a year and pays a bit less than $1,000 each year for insurance. This means that the cost of insurance is approximately 10 cents per mile. If for each mile they drive drivers paid 10 cents for insurance, then on average they would pay the same amount for insurance as they do now