'Stupendous Potential': Pay-Per-Mile Auto Insurance Would Cut Costs And Traffic Violence - Streetsblog New York City

"Everybody is better off, you've got less crash risk, less pollution and less traffic congestion, because you're rewarding this very good thing, which is mileage reduction. It has absolutely stupendous potential, and so it's shocking that it hasn't gotten a lot of traction."

"A per-mile cost reflects the actual economics of how risky the activity [of driving] is [so] most people would choose to drive less. Pay-as-you-drive insurance saves money because drivers' premiums are based on how much they use their car, putting a direct price tag on the inherently risky activity of operating a two-ton vehicle."

Governor Hochul is pursuing a tech-backed approach to reduce auto insurance costs by limiting crash victims' rights, but a more effective alternative exists: pay-as-you-drive insurance. This policy charges premiums based on actual miles driven rather than flat rates, directly pricing the risk of vehicle operation. Research shows this approach could cut driving by up to 30 percent among high-risk motorists, reducing crashes, pollution, and traffic congestion simultaneously. Experts emphasize the policy creates a virtuous cycle of safer streets and cleaner air by incentivizing mileage reduction. The approach saves money because per-mile costs reflect actual driving risk, encouraging people to drive less. Insurance companies may resist this policy due to potential profit reduction, explaining why it hasn't gained political traction despite its documented benefits.

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