San Francisco says NO to pay as you drive


Key insurance regulators in San Francisco announced their reaction regarding the issue on enforcing emissions-cutting car insurance; and their reaction is a big NO. According to sources, San Francisco regulators do not want to mandate the insurance industry to start offering auto policies that aims to cut back on emissions by having clauses that rewards drivers who drive less. Regulators also even said no to future plans of offering such policies, often referred to as “pay-as-you-drive.”  According to reports, San Francisco will need more time before it will accept this idea of helping environmental movements by controlling auto insurance.

San Francisco says NO to pay as you driveGoing back to the issue of emissions-cutting auto policies, San Francisco is not the only state that shies away from this idea. California also refuses to require insurance companies to offer such policies, but those who want to can do so.

Pennsylvania’s Insurance commissioner and National Climate Change Task Force chair Joel Ario, said in an interview that he doubts that pay-as-you-drive policies will ever be required. According to reports, Commissioner Ario and other state regulators spent months of research to know about this– the idea that states that drivers have strong tendencies of leaving their vehicles at home if their insurance premiums will go down in proportion to number of miles they drive. Not only will this “drive less” concept lessen traffic, it will also affect transportation sector’s output of carbon gases, which scientists now speculate to be the source of 28% of US’ greenhouse gas emissions.

After research has been completed, Ario presented this idea to a number of regulators and it was himself and Washington State Insurance Commissioner Mike Kreidler, who became the biggest supporters of this concept, which was later on translated to pay-as-you-drive. On the other hand, no matter how much they believe in the idea, Ario and Kreidler mentioned in recent interviews that they are still hoping that insurance providers would be willing to adopt this concept on their own as there are still a number of states who refuse to accept this idea.

During the recently concluded National Association of Insurance Commissioners climate summit, Ario said that he believes that if the industry is given enough time to be open, innovative, dynamic, and more susceptible to change, the best results in both auto insurance and environmental goals will be achieved.

While a number of companies are now offering ‘pay as you drive’, some still refuse to use it since may hurt their income goals for 2009. Experts say that the only way to make sure that all providers sell pay as you drive policies is if state law requires it.