Manitoba insurer urged to consider 'pay-as-you-drive' insurance

This is from the CBC.
This is an interesting idea but as the Autopac representative points out Manitoba has a vast rural area with very little public transport and where a car is virtually a necessity and travel unavoidable. On the other hand about half the population is in the city of Winnipeg.
The scheme might involve considerable oversight since some one has to track and check mileage. I expect that it would be more costly. This cost no doubt is passed on to those purchasing the insurance. I am a bit surprised by the lack of enthusiasm of the Autopac people. The scheme might lower their payouts. The government monopoly insurer already has an extensive scheme in place to pay for immobilisers to prevent thefts.
Overall, being a rural resident, I worry that the scheme would make driving even more expensive for us when it is a necessity. The cost of gas, repairs, and insurance is already enough incentive to cut down on unnecessary driving.
Anyway the scheme seems worth further study.

Manitoba insurer urged to consider 'pay-as-you-drive' auto insurance
Last Updated: Wednesday, January 16, 2008 | 4:30 PM CT
CBC News
Environmentalists in Manitoba are urging the province's public vehicle insurer to consider "pay-as-you-drive" car insurance to provide an incentive for motorists to drive less.

The system, already used in jurisdictions including California and the U.K., sees drivers pay based on the number of kilometres they drive.

Under Manitoba's system, two drivers living in the same area with identical cars and driving records would pay the same auto insurance bill, even if one drives five times as far. Manitobans pay an average of $833 per year for auto insurance.

Peter Miller, a retired University of Winnipeg professor, says that's a bad system, especially as governments try to battle climate change.

"It provides a way of saving money by driving less, and if you drive less, you reduce your emissions: Very simple," said Miller, who urged Manitoba Public Insurance to implement the system at recent Public Utilities Board hearings.

The system would provide a financial incentive to car owners who drive less, creating fewer vehicle emissions, proponents say, and it could reduce traffic and the strain on crumbling infrastructure.



It makes sense for insurers, said Miller, because less time on the road means fewer chances for accidents to happen.

"When my car was sitting in the garage 20 minutes ago, there was very little chance of it running into anyone, or any other vehicle," he said. "If I'm out here in the road, particularly if I were driving, there's more of a chance."

Carole Thiessen, a mother in the city's Wolseley neighbourhood, thinks it's a great idea.

"There are times when we could walk or could take the bus, and you know, it's just a little bit too easy to get in the car," she said, noting that her family has already taken steps to reduce the amount of driving they do.

"We didn't want to have to drive our car from distant suburbs, so we try to do our little errands in our little neighbourhood," she said. "We've chosen our house centrally so we can walk to work and all those sorts of things."

Vehicles necessary in Manitoba: MPI
However, MPI officials are opposed to the idea.

"I think pay-as-you-drive auto insurance is an interesting idea in communities where using your automobile is a luxury, and not a necessity," said CEO Marilyn McLaren.

"For example, centre of London, England — nobody needs an automobile. That's not true here in Manitoba."

McLaren added there is no evidence that people who drive more are more of an insurance risk, pointing to long-distance haulers, who are often excellent drivers.

But Miller sad MPI can't know that for sure, since they don't record mileage in their system.

"They're operating from ignorance because they don't have the statistics to test it out," he said.

McLaren told a Public Utilities Board hearing in October that MPI's position is, "If environmental concerns … are to be taken into account in rate setting, this is an issue of social policy, and direction would be required from the government before the corporation would be justified in moving to those types of concerns."

Dave Chomiak, the provincial minister responsible for MPI, declined to comment, but said pay-as-you-drive auto insurance is being studied.