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Globe Editorial

Driving: No 'pay as you go' premiums

(Istockphoto)
January 13, 2011

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The state’s ambitious commitment to reducing greenhouse gas emissions has led to some creative policy proposals, but one that shouldn’t get out of the garage is basing a car’s insurance premium on the number of miles it is driven.

Premiums now reflect such factors as a driver’s place of residence, experience at the wheel, and safety record, with some insurers offering discounts when motorists drive fewer than 5,000 to 10,000 miles a year. As things stand now, this system can be unfair to a driver with an unblemished record who happens to live in a high-premium area. What if on top of that the driver also had a daily commute of 30 or 40 miles?

A report by outgoing Energy and Environmental Affairs Secretary Ian Bowles argues that, overall, wealthier drivers run up more miles than middle- or lower-income drivers. But such numbers are of little solace to a carpenter living in Dorchester and working on projects on Cape Cod. And there is no direct connection between miles driven and risk of accidents.

Pay-as-you-drive insurance, as the proposal is called, looks suspiciously like a back-door way to reduce auto emissions while avoiding a politically unpopular hike in the gasoline tax. But there is a big difference: When drivers face a higher gas tax, they can simply choose to buy a car with better mileage, thereby meeting their travel needs and helping reduce greenhouse gases at the same time.

Bottom line: The state shouldn’t fiddle with a system of auto-insurance premiums based on risk of accidents, rather than abstract policy goals. Better to find another way to cut greenhouse gases.