People that drive will do anything to try and save money as the cost of driving goes up and down. Some have opted to use public transportation or form a carpool. Despite the fact that these are big ways to chip away at the price of gas, in no way does it solve the problem as a whole.
Car owners are still stuck paying for car insurance coverage even when their driving is very limited. Essentially, auto insurance indicates a monthly bill, regardless of the time that is spent on driving.
New options for auto insurance are being explored and tried. Various states are experimenting with a new insurance plan called pay per mile auto insurance.
The cost of this insurance is calculated against the number of miles that are driven. A plan such as this would stand to benefit drivers and insurance companies alike. Rates will be based on how many miles you drive so flat rates will be history.
These drivers would be able to have additional power over the costs associated with their car insurance plans. Discounting the costs for people who use other forms of transportation is good news to the ears of many. The cost for everyone will be reduced.
What type of system would be enforced to determine the number of miles that one drives? Obviously whatever system is decided on will have to be tamper proof.
The details are not set in stone yet but it is suggested that either an odometer would be installed by the insurance company that would directly report your mileage to the insurance company or they could use something like a GPS system.
Those that will get the biggest price cuts will be those that travel the least. It is likely that the biggest savings will be given to drivers that travel less than 15,000 miles annually.
People that have been using other methods to get around would actually be rewarded in the form of serious reductions on their insurance rates. Arizona, Indiana, Illinois and Pennsylvania are currently the only states that have adopted this plan.