At the time of writing this blog post there is much less travelling taking place in New York. Icy cold weather and blizzards have brought traffic to a near standstill and closed airports in and around New York. This is however not a regular occurrence – usually traffic is hectic at the best of times and traffic congestion a major concern to city authorities.
We have found some interesting information in an article by Jeremy Olshan in the New York Post about car insurance and the potential benefits of reducing traffic congestion in the Big Apple. The Bloomberg administration is considering measures to reduce traffic, and Pay As You Drive or mileage based car insurance are believed to be important tools in the fight against traffic congestion.
Pay as you drive (PAYD) / Usage based car insurance means that the insurance premium is calculated dynamically, typically according to the amount you drive.
Olshan says that these policies have been available around the country for a decade, but not in New York. Yesterday, the city’s Department of Transportation put out a request seeking ideas on how to use “mileage-based insurance pricing signals to trigger change in driver behavior.”
According to a 2008 study by the Brookings Institution, these incentives could reduce driving by as much as 8 percent, reduce emissions by 2 percent, oil consumption by 4 percent, and provide an average savings of $270 per car.
“A one-size-fits-all approach doesn’t make a lot of sense when it comes to pricing insurance,” Transportation Commissioner Janette Sadik-Khan told The Post. “Paying based only on how much you drive is a potentially innovative way to make it less expensive for New Yorkers to get around.”
Critics of the Pay As You Drive insurance schemes have expressed concerns about the invasion of privacy that comes with the more advanced telematic monitoring devices.
Even the critics however have to confess that PAYD is a money-saver for many people who don’t drive a lot!