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Jul 10, 2009 -- California experimenting with pay-as-you-drive insurance

More auto insurers are experimenting with pay-as-you-drive insurance.

Progressive Insurance has been one of the pioneers in this field. They have a system where they can equip your car with a smart device -- almost like a black box in an airplane -- that tracks when, where and how much you drive (in addition to your driving style) in order to calculate your premiums.

Years ago, California had a proposal where the more gas you bought, the more you paid for auto insurance. Needless to say, the idea didn't work.

Now California is on to the pay-as-you-drive idea, with a number of big insurers trying it out. This is a completely voluntary program for drivers that they can opt in or opt out of.

Clark loves the idea of this type of insurance, though he realizes many motorists may have their reservations.

In another example, GMAC Insurance offers discounts to drivers of certain GM models if they agree to have their mileage tracked by OnStar.

Unfortunately, Clark won't be able to answer any questions submitted via commenting. If you have a question, please try posting it to our message boards.

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What others are saying

  • Pay as you drive
    I don't think anyone has considered those of us - Home Health Nurses and Therapists - that drive for a living. That would be an impossible cost for us and would lead to a decrease in care for the homebound. I have been a home health RN for over 20 years and have had only 1 accident. Just wanted to let everyone know, not everyone drives 5 miles to work!
  • California Pay-As-You-Drive Auto Insurance
    One small correction, and a few more details -- all of which may calm some of those making earlier comments.

    First, the Progressive system does not track where you drive. Their original version tested in Texas 10 years ago did, but since their next version tested starting in 2004, they do not.

    Second, the proposed California regulations do not even allow a device provided by an insurer to report location to insurers. Further, they only allow mileage verified by any of a number of means (including an electronic device) to be used in calculating the auto insurance premium.
  • Don't drink this Kool-Aid
    Put me in the "No" camp. Convenience at the cost of liberty is not a trade-off.

    The concern is that this will be a back-end mandate by charging non-equipped consumers a huge penalty.

    "But, I saved money" has officially replaced, "the trains run on time".
  • You non believers need to read 1984
    This is the kind of stuff in 1984
  • pay to drive insurance
    how is this any different than charging insurance rates based on your credit score? So I pay my electric bill 2 days late, does that make me suddenly an unsafe driver? Stupid logic on its face. both of these factors are totally irrelevant. Traffic tickets are also totally irrelevant.

    The only factor that matters is how many chargable accidents you have. Because the only way your insurance companies pays a single nickel is if you have a chargable accident.
    So why would driving habits, credit score or traffic tickets matter. If as the insurance companies say, that these factors make you have chargable accidents or are a valid predictor of accidents, why not just charge based on the accidents in the first place and fire the legions of pinheads on the payroll of insurance companies keeping track of and scoring all these totally irrelevant events?

    But the answer is simple. Insurance companies want to make their rating system mysterious. If it were easy to comprehend and totally transparent, the insured would be in control and not the other way around.

    If this invasion on everyone's privacy does not scare you out of your wits, it should. We will rue the day when insurance companies or government track your every move in the guise of safety or saving money.
  • Pay as you drive
    I like the idea. I drive 21.2 round trip a day and that's it so I'd be interested for sure, at least enough to look into the detils. I have nothing to hide and for those worried about it and calling Clark stupid, grow up. If you are not interested, don't sign up or seek it out. Quit losing your temper at Clark for offering people his opinion, that's all it is, his opinion, he's not saying everyone should do this.
  • Clark are you STUPID
    This is to trick consumers, in both its fascist mind-set and its economic incompetence, reflecting an abysmal lack of understanding of the role of infrastructure in promoting economic progress, and an intent to impose Big Brother-style surveillance measures upon the population. Rather than simply raising the gasoline tax, which would be the most efficient method for collecting more revenue, the commission proposes instead the creation of an entirely new, and tremendously intrusive and expensive, system of tracking the movement of every vehicle, and using that movement to calculate taxes. These new fees would use the behaviorists' pleasure/pain methods to punish drivers for driving in rush hour, or driving on congested roads, or driving cars with poor gas mileage.

    You are merely a temporary steward over your so-called possessions.

    Everything belongs to the state.

    They will do with their property as they desire.

    Illusions are wonderful.

    So is the American Dream.

    Also your moderator deleted my posts and banned me today. I'm sure you approve of this total orwellian society.

    What a joke, unfortunately I have a question so please tell me how I can post on "your" message board? Should I get a different user name? Like all the other clowns who post how much of a tip they should leave.
  • Who pays for the black box
    Ok so who pays for this black box? Does it become another item on my insurance premium? When I buy a new care how much are the car companies going to charge me for this black box?

    When the black box breaks and triggers an engine light problem. Who pays to fix the problem?

    What in the world makes you think something like this will save anyone money? Wake up!!!!! Become a consumer advocate again Clark. You make too much money and have no idea how much these things hurt the common persons wallet.
  • privacy is just myth anymore
    I wonder is the other criteria will apply, like one's age, area where one resides, the type of car one drives etc. Or are they basing the rate strictly on your driving behavior?

    By the way, Mr. Jim Rivers needs to chill out, stop attacking Clark personally...for $3.95 anybody can find out most of your life history now days. Privacy as we used to know it is gone.
  • Another dumb poll
    What makes you think they will lower premiums at all? Even if they did would it be worth the invasion of privacy. Wake up Clark. You need to be re-educated. Since becoming insanely rich you have lost any touch to the common persons problems.
  • More stupid from Clark
    On clarks site "Clark loves the idea of this type of insurance, though he realizes many motorists may have their reservations. "

    Clark is getting to be a real moron! Here he goes again wanting government to put something in "MY CAR" to track me. Why is Clark for all these stupid ideas? Doesn't he understand that all this does is take more money from us. This will in no way lower our insurance rates but make them higher and higher, the privacy issues also becomes apparent.

    Come on Clark stop being so stupid, and use your brain! I thought you were better then David Ramsey, but you are starting to be a real fool as well.

    Stop counting pennies at Dollar store and fight against all these nonsense money grabbing ideas. Give the people some real support on these issues.
  • Saving money
    As a low mileage driver, I have always wanted reduce my insurance rates and now I can. I just signed up for the Progressive MyRate plan. Now that I can prove it I want to get all that money back that I have been paying for years paying for all those bad drivers on the road!!
  • Auto Insurance
    Instead of purchasing auto insurance, add a fee to each gallon of gas bought then everyone would be insured.
  • Pay as you go!
    Dumb idea! It's just another way for the insurance company to squeeze more money out of your already pinched wallet. Do they tell you what the stipulations are? What constitutes "bad" driving in their eyes? If one has to accelerate over the speed limit to avoid getting hit by a big rig, will you be penalized?

    These are all valid questions. However, the company will promote it as a cost saving device. Sure, you may save some coin if you drive like grandma does. But the real world doesn't move that way. And that is what these companies are banking on!
  • California is a communist country within the US why be like them. If we keep wanting to be like California we will end up like them. So goes California so goes the nation straight to hell.
  • actions vs results
    To quote an old Volkswagon commercial: It's not how fast you drive, its how well you drive fast. Such a system would be more concerned with how many times a day I exceeded the posted limit, not the fact I havent had a wreck in over 10 years.
  • pay as you go
    no way what next pay as you go garbage pu,or police and fire,im forced to pay for ever church and non profits that i never use im not for the big brother saying what and were i drive for cost.if i go threw the high crime area do i have to pay extra,what about if i dont have a phone and dont text and call while i drive do i get a break?
  • Black Box
    Big Brother is watching you...
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