Pay-As-You-Go Insurance Discounts: Get the Facts

According to the Brookings Institute, Sightline Institute, and the Environmental Defense Fund, Pay-As-You-Go insurance can have great economic and environmental effects. Here's what they have to say.

Brookings Institute:

• If all U.S. motorists had Pay-As-You-Go insurance, driving would decline by eight percent nationwide, saving about $50 to $60 billion a year in driving accidents and other car-related damage.
• If the state of California implemented a Pay-As-You-Go insurance program, it would result in an eight-percent decrease in driving from light-duty vehicles.
• California’s state government would save $54 million annually based on 2006 data and $60 million based on 2020 projections if they implemented Pay-As-You-Go insurance programs.
• Almost two out of three U.S. households would receive an average insurance discount of $270 per car if all motorists had Pay-As-You-Go insurance.
• Pay-As-You-Go insurance programs would reduce the number of accidents, the amount of congestion, and pollution (including CO₂ emissions), and would help increase oil security.
• It would take an 81-cent-per-gallon increase in the gas tax to achieve the six and a half-percent reduction in miles driven that Pay-As-You-Go insurance programs would achieve.

Sightline Institute:

• Initial research estimates that Pay-As-You-Go insurance could reduce driving by five to 15 percent. A 10 percent reduction in driving is estimated to result in a 17-percent reduction in crashes.

Environmental Defense Fund:

• The total U.S. CO₂ emissions would decrease by two percent and oil consumption by four-percent if all motorists had Pay-As-You-Go insurance.
• Nearly two-thirds of Californian households would receive an insurance discount under Pay-As-You-Go insurance with an average savings of $270 per vehicle per year.