In praise of California
In November, 1988, the electorate in California approved Proposition 103 to prevent the massive increases in premiums that were affecting all consumers looking for insurance. Californian drivers alone saved $62 billion on their auto insurance due to current financial situation. Then the Consumer Watchdog combined with other socially active groups to force the insurance companies to abandon the practice of basing rates on the zip code and not your record as a driver.
The current system allows drivers to report their own mileage. The industry standard is to offer discounts to drivers who do less than 10,000 miles per year. This proposed device will reward the genuine drivers and charge a fair premium to the others. It will also help to save the planet because drivers who maintain a lower average speed use less gas and so produce less emissions. For once, the auto insurance industry would be helping to fight global warming which is very public-spirited it.
This is being treated as a slightly more controversial measure. The auto insurance industry is campaigning to allow a switch to mileage and use as criteria for fixing the premiums. It estimates that this could produce further average savings in premiums of about $275 per vehicle. It would work by placing a small monitoring device in every vehicle to assess how far you drive in a year and how well you drive. But this device is viewed as an invasion into the privacy of drivers. As a compromise, the Insurance Commissioner suggests that drivers could allow the insurers to make regular checks on the odometer rather than allowing electronic collection and transmission of data.