A new study finds that pay-as-you-drive insurance, in which drivers’ insurance rates are based on their actual mileage tracked by the insurer, could reduce driving and accidents.
The study, commissioned by the Conservation Law Foundation and Environmental Insurance Agency, estimated that switching all Massachusetts drivers to a per-mile auto insurance pricing would reduce mileage, accident costs and fuel consumption by about 9.5 percent. An alternative model with a flat yearly rate for insurance plus per-mile pricing after the first 2,000 miles would reduce these measures by about 5 percent.
State Farm and the Auto Club of Southern California both launched pay-as-you-drive insurance policies in California in February, and Progressive Insurance, which already offers such a plan in 31 states, plans to add it in eight more states in June.
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