Washington Considers Pay-As-You-Drive Insurance

February 6, 2009

Washington is the lastest state that is considering implementing pay-as-you-drive legislation, in which drivers would pay insurance premiums based in part on the miles driven per year.

Senate Bill 5708, sponsored by Sen. Tracey Eide, D-Federal Way, provides that any insurance policy that grants the coverage required for a motor vehicle liability policy may also grant lawful coverage based on mileage-based factors. A mileage- based motor vehicle liability policy must be approved by the insurance commissioner.

The bill text notes that “recent increases in gasoline prices have inflated the costs of transportation, requiring Washington families to spend more of their income on transportation and further stretching families’ limited budgets.” Another reason for the proposal is the desire to reduce greenhouse gases and emissions in the Pacific Northwest “at the lowest cost to Washington’s economy.” If passed, the bill would create an incentive for drivers to drive less and save money on gas, while working toward the environmental goal.

However, a concern with the bill, as with PAYD proposals in other states, is how mileage would be tracked, and whether that violates individuals’ privacy rights. California and Texas are among the states that recently have evaluated PAYD regulations.

Progressive Insurance already offers a PAYD option to drivers in nine states.

For more information, visit http://apps.leg.wa.gov/documents/billdocs/2009-10/Pdf/Bills/Senate%20Bills/5708.pdf.

Source: Washington Legislature

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