Pay as you drive insurance Options

[Andy1]

.....Nothing new but at some point in the future could it/ should it be the standard for car insurance and would it be like a green insentive ?

Would it encourage people to drive less and walk, run or cycle more ?

It would be easy to enforce, I'm sure people would try to abuse it but in view there seems to be more pro's than con's. Discuss if you want

[Iommi]

Like with all things, it hits the less well off. With these 'discrete taxes' I think there should be a balance. Insurance is already assessed on expected mileage anyway.

[On the edge]

I suppose if the insurance industry saw that as a commercially viable market - they'd develop just such a product. I suspect the risks are assessed against an annual premium and facts disclosure. However, these days it wouldn't be beyond the wit of man to develop a 'Motor Insurance' holding certificate - which you activate only when its needed on a 'time or mileage' basis. Why not put something together and suggest it to one of the smaller firms?

Seems to me that the key point would be the need to have some demonstrable certification' that the driver was insured - for the period in question. However, DVLC have overcome that far more easily than even they anticipated, by linking all the insurer databases. An example of good government IT project!

[Andy1]

Insurance is already assessed on expected mileage anyway.
[/quote]

Expected yes but this will be exact, m2m.

You'll pay more for driving between 60 - 70 mph and beyond

[JeffG]

So how would pay as you drive insurance work?

[On the edge]

So how would pay as you drive insurance work?

Here's one solution - not fully baked I admit - but could work.
1. The 'Insured' would sign up with an insurance company and furnish them with their risk
detail (vis - age, convictions, previous form, etc.) together with the vehicles they intended to drive. The insured would then be given a 'basic insurance certificate - which would only be valid when trips were registered.
2. This would need to be paid for to set up (like TfL Boris Bikes) so a once off / annual registration fee payable.
3. The detail would be recorded on the insurance company database as 'inactive'
4. When the insured wanted to drive - they would simply register the time period OR the trip detail on the insurers 'on line' service - similar to TfL Conjestion Charge. They would pay by credit/debit card at the time, or have it deducted from a registered card. Again, just like the TfL conjestion charge system - a coded receipt can be produced 'on line'
5. The insurance company database would then be 'activated' to show the vehicle was insured for the period booked by the insured.
6. The Police could check this in the normal manner - via the on line hand held device they use at the moment.

There, no real difference to 'pay up front' insofar as proof of evidence is required - almost makes me think this would be a runner!

NOTE Yes, degrees of sophistication can be added. of course. On board technology sending trip detail could easily be installed. Already in use in most larger commercial fleets already. The above is simply a quick cheap as chips start up.

[GMR]

.....Nothing new but at some point in the future could it/ should it be the standard for car insurance and would it be like a green insentive ?

Would it encourage people to drive less and walk, run or cycle more ?

It would be easy to enforce, I'm sure people would try to abuse it but in view there seems to be more pro's than con's. Discuss if you want

I don't think it would change car driving habits. But it would be beneficial for those that don't use their car that often.

[Andy1]

Here's one solution - not fully baked I admit - but could work.
1. The 'Insured' would sign up with an insurance company and furnish them with their risk
detail (vis - age, convictions, previous form, etc.) together with the vehicles they intended to drive. The insured would then be given a 'basic insurance certificate - which would only be valid when trips were registered.
2. This would need to be paid for to set up (like TfL Boris Bikes) so a once off / annual registration fee payable.
3. The detail would be recorded on the insurance company database as 'inactive'
4. When the insured wanted to drive - they would simply register the time period OR the trip detail on the insurers 'on line' service - similar to TfL Conjestion Charge. They would pay by credit/debit card at the time, or have it deducted from a registered card. Again, just like the TfL conjestion charge system - a coded receipt can be produced 'on line'
5. The insurance company database would then be 'activated' to show the vehicle was insured for the period booked by the insured.
6. The Police could check this in the normal manner - via the on line hand held device they use at the moment.

There, no real difference to 'pay up front' insofar as proof of evidence is required - almost makes me think this would be a runner!

NOTE Yes, degrees of sophistication can be added. of course. On board technology sending trip detail could easily be installed. Already in use in most larger commercial fleets already. The above is simply a quick cheap as chips start up.

In Europe now most if not all new cars car connect to the mobile network in case of emergency. This appears to be the standard coming our way and no doubt payd will follow shortly after.

[On the edge]

In Europe now most if not all new cars car connect to the mobile network in case of emergency. This appears to be the standard coming our way and no doubt payd will follow shortly after.

No bad thing really. I know a fair few fleet owners now get regular reports on how the vehicle is driven, where it is and indeed speeds etc. All helping safetywise. Who knows one day we'll even be without the curse of the uninsured driver.

[pinkfluffyclouds]

I drive on average 7k per year so I would be in favour of this but on the other hand my husband drives about 30k so not good for him - therefore I pay more - he pays less it evens it out !!

[Darren]

You'll pay more for driving between 60 - 70 mph and beyond

Why? Motorways and Trunk Roads are statistically far safer than A, B or local roads.

[Iommi]

I drive on average 7k per year so I would be in favour of this but on the other hand my husband drives about 30k so not good for him - therefore I pay more - he pays less it evens it out !!

OK where there are two people to 'dissipate' the cost.

Why? Motorways and Trunk Roads are statistically far safer than A, B or local roads.

The idea is to cut and reduce uneconomic car usage, by the looks of it. Morally speaking, I like the idea where cheaper options are made available in conjunction with taxes, rather than just taxing; which looks cynical.

[On the edge]

I don't think the original suggestion combined tax and insurance. The two things could be brought together and offered as a proposition as well as lump sum payments. Suspect that would be easier for the insurance companies to do first. HMG has a serious problem with payment methods - seem always to want up front lump sums.

[JeffG]

I don't think the original suggestion combined tax and insurance.

I thought it was your own suggestion in post #6?

[Andy1]

Why? Motorways and Trunk Roads are statistically far safer than A, B or local roads.

Sorry that's what the white paper said

[Darren]

Well I tend not believe what White Papers say.

The "Beyond" is an interesting addition. Planning to recommend an increase in the National Speed Limit?

[DrPepper]

The easiest way to insure as you drive is for the car insurance business to be taken into government control and then the cost of insurance added to the price of fuel. This way no one can ever drive without insurance, and you only pay when driving. If you wish to insure your car against theft/fully comp then you could buy a separate policy (from a private company) if you so wish.

[Iommi]

What ever is proposed, it looks like I'll pay more. Eventually.

[JeffG]

Sorry that's what the white paper said

Oh it was suggested in a white paper now, was it? I really must brush up on my mind-reading skills.

[On the edge]

Oh it was suggested in a white paper now, was it? I really must brush up on my mind-reading skills.

Must admit, I thought this referred to insurance only - but don't think it matters over much. Solution would work even if tax and insurance were combined. That would probably make sense anyway. After all when we buy anything with VAT its just the same - cost of the product plus tax.

In future its even more likely with electric vehicles. The cost of a third party insurance, plus tax could easily be added to the 'energy charge' price. Boris bikes, plus insurance on a bigger scale!

Putting all the mandatory charges (insurance and tax) together with the fuel cost does have the massive advantage of making it very difficult to avoid payment. That might well reduce costs; particularly as the incidence of avoidance is high under the present regimes.