The city of New York is considering the notion of pay-as-you-drive (PAYD) auto insurance as a way to reduce the pollution and congestion of the Big Apple.
The New York City department of transportation issued a request to various insurance vendors to provide information about their PAYD insurance policy options.
Rather than merely charging a flat premium, PAYD policies are based on the actual number of miles that customers drive. Officials in states that are prone to traffic congestion are taking closer looks at such policies as a means to decrease the number of traffic jams and reduce automobile emissions.
The combination of competitive pressure and evolving tracking technology has made PAYD insurance more and more popular. California, for example, set final regulations for such programs in September, 2009, and Texas also has at least one insurer offering a PAYD solution.
New York City is still in the initial phase of gathering information, and it is the data from this project that will help shape programs and policies designed to reduce traffic congestion. The city also says that, depending on the information gleaned, the next step may be to initiate fact-finding discussions about implementing pay-as-you-drive insurance in New York. Right now, however, regulatory and technical questions are at the forefront of the investigation.