CLF Ventures

For a free quote or to answer a policy related question
please call:

1-877-999-9EIA (342)

Questions about the Environmental Insurance Agency?

Email us at eia@clf.org

"I bicycle a lot and love that my auto insurance agency supports CLF's work to create pedestrian and bike-friendly streets."
- M. Tyson

Pay-As-You-Drive (PAYD)

EIA’s goal is to advance pay-as-you-drive (PAYD) insurance policies in New England. Most insurers charge customers on an all-you-can-drive basis, so low-mileage drivers end up subsidizing high-mileage drivers. We believe that under PAYD-based auto insurance, consumers will more clearly see the connection between their driving habits and insurance costs; this information will encourage people to limit their driving, minimizing environmental impact and making roads safer as a result. While EIA is working to make PAYD a reality, we do not sell PAYD-based insurance at this time.

News and Research on the Benefits of PAYD

A 2008 Brookings Institution study estimates that with insurance costs that vary with miles driven, drivers nationwide would reduce vehicle miles traveled by approximately 8%, which would:

Provide a net social benefit of about $50 billion from reduced congestion and accidents
Reduce carbon emissions in the U.S. by 2%
Reduce oil consumption in the U.S. by 4%

PAYD could achieve these gains while actually reducing the cost of driving for most drivers.

Almost two-thirds of households would enjoy reduced premiums under PAYD
Average savings for those households would be $270 per car per year, equal to 28% of the average annual U.S. car insurance premium

The California Department of Insurance has begun to develop rules for PAYD and has filed Senate Bill (AB 2800) aimed at overcoming various obstacles to offering PAYD in California.

The Environmental Defense Fund estimates that if 30% of Californians participate, the state will:

Slash greenhouse gases by 55 million tons during the next 11 years, the equivalent of taking 10 million cars off the road
Save 5.5 billion gallons of gas during that time
Result in a gross social benefit of $21 billion for CA based on 2020 driving projections

More information is available from the Brookings Institute website: www.brookings.edu.

Independent studies by insurance companies have led to the creation of new PAYD programs in the U.S. and abroad:

Progressive recently launched a version of PAYD called MyRate in seven states.
GMAC is offering its own version of PAYD in 34 states.
Real Insurance, an Australian-insurance company, is offering a new insurance product that allows qualified customers to prepay their insurance based on estimated travel.

Back to EIA Homepage

The transportation sector is the largest and fastest growing source of greenhouse gas emissions in the region.

PAYD insurance could reduce carbon emissions by 2 percent and oil consumption by 4 percent.

The average household savings under PAYD insurance could be as much as $270 per car per year.