Pay as you drive could shrink driving cost

SACRAMENTO, July 15 (UPI) -- Paying auto insurance only for miles driven could reduce insurance costs and traffic on U.S. highways, proponents of a rarely used billing system said.

Insurance companies and environmentalists are backing a bill in California that would allow insurers to track motorists' mileage and pro-rate their insurance bills according to how many miles they've driven, the Los Angeles Times reported Tuesday.

In states that allow the practice, motorists are saving from 13 percent to 54 percent on their premiums, the report said.

"This is a tool to reward drivers who actually drive less," said California State Assemblyman Jared Huffman.

On a national level, the Brookings Institute in Washington said pay as you drive could cut $52 billion a year from the nation's collective driving costs, as less driving means fewer accidents and reduced pollution and gas consumption.

But, some fear the global positioning system currently used to track mileage is also an invasion of privacy, allowing insurance companies to know the whereabouts of a car and how fast it is driving.

Others fear the system favors urban dwellers at the expense of those in the country, who need to drive longer distances for basic necessities.