Can Insurance Pricing Help The Environment?


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Car insurance is priced in a manner that allows you to drive as much as you want without regard to your premium. You pay a set price, get in your car, and drive to your heart’s content. Some environmental groups and think-tank wizards believe that encourages excessive driving and is environmentally irresponsible.

Analysts at the Natural Resources Defense Council and the Brookings Institute believe that if Americans had to pay for insurance on a per mile basis, it would reduce their total miles driven by 8%. They say that a system like that would help the environment in several ways:

  • Decrease carbon emissions by 2%
  • Decrease oil consumption by 4%
  • Save $50-$60 billion in reduced ”driving-related harms”
  • Eliminate millions of tons of CO2 from the environment.

That would be nice from an environmental standing, but those analysts do not offer any real world solutions for people to afford that system and continue to get to work nor the impact on the rest of the economy when people stop buying other things to cover their increased insurance premiums. Think that one over guys.

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