Credit Where Credit Is Due
Sebastian Mallaby wrote up one of my favorite ideas, namely pay-as-you-drive car insurance. But strangely he doesn’t attribute the idea to Barry Nalebuff, who devised a related and ingenious idea in his excellent book Why Not?, or Aaron Edlin, who crunched the numbers in an excellent piece that appeared in The Economist’s Voice in 2006. Harper’s floated the proposal in 2006. There is also a pretty decent Wikipedia entry on the subject.
So the proposal Mallaby describes isn’t exactly new. It’s important, definitely, and it should be encouraged. But I wish Mallaby would give credit where it’s due. The piece he cites calls upon states to enact model legislation. Oregon embraced this policy in 2005. Ted Boettner wrote an information-packed post on other PAYD efforts early last year.
Over the past few years, Texas, Oregon, Minnesota, and California have started promoting PAYD insurance as an option for consumers. The state of Oregon offers a $200 per year tax credit for each PAYD insurance policy and West Virginia could do the same. In Minnesota, Progressive Auto Insurance has been offering PAYD option to its customers.
Mallaby really ought to plug Progressive Auto Insurance, and encourage them to fight the good fight.
The bit about ethanol was weird—I thought no one ever thought it was a good idea unless they were campaigning in Iowa (not that Obama was ever immune to the pandering).
Interesting that pay as you drive seems like just the obvious way to price insurance. Aren’t insurance companies providing insurance very inefficiently as is?
— Justin · Mar 21, 03:38 AM · #
You could accomplish a similar result without the constant monitoring and recording of where drivers drive by creating a quasi-private insurer providing basic motor vehicle insurance to everyone funded by a gas tax.
— alkali · Mar 21, 09:10 PM · #