The Land Use Thing
(Note: due to access expiry of the online article referred to here, the link destination had to be changed)
An online article on PAYD was brought to my attention. The city of Vancouver, Canada, wants the Insurance Company of British Columbia (ICBC) to offer insurance on a per-kilometre basis. The city council has unanimously carried a motion to that effect. If I understand correctly, some Canadian states have divided the motor insurance business into a public (liability) and private (all other risks) part. I assume British Columbia is one of those states, and that ICBC is the public liability insurer. The idea is to base the scheme on odometer readings.
I browsed some of the (very many) reactions that appear as links under the article. They vary from ' I think it' s a great idea' to 'Awful, what will they think of next'. Many are fun to read, and they reminded me of some issues concerning public acceptance of TDM measures.
One argument that was repeatedly used particularly struck me. It is about land use.
As property prices in the big city centres skyrocket, people who have (low- to mid-income) jobs in those cities are forced to move to houses they can pay, further off the centre. They can do this, because the transport by car gets them to work. So financial pressure made them commuters with lots of miles driven per year.
Then, when a per-kilometre charge is introduced, your insurance fee goes up, leaving you feeling charged for your poverty by your government. This I can understand.
Nevertheless, there are ways to circumvent or mitigate this problem. There is the possibility of distinguishing between urban and rural per-mile rates. Based on damage claim counts, this would most probably be entirely justified actuarially. When using odometer readings, rates would have to be based on zip-codes of insureds.
Still, these rate-distinctions are unlikely to compensate rural high-mileage drivers fully. That would also be undesirable from an environmental point of view. So (odometer-based) PAYD acceptance by this part of the public is likely to be lower than with others.
A thing to be reckoned with when planning (governmental or insurance company) policy...