In the long ago summer of 2008 there was a bill before the wizards in California’s State Legislature that if passed would have allowed insurance companies to charge customers who agreed to install a “technological device” in their car to have their insurance premiums calculated by the miles they drove. It was being pushed by liberal Democrat Assemblyman Jared Huffman.
Simply put, if you installed a device you paid less if you chose not to you would pay more.
What is interesting is that it was also supported by Republican Insurance Commissioner and candidate for Governor in 2010, Steve Poizner. In July 2008, the Contra Costa Times said about this effort, “There is a new concept for automobile insurance being driven through our state legislature with Insurance Commissioner Steve Poizner at the wheel”.
The bill eventually died.
So what happens in Sacramento when legislation fails and you have all the regulatory power of the Insurance Commissioner? Go around the legislative process where issues like this should be resolved and create regulations that do the same thing without any vote of the people’s elected representatives. And that is exactly what Commissioner Poizner did.
Over the last year and out of the media spotlight, the Department of Insurance has been drafting regulations and taking public comment on this issue and on August 3, 2009, Poizner announced that the regulations would take effect sometime this fall. In his press release announcing this he said…
“Pay as You Drive is a cutting-edge program that will create financial incentives for California motorists to drive less, leading to lower-cost auto insurance, less air pollution and a reduced dependence on foreign oil”.
Sounds great doesn’t it? Save money on car insurance and save the planet all at the same time. Who wrote this press release, Al Gore?
To be fair, unlike the Huffman bill the Poizner Regulations would be voluntary and you could either have a device placed in your car or have your odometer read by a designated vendor like an auto repair dealer or smog check station.
The release goes on to say…
“The revised regulations also allow insurers to offer discounts to drivers who opt to purchase a mileage verification policy”.
So according to Commissioner Poizner this program is an “option” or “voluntary” whichever word you choose.
Is this going to be like Obama’s “public option” on healthcare? The conservative argument against the “public option” is that it will eventually force out private insurance and lead to a government-run healthcare system.
In the case of car insurance in California could this “voluntary” or “optional” idea lead to a point sometime in the future where the current way folks buy car insurance is eventually supplanted by this new “pay as you drive” scheme?
And if we get to that point who will this most effect and who will pay the higher premiums?
If you live in a city or an area with good public transportation or carpools, you can leave the car at home and save money. But what if you live in a rural area where public transportation is virtually non-existent and carpooling is impractical?
Rural folks including farmers and ranchers must drive a great deal and it’s mighty tough hauling your harvest to market on public transportation.
What about small business owners like a florist or dry cleaner with delivery trucks? And let’s not forget the working poor who must drive longer distances to their jobs.
Besides who will pay in this scheme, what about the data that the Insurance companies will retrieve from the “big brother black box” tucked neatly beneath your dashboard?
The Progressive Insurance Company in other states that have a similar program collects additional data on things like, “how aggressively you drive” as well as mileage.
According to the very liberal group Consumer Watchdog, the original Huffman bill that Poizner supported said nothing about the collection of additional data.
Commissioner Poizner assures us that they will only be allowed to collect data on your miles driven.
But he can only speak for his tenure at the Department of Insurance. What if under a different Commissioner the insurance companies like Progressive, push to have the regulations changed to say that they can collect additional data like, where you drive, how fast you drive, are you driving at times when accidents are more prevalent or the aforementioned how aggressively you drive? After all it is not a law passed by the Legislature; it is a set of regulations handed down from the Commissioner.
And who’s to say they don’t create a new system of car insurance using the data they have collected to charge more because using that additional data they determine you are a greater risk?
Finally, there is the unspoken part of where this all might lead.
Is this the camel’s nose under the tent to eventually tax motorists by the mile? Because if that ever became law we would all have to install a GPS locator in our vehicles so the government would know how much to tax us for the privilege of driving on the roads we already pay for through the gas tax.
And you can bet your bottom dollar that the insurance companies would be right behind this idea so they could share in the data retrieved from your car.
Steve Poizner claims to be a conservative but a real conservative would never endorse such a plan because of the uncertain path it sets California on that will lead to more government in our lives not less.
The message of the town halls of this August was loud and clear and it was about more than healthcare. That was the match that lit the powder keg of voter anger against big government.
What it really was about was the ordinary folks who work hard and play by the rules saying to their government, we don’t trust you.
And this scheme by Commissioner Poizner asks the voters to trust the government.
Here is some cowboy advice for Commissioner Poizner. “Convincing yourself that a bad idea is a good one, is a bad idea”.