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Car Insurance: Go Without, or Find Something Better?
Julia Levitt, 30 Jan 09

2363258975_4c1a659c4b_250.jpgPay-as-you-drive car insurance plans have been operating for several years as an alternative to standard plans that treat drivers the same regardless of how much time they spend on the road. These programs are still only available in a few states in the U.S. But it's possible that such plans may gain popularity with more drivers, now that economic hardships are forcing us to look more carefully at how we spend our money.

NPR's Jeff Brady reported recently that a new study from the U.S.-based Insurance Research Council showing that as the economy continues to worsen, Americans can expect more uninsured motorists on the roads:

IRC researchers looked back at over 20 years of data and found that unemployment and uninsured driver statistics track very closely. Since the unemployment rate is expected to increase at least through 2010, [the IRC's David] Corum predicts that the number of uninsured will rise in tandem.

For people who already drive less, the practical question of finances may be enough to spur a switch to insurance with pay-as-you-drive (PAYD) companies like MileMeter and Progressive. These models, which are also operating in the UK, Australia, South Africa and other nations around the world, offer discounted plans for car owners who drive less Similar model. Our friends at Sightline Institute have written quite a bit about PAYD plans, and they support them as a proven way to encourage alternative modes of transportation; reduce congestion, collisions and greenhouse gas emissions; and redistribute the costs of driving more fairly.

Better yet, the burden of paying insurance might now be enough to convince very infrequent drivers to give up their cars altogether in exchange for a car sharing membership. Car sharing companies like Zipcar or Chicago's locally operated I-GO carry insurance themselves and also cover gas, parking and maintenance on vehicles, so drivers only need to worry about paying for the trips they choose to take. (We hope that as these models continue to evolve, they will smooth out some of the issues that discourage users).

The major hole in this logic is that the drivers who are financially pinched enough to risk dropping their insurance aren't often the same people who can afford to live in a dense urban core. Without walkability and access to public transit, a switch to pay-per-mile insurance isn't likely to improve the financial situation for anyone who depends on a significant daily commute. Big-picture solutions for public transportation infrastructure, dense transit-oriented development and affordable housing in cities are still the ultimate answer that will enable helpful models like car sharing and PAYD insurance to achieve their full potential.

Photo credit: flickr/Burning Image, CC license.

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Comments

I think you will find that Milemeter is offering a product in Texas that will help get uninsured, insured. A Texan driver can purchase 1000 miles of liability insurance for as little as $30-35....A 1000 miles will at least get you back and forth to work or able to get out and look for a job without your car getting towed for uninsured motorist.


Posted by: George Brandon on 30 Jan 09

Wertpapieren in der Bilanz

von Raivo Pommer

Ein auch im Zusammenhang mit der Finanzkrise öffentlich vieldiskutierter Posten ist die Bewertung von Wertpapieren in der Bilanz. Sie sind generell zum Zeitwert zu bewerten, wobei diese Vorschrift im Umlaufvermögen strenger ausgelegt wird als im Anlagevermögen. Ergibt sich der Zeitwert nicht quasi automatisch aus dem Börsenkurs zum Abschlussstichtag, so muss ein Zeitwert modellhaft nachgebildet werden. Dabei bedient man sich meist der Ertragswertmethode (discounted cash flow), bei der die Annahmen zu hinterfragen sind. In diese Modelle fließen nämlich Erwartungen ein bezüglich der künftigen Erträge aus den Wertpapieren (Zinszahlungen und Tilgung durch den Schuldner), bezüglich der Zinsentwicklung und bestimmter Risiken. Vor solchen Unwägbarkeiten schützt auch die Umwidmung der Papiere aus dem Handels- in den Anlagebestand nicht wirklich. Hier sind gemäß dem "gemilderten Niederstwertprinzip" allerdings nur noch im Rahmen einer Werthaltigkeitsprüfung bei voraussichtlich dauerhafter Wertminderung Abschreibungen nötig. Aber auch hier ist zu hinterfragen, wann ein Unternehmen warum davon ausgeht, dass die von ihm gehaltenen Wertpapiere dauerhaft Wert verloren haben oder eben nicht. Weniger Beachtung als auf der Aktivseite finden die Wertpapiere auf der Passivseite der Bilanz, wo in Bankbilanzen verbriefte Verbindlichkeiten als Gegenposition zu den entsprechenden Wertpapieren der Aktivseite der Käufer stehen. Wenn deren Börsenkurs sinkt, dann nimmt ihr Wert ebenfalls ab, allerdings im Gegensatz zu den Papieren auf der Aktivseite wirkt sich hier eine Wertminderung positiv aus. Hier könnte sich jemand also reicher rechnen, als er ist. Es ist daher allgemein begrüßt worden, dass die Deutsche Bank hier konservativ verfahren ist und nicht versucht hat, ihren Jahresverlust zu schönen.


Posted by: raivo pommer on 10 Feb 09

Thank you for the great information on this site. I for one truly believe that pay as you drive is the future of car insurance. Today’s consumers expect to be treated individually, and this surely applies to car insurance. Some companies are taking it a bit further with the use of telematics. As an example, MiWay in South Africa has a product that uses telematics to rate the driver on not only how far they drive but also how they drive. Use the link to view more about their MiDriveStyle Car Insurance.


Posted by: Rory on 1 Oct 10

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