Skip to Content
Streetsblog New York City home
Streetsblog New York City home
Log In
Car Culture

Progressive to Offer “Pay As You Drive” Insurance

55375901_3b9db4e1a6.jpg

 

While other insurance companies belittle those who can't or don't drive, another -- Progressive -- is living up to its name by being the first major US insurer to offer a "Pay As You Drive" policy, allowing customers who drive less to pay less for coverage.

As explained in a New York Times "Freakonomics" article on the negative externalities of driving, Progressive will offer "MyRate" PAYD plans in six states.

Drivers who sign up for MyRate will install a small wireless device intheir cars that transmits to Progressive not just how many miles theydrive but also when those miles are driven and, to some extent, how theyare driven: the device measures the car’s speed every second, fromwhich Progressive can derive acceleration and braking behavior. Whichmeans that Progressive will not only be able to charge drivers for theactual miles they consume but will also better assess the true risk ofeach driver.

The Freakonomics guys believe that PAYD insurance may be the most practical and likely means to curtail driving in the US, where other methods, like congestion pricing and gasoline taxes, are politically unpopular -- even though congestion, carbon emissions and car crashes cost Americans more than $300 billion per year, according to studies cited in the article. 

Regardless of its societal benefits, as a private sector initiative PAYD is undoubtedly a risky move for the first company to try it.

But if Progressive’s PAYD insurance can induce some of itshigh-mileage customers to drive less and especially to drive moresafely, resulting in smaller claims payouts for Progressive and fewernegative externalities for everyone, then it could truly be awin-win-win situation.

Except, perhaps, for Progressive’s rivals.

Photo: ASurroca/Flickr 

Stay in touch

Sign up for our free newsletter

More from Streetsblog New York City

Monday’s Headlines: Adams’s Anti-Bike Legacy Edition

The mayor's war on cyclists pivots to video. Plus more news.

June 16, 2025

Double Whammy: NYPD Slaps Brooklyn Mom With Criminal Summons, $190 Fine

Meet Phaedra Paulson, a Brooklyn mom who is, apparently, Public Enemy #1.

June 16, 2025

Unsafe at Any Speed: NJ Officials Allow Illegal Driving Schools To Run Rampant

A cottage industry of unlicensed, unregulated driving schools targets the state’s immigrant population, evading the system carefully set up to keep road users safe.

June 16, 2025

Monday Video: Polls Are Open — Here’s a Primer

We sent Emily Lipstein and Ilan Cardenas-Silverstein into the belly of the beast to make sense of last week's debate.

June 16, 2025

BREAKING: Mayor Adams to Remove Bedford Avenue Protected Bike Lane Citing, Bizarrely, Safety

A protected bike lane that was installed last year to calm a notoriously dangerous Brooklyn corridor will be removed by the Adams administration, making the roadway less safe.

June 13, 2025
See all posts