New York City Ponders Benefits of Pay As You Drive Insurance

New York City is considering whether pay-as-you-drive auto insurance could reduce congestion and pollution in the Big Apple.

The city’s department of transportation has issued a request for expressions of interest inviting vendors to submit information about pay-as-you-drive insurance policy options.

Pay as you drive insurance policies charge customers for each mile they drive. Officials in congestion-prone states are increasingly looking at the policies as a means of lessening traffic jams and reducing car emissions.

Evolving technology and competitive pressure has made pay as you drive insurance an increasingly popular topic. California, the largest U.S. state, set final regulations for pay as you drive programs in Sept. 2009.

New York City says the information gleaned from the preliminary steps will help shape policies and programs aimed at reducing traffic congestion. The move is preliminary, however, and the city also says that —depending on the information learned — may follow up the request with fact-finding discussions of using PAYDI in New York.

At this stage, technical and regulatory questions are among the biggest for the transportation department, it said.