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Mass. Drivers Could Pay Insurance By The Mile

BOSTON (CBS) -- Car insurance could be sold by the mile under a pilot program being considered by the state of Massachusetts. Called pay-as-you-drive, drivers could pay car insurance by the mile instead of a lump sum payment.

Commuter Beth Donovan believes low-mileage drivers end up subsidizing higher mileage ones, and this could make it more equitable.

"Those on the highways are doing more heavy driving, they pay the same as people who hardly use their cars," said Donovan.

WBZ-TV's Beth Germano reports.

It could be two to ten cents a mile depending on the type of driver, and tracking devices could be placed in cars to monitor mileage, as well as how aggressive a driver is.

A new study commissioned by the Conservation Law Foundation found that basing premiums on mileage would encourage drivers to drive less, cut down on pollution from tailpipe emissions, even reduce accidents which could be attractive for insurers.

"The analysis shows a full program could reduce driving between 5 and 10 percent, which is a pretty big chunk," said David Cash, assistant secretary for policy, Massachusetts Department of Energy and Environmental Affairs.

The state hopes it will help achieve a goal of reducing greenhouse gas emissions 25 percent below 1990 levels by the year 2020.

It sounds good in theory to commuter Brad Gordon who says driving is his bread and butter. "I have a long commute. There's no way for me to reduce my annual mileage," he said.

But Marilyn Carey, who takes the commuter rail everyday, says it would work for her. "I pay a fortune for car insurance and the car is in the driveway most of the time," she said.

The state is applying for federal funding to begin the pilot program which could last about two years. It would be optional for Massachusetts insurers.

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