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Pay As You Drive

Consumers need to weigh the ecological benefits against privacy concerns about the digital trails they leave


Volatile gas prices and concerns about global warming have sparked a lot of interest in pay-as-you-drive (PAYD) automobile insurance rates. As insurance departments, state legislatures and insurance companies across the country consider the implications of introducing PAYD, journalists and pundits are ramping up their scrutiny with articles that range from considering the beneficial impact on the environment to citing concerns about Big Brother and possible fraud by drivers who enroll in such programs.

At this point, it’s hard to predict the ultimate outcome of this debate, but one thing is clear: Actuaries will play a critical role in shaping the final PAYD rating structure. In order to ensure the smooth and successful adoption of PAYD plans, we believe actuaries must be ready to proactively address a number of important issues.

Learn more about these issues, download the attachment below. Posted with the permission of Contingencies publication.

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