As Pennsylvania State Insurance Commissioner and National Climate Change Task Force Chair Joel Ario backs up this idea of having auto insurance that cuts back carbon emissions or more commonly known as pay-as-you-drive policy and believes that it should be imposed in other states, regulators argue if there is really a need to impose private companies to offer such a policy.

State regulators who shy away from this idea argue that this concept is already expanding in a very quick pace with local motorists easily embracing it and there is no need for it to be mandated. Alternatively, a number of environmental advocates insist that the only way for this emission-controlling policy to be successful, a standardized approach must be done –requiring the industry to offer such a policy.

A study conducted by a Brookings Institution last year showed that if every motorist in the US owns a miles-based auto policy, car travel in the US will be lowered by as much as 8%.  Having such a significant decrease in road traffic will result to a 2% reduction in carbon emissions and can have each household save as much approximately $270 each year per vehicle.

A big local group that strongly supports the development of this policy as an insurance standard released a statement saying that requiring Pay-As-You-Drive policies in the market can lead to optimizing environmental and social benefits for thousands of insurance customers.  National Climate Change Task Force vice chair and Washington Insurance regulator Mike Kreidler said that if a national campaign will be made, drivers will be ones to demand for the availability of this policy which will certainly allow them to save money.

On the other hand, no matter how many supporters the concept gains, Pennsylvania regulator Ario says that having Pay-As-You-Drive policies required as an industry standard will not be happening anytime soon. According to the United Nations Intergovernmental Panel on Climate Change and Insurance Expert Evan Mills, standardization of an insurance policy should come from within the private sector, from service providers in the industry themselves, and not from insurance commissioners and regulators. Mills added that ulterior motives of companies and technology issues can get in the way of planned standardization.

Ario said in a recent interview that the real challenge does not involve mandating providers to sell climate-friendly, emission-cutting policies. The real challenge is in making companies move out of their way and be innovative. Especially that history has it that regulators have, in more ways than one, made it a problem for insurance providers to shift and adapt to changing times.

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