The Overhead Wire Daily | June 11th, 2024 | Car Insurance

June 11, 2024

The (de)congestion pricing saga continues as MTA Chair and CEO Janno Lieber has held a press conference and seemingly pushed back on Governor Hochul’s last minute rug pull by saying the agency isn’t giving up on (de)congestion pricing.

On the other side of the Atlantic Ocean in Wales, the country’s leading car insurance company has said that claims have dropped 20% since the implementation of a 20mph speed limit on local roads across the country. The head of underwriting at esure said this time period usually sees an increase in claims.

This points at something I’ve been trying to look more into but haven’t seen a lot of information about. Our home and car insurance increases are because both of these items are getting more expensive to replace, but for cars, our urban form and transportation funding system forces us to move further away from destinations making us drive more. More driving on top of heavier vehicles and faster speeds means more risk of collisions for drivers and insurance companies overall.

One of the interesting things Wes Marshall talks about in his book Killed by a Traffic Engineer is this idea of exposure. Instead of per capita collisions in city boundaries to be able to compare the relative safety of places, people like Paul Hoffman of Studebaker created a number where the denominator was incredibly large (collisions per mile driven) so that collisions and traffic deaths seemed like they were going down, when in fact they were going up.

Insurance companies have tried to counter the exposure a bit by giving low mileage discounts or even some going with per mile insurance. But that makes me wonder that if insurance companies are starting to think more heavily about climate change and the impacts on their bottom line, they might do well to start considering many more factors that create more exposure for them whether that’s sprawl or vehicle weights.

It could be just about miles driven, but as Prof David Hensher at the University of Sydney said in a show with us recently (audio | transcript), there’s an opening for the insurance industry to be a main driver of MAAS or as David calls his idea Mobility as a Feature such that they are focused on reducing risk and exposure. There’s a benefit to the insurance companies trying to lower exposure by promoting active transportation instead of driving as the only transportation mode. It might actually improve mobility, reduce emissions, and make them more money overall.

We’ll be releasing our chat with Wes Marshall on Thursday.  But something to think about as this discussion hopefully continues.


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