Pennsylvania Mileage Proposal

Pennsylvania Mileage Proposal (PARVO W)
The National Organization for Women (NOW) has been backing auto insurance charged at per-mile
class rates (per-mile) as an alternative to the present system and pay-at-the-pump proposals.
Although NOW has been backing per-mile rating all overthe country?l the General Assembly of
Pennsylvania is one of the few states trying to enact the proposal.
Proponents argue that per-mile rating is simple, and can be implemented by adding one sentence to
the relevant state’s insurance code. The amendment would read as follows:
“The exposure units for calculation of private passenger automobile insurance premiums at
the appropriate classification rates shall be the car mile by audited odometer readings for
driving coverage and the car year for nondriving coverage.”
By specifying the unit of exposure, the amendment requires insurers to convert class rates from
dollars-per-year to cents-per-mile for on-the-road insurance protection. As now, car owners
would have to pay in advance to keep insurance in force. Premiums for driver coverage at centsper-
mile rates would be prepaid in mileage amounts and at time intervals as needed. The NOW
proposal would not restrict insurance companies from basing rates on driver characteristics such as
age, gender or place of vehicle registration.
Each car’s insurance ID card would display the current odometer-mile and date limits to its prepaid
protection. Policy renewals would be conditional on taking cars to company-designated gqages
for a once-a-year check of odometer readings and tamper-evident seals. Theft of insurance
protection would be controlled because odometer tampering automatically voids the policy.
Implementation of this proposal may be relatively simple, because odometer readings are already
recorded regularly as part of the emission control system inspection in many states, and odometer
tampering is already a federal crime.
For the last three legislative sessions, with the help and support of The National Organization for
Women, Pennsylvania Senator Michael M. Dawida has introduced legislation to amend the Casualty and Surety Rate Regulatory Act of 1947 relating to the regulation of automobile insursatnactee rates. If passed, the legislation would convert premium calculation for most automobile coverage
from dollars-per-year to dollars-per-mile class rates.
The latest version of the legislation (Senate Bill 1033) was introduced by Senators Dawida,
Afflerbach and Fattah, and has remained in the Committee on Banking and Insurance since April
28,1993. No version of the legislation has ever been discussed in committee.
Fairness in Automobile Insurance Rates (FHR)
For the last three legislative sessions, Colorado Senator Bob Pastore has introduced legislation that
is similar to PPN and UMA. Pastore’s plan, however, would focus only on uninsured motorists. FAIR has never come close to passing the legislature, and Pastore is trying presently to raise funds
to finance a voter ballot initiative. Much of the criticism of FAIR, coming mostly from the
insurance and petroleum industries, has focused on the plan’s feasibility.
FAIR would force drivers who do not have personal insurance into a “comprehensive automobile
insurance pool.” The measure would require uninsured drivers to pay additional premiums on
fuel, license plates, drivers’ licenses, and traffic offenses. All of these premiums would be
collected to fund the cost of providing automobile insurance for the uninsured.