For Portlander Erin Brewer, who solely uses her car to pick up groceries and visit her family down in Eugene, paying monthly, flat-rate insurance costs seems, at times, unnecessary.
"Portland's transit is so accessible and affordable, my car is just a backup," Brewer said.
But that could be changing, as companies in the Portland region begin looking at pay-as-you-drive insurance as a way to help consumers – and the environment.
Climate Futures series
As Metro's planning staff looks at ways to address a state mandate to reduce tailpipe emissions in the Portland region, Metro News is digging into some of the 144 ideas under study. Our goal is to paint a picture of what the Portland region could look like if any of those scenarios are adopted.
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This insurance option allows drivers to pay for insurance based on how much, and when, they drive.
"It can both reduce insurance rates and result in reduced greenhouse gas emission rates," said Marie Dodds, director of public affairs at AAA of Oregon and Idaho. "It's a great option."
But, Dodds added, the insurance model is still in its infancy. Only three of the hundred-plus insurance companies in Oregon offer some form of the pay-as-you-drive model, and until very recently, marketing has been sparse. So what will it take to make this greenhouse gas-targeting insurance go mainstream?
Familiarity, said Ron Fredrickson, a manager at the Insurance Division of the Oregon Department of Consumer and Business Services.
"People and companies are looking for a reliable, cemented method for offering this insurance. Right now, companies are trying out different options, but there is no finalized way to verify mileage," Fredrickson said.
One of the leading companies experimenting with the pay-as-you-drive model, Progressive, requires drivers to install a device in their car to track mileage. Fredrickson said these kind of devices need to be fine-tuned so drivers cannot tamper with them, if they are even comfortable with attaching the device to their car in the first place.
According to recent Portland pay-as-you-drive startup MetroMile, customer trust is the most important facet in securing this model's future.
"We try to create the most clear and transparent system possible. It's not based on a secret algorithm, it's simple and straightforward," said MetroMile CEO Steve Pretre. "We want drivers to be in control of their plan, even if it is a new idea."
Additionally, Pretre said, encouraging drivers to drive less is key in making the model succeed in slashing greenhouse gas emissions. MetroMile's rates for drivers that drive an average amount of miles each month are comparable to regular insurance companies.
But if you drive fewer than 8,000 miles a year? Pretre said you'll be saving a lot more than with the mainstream companies.
"Once drivers see how much they can save with shorter trips, they will be much more motivated to use public transport, bike or walk," Pretre said.
According to studies from Metro's planning department, implementing pay-as-you-drive insurance could effectively reduce greenhouse gases in the region by up to 3 percent by 2050, that is, of course, if the majority of drivers use it.
The state of Oregon is offering incentives to insurance companies to offer pay-as-you-drive insurance, but, Fredrickson said, he hasn't heard of any applying yet.
Aside from time to fine-tune a universal model, director of the Oregon Environmental Council, Chris Hagerbaumer, said that it may also take a shift in the views of major insurance companies to make this model go mainstream.
"I think that companies are conservative in the business sense, so they are less likely to innovate,' Hagerbaumer said."Their business is risk aversion, so they themselves have an aversion to risk."
While she sees the commitment to this form of insurance an important focus for the Portland region, she remains uncertain if Metro has the leverage to make a regional shift. Hagerbaumer said she sees real change taking place at the legislative level. In 2003, the Oregon Environmental Council worked for that tax credit – the one that no companies are using yet.
"We started the conversation," Hagerbaumer said. "Now it's really up to them to make the change."