Insurance sold with petrol

This proposal comes from Paul Blankinship in Vallejo, California:

'By buying a gallon of gasoline, a driver is buying a unit insurance for the time that the gasoline is in the car'

40% of California's drivers are uninsured. The core of my proposal is to bundle costs for gasoline and insurance. By buying a gallon of gasoline, a driver is buying a unit insurance for the period of time that the gasoline is in the car. Gasoline stations would display both the brand of gasoline and the brand of insurance company. Prices for both would be displayed. (The retailer would select which insurance company to ally his station with.)

The consumer benefits by having a fixed cost of insurance that is directly related to their driving. If you normally take alternative forms of transportation but use a car for occasional trips, you have a much lower insurance cost.

The consumer benefits too by having greater competition for his insurance money. Insurance costs per gallon would be clearly posted, allowing much easier comparison shopping. There would also be a reduction in the inherent racial bias of insurance costs. Often lower income areas have a higher insurance cost which shifts the highest burden onto those who can least afford it. This plan would make for truer risk sharing.

The consumer is guaranteed protection in the event of an accident. If a car has gasoline, it is insured. Of course, this implies that the insurance system works under a no-fault rule. Regardless of fault, you are fully covered.

'The incentive for drivers to get into more fuel-efficient cars would increase dramatically'

The increase in gasoline costs would be beneficial. Because higher gas mileage would equal higher insurance mileage, the incentive for drivers to get into more fuel-efficient cars would increase dramatically. An increase in alternative forms of transportation and in mass transit could be expected.

A simple way to manage the system might be to issue a computer-coded driver's licence which would be needed to refuel. In addition to establishing who the most recent insurance carrier is, the driver could be ordered to surrender his card if serious driving violations occur. This would make it more difficult for more dangerous drivers to get on the road, reducing risk, and possibly insurance cost.

This idea is flexible. The basic concept can be stretched to add new taxes (for example taxes for mass transit or health care). And driver's licences could be coded to reflect certain risk factors (such as age or driving record).

All the main parties involved can gain by this idea:

Gasoline retailers would be induced to participate because they would have a second profitable enterprise - insurance. Depending on the cost of insurance-per-mile retailers could perhaps make an additional profit of 50-100%.

Insurance companies would be attracted to the idea because currently uninsured drivers would be paying insurance. (Such companies would also continue to supply additional comprehensive cover.)

There would be secondary savings to the government from not having to pay for property and health care costs incurred by uninsured motorists.

Paul Blankinship, 1661 Gateway Drive, Vallejo, California 94589, USA (tel 707 645 7445).

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