17.3 Pay-As-You-Drive (PAYD) Insurance Program

Mitigate congestion through reduction of auto trips and VMT.

Description

A mileage-based vehicle insurance program permits drivers to pay their automobile insurance premiums on a variable scale, dependent upon how much they drive each vehicle. Since the cost of coverage is directly tied to use of the vehicles, PAYD insurance provides incentive to drive less.

Application

Individuals or companies with fleet can participate in this program.

$$\text{Daily Emission Reduction (grams/day)} = A + B$$

$$A = \mathit{Nv}\times (\mathit{TL}_{B} - \mathit{TL}_{A}) \times \mathit{EF}_{B}$$

Reduction in auto running exhaust emissions from trip reductions

$$B = (\mathit{VT}_{B} - \mathit{VT}_{A}) \times \mathit{TEF}_{\mathit{AUTO}}$$

Reduction in auto start exhaust emissions from reduction in vehicle trips

$$\mathit{VT}_{A} = N_{V} \times N_{\mathit{TA}}$$

$$\mathit{VT}_{B} = N_{V} \times N_{\mathit{TB}}$$

Number of auto trips before and after strategy implementation

Variables	(Unit)	Definitions
$\mathit{EF}_{B}$	(grams/mile)	Speed-based running exhaust emission factor (NOX, VOC, PM, or CO)
$N_{V}$		Number of vehicles participating in the program
$N_{\mathit{TB}}$		Average number of auto trips per day before participating in the program
$N_{\mathit{TA}}$		Average number of auto trips per day after participating in the program
$\mathit{TEF}_{\mathit{AUTO}}$	(grams/trip)	Auto trip-end emission factor (NOX, VOC, PM, or CO)
$\mathit{TL}_{A}$	(mile)	Average daily travel after participating in the program
$\mathit{TL}_{B}$	(mile)	Average daily travel before participating in the program
$\mathit{VT}_{A}$	(trip)	Number of daily vehicle trips after implementation
$\mathit{VT}_{B}$	(trip)	Number of daily vehicle trips before implementation

Source: Texas A&M Transportation Institute

Resource: Pay-As-You-Drive Automobile Insurance Pilot Program,

https://mobility.tamu.edu/mip/strategies-pdfs/travel-options/technical-summary/pay-as-you-drive-insurance-4-pg.pdf