Texas Gives Green Light to Cents-Per-Mile Auto Insurance

by Michele Keller, Web Editor

NOW activists celebrated a victory recently with the passage of a new Texas state law that encourages insurance companies to let car owners buy auto insurance based on mileage.

Unfortunately, the new law doesn't require insurance companies to offer cents-per-mile insurance. It also allows companies to restrict availability of the cents-per-mile choice to selected customers. However, if insurance companies cooperate with the new rules, car owners in Texas — where car insurance is mandatory — can choose between paying their premium at the usual fixed annual rate or the new cents-per-mile rate.

Paying based on mileage could save many women drivers — who on average pay about twice what men pay (per mile driven) — an average of $200 per year.

Texas NOW President Deborah Bell is urging Texans to demand that their insurance companies make cents-per-mile insurance available to all of their policyholders.

"We need the per-mile alternative to dollars-per-year prices that force millions of cars to go uninsured," Bell said.

Dr. Patrick Butler, who has worked for cents-per-mile insurance for close to 20 years as director of NOW's Insurance Project, testified on the proposed rules to implement the cents-per-mile choice law at a hearing before the Texas Insurance Commissioner in January.

Before joining the staff of the NOW Action Center in 1981 to work on ERA ratification, Butler was active in chapter projects in Houston, where he was a research geochemist and the Curator of Lunar Samples for the National Aeronautics and Space Administration.

The car insurance industry has for years overcharged the drivers who drive the fewest miles each year — especially women, older people, and people in low-income groups. Women drive less than men on average, but pay about twice as much per mile as men for identical coverage.

NOW President Kim Gandy said that the cents-per-mile choice law could enable people to control their spending for auto insurance in the same way they can now economize on gasoline and this would be a welcome choice for many drivers, particularly women.

"Car insurance companies have for decades been making profits at the expense of lower and moderate-mileage drivers, many of whom are women, and many of whom are lower-income. It's time to stop this discrimination," Gandy said. "We challenge car insurance companies in Texas to offer cents-per-mile insurance, and if they refuse, we demand that they explain why."