Pricing insurance by the kilometre would provide an incentive for everyone to drive less, and it could provide an especially strong incentive for bad drivers to drive less. Per-kilometer fees could easily be designed to incorporate all existing rating factors, such as a driver's crash and moving violation history, vehicle type and geographic territory. Higher risk drivers would thus have the highest per-kilometer rates and thus the greatest incentive to reduce their driving. As unsafe drivers reduce their mileage, overall crash rates and total compensation costs would likely drop faster than ICBC revenue streams. Over the long run distance based pricing would allow ICBC to reduce insurance rates for everyone and still maintain an adequate return.
Critics tend to raise a number of concerns about distance based insurance.
For instance, there is a concern that such a change in the price structure would unfairly increase costs to business and rural drivers, who have no choice but to drive long distances. However, drivers would only pay more if they drive more than drivers within their class. At the moment those who drive less than average are subsidizing high mileage drivers. Since high income earners tend to drive more than low income individuals one could equally say that low income earners are subsidizing the rich. So let's talk about fair.