In order for this to work for me, since I demand privacy, all car insurance must be centralized and receive all the gas insurance tax and pay out all the claims. It would be great and fair for occasional drivers. As with rented cars, insurance would only be paid when cars are being used.

Circumvention by alternative energy sources would be a problem but toll insurance tax would help, and this situation might encourage alternative energy use among mostly non-reckless drivers.

People would be more aware of the risk/cost of driving if they paid it as they "go".

Another method used in other countries is to include 'any driver 3rd party' insurance within the annual vehicle registration and to link non-payment of annual registration to a requirement to have a compulsory police safety vetting of the vehicle (paid for by the owner and making it impossible to sell the vehicle on at a reasonable price). In the country I'm thinking of, the insurance is taken by each State as a bulk policy making it exceptionally inexpensive.

I like the idea of a noninsured motorist surcharge tax on all fuels at the pump. The tax is remitted to the state to purchase insurance from the insurance companies at a bulk rate. Such a tax would not be perfectly fair but would be better than the present system where the noninsured pay nothing. A driver would still be responsible for buying their own comprehesive coverage.

Andy Tobias has a book on this very topic: Auto Insurance Alert!/Why the System Stinks, How to Fix It, and What to Do in the Meantime.

the fact is back before it was mandatory for motorists to carry insurance, it was a lot cheaper. the insurance companies came into oklahoma and told everyone that if everyone had insurance, it would be cheaper. we swallowed that line and now with big brother...aka "dept of financial responsibility" thats what it is called here, backing them up we now pay out the kazoo. no insurance no drivie. any time we give the gov authority over anything, it gets screwed up.....an elephant is a mouse made to gov specs

I believe in your scenario that a person driving a new $$$$$$ car will pay the same in taxes as someone driving a '72 Pinto, if the gas mileage and distance driven are the same.

Not quite the same insurance risk, and I believe that scenario shifts the burden disproportionally to the older car drivers (old cars, that is, not old drivers, which is a completely separate issue).

Also, this is a risk free environment. A teenager with 12 wrecks in the last year could be paying less than someone with a perfect safety record, yet tons of miles.

I suppose you could reward this with a "Saver Card" that would allow certain drivers to benefit from not paying more at the pump, but it would be difficult to monitor.

It wouldn't be too long before some insurance companies would be offering cash bonuses to good drivers in order to attract them. No accident for a year you get a 20% "refund" of the gas tax. This would balance out the cost for different types of drivers.

Who decides what insurance company gets your business? Do they get to set the level of coverage? Would the cost per gallon change for each company?

Do I get a refund for gas used in my lawn mower? Could I claim a really big lawn mower and fill my car with the cheaper gas?

I prefer the "pay at the pump" insurance tax idea. Insurance premiums could be charged at the pump, in the form of (for example) an extra 50 cents per gallon. Good drivers would share the money left in the insurance fund at the end of the year.Drivers would have to be registered with an insurance company to claim the "good driver" money, but they would only be charged a minimal fee. Claims would be processed by insurance companies in the traditional manner.

Wouldn't it be great if all auto insurance, road taxes, vehicle registration fees, etc., were paid at the pump?

Why not level the playing field for all? If you can't afford to fill 'er up, you take the bus, ride a bike, or walk. When a gallon of gasoline costs $6 or more, there will be added incentive to accelerate (pun intended) development of fuel efficient vehicles, too.