California Moves Closer to Pay-as-You-Drive Insurance

Cars
California Insurance Commissioner Steve Poizner authorized regulations that allow insurance companies to use mileage verification for pay-as-you-drive policies. Studies have shown that per-mile pricing lures drivers to alter their habits, which then reduces air pollution, congestion and traffic accidents.

These plans can take several forms. In Texas, MileMeter offers six-month policies of 1,000-6,000 miles that drivers refill when their miles run out. The company wants to move into California where it believes motorists are paying too much for insurance.

Other plans being considered by State Farm, Allstate and Progressive might offer a yearlong policy based on a projected mileage. At the end of the year, the insurer would either refund or bill the driver based on how much he or she went over or under the estimate.

The key is verification. Privacy advocates don’t like the idea of installing electronic devices into vehicles to track miles driven, but there are other options. Odometer readings by agents, DMV records or states with smog-check stations could all provide the verification.

Could this lead to a push by insurers to access other information such as when your vehicle is driven or at what speed in order to inflate rates? That’s a less appealing proposition.

Then again, a study by the Brookings Institute confirmed the environmental and economic benefits of by-the-mile insurance pricing. If all of the country’s drivers adopted this type of policy, driving would drop 8% nationwide and oil consumption would fall by 4%. Two-thirds of U.S. households would save an average of $270 per car.

Pay-by-the-Mile Auto Insurance Advances in California (Sacramento Bee)

By Stephen Markley | November 10, 2009 | Comments (7)

Comments 

H

Ha! You can get Alfa Romeo's and Citroen's and Opel's in California apparently!

smokin88lx

You want to go some place paying too much for insurance try Massachusetts. My car insurance went up $70 a year moving from a quiet town in central MA with 6000 people to Van Nuys CA, a less desirable area of Los Angeles. Can't imagine what my insurance would have been if I lived in an urban area of MA.

d

this is similar 2 Germany & their reading your elec meter once a year & then estimating what u will use 4 the next year..use 2 little & get a refund...use 2 much & get hit with a huge bill like i did..880 euro one year! Ouch....

freethinker

Those who rent cars will have lower mileage on their own.

Peterson

Hi
I think it’s not required to go to physical places to get your vehicles insured anymore. It can be done online, just visit: www.online-autoinsurance.net.

Erik

Insurance is outragous. Its pretty unfair they FORCE you to have it, and then make it nearly un affordable. I have to pay 100 bucks a month for Insurance on my little junker car for liabilty only, while my friend, just cause shes a girl, and shes younger, pays 58 bucks for full coverage on her neon. Thats just absurd.

The car insurance introduces good schemes where you can also save money on insurance. ‘Pay as you drive car insurance’ is one such policy where you need to pay only when you drive and this is really will be a right choice for those who drive very often. At first the in-car tracker or GPS system should be installed in your car which records the details like the distance traveled by your car and then sends it to insurance company where it gives you the details of the premium you have to pay. http://carinsurancetemporary.co.uk/

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