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California implements pay as you go auto insurance regulations

Posted On Fri, September 4, 2009

Some auto insurance customers in California can expect a new option in the coming months that will help them save money on their premiums.

State Insurance Commissioner Steve Poizner announced recently that his office had issued final regulations for pay as you drive regulations, which had initially been proposed last fall.

Under such a system, motorists pay for their insurance premiums based on how many miles they drive. Those who drive the least end up paying the least.

"Pay as you drive is an innovative way to create financial incentives for California motorists to drive less, leading to lower-cost auto insurance, less air pollution and a reduced dependence on foreign oil," said Poizner.

Consumers who do choose to purchase a pay as you go premium will have their mileage verified through various methods that include odometer readings taken by insurance representatives or repair shops, or with GPS or other technological devices.

Overall, the system could result in more savings for auto insurance customers while also giving them an incentive to use other options like carpooling and public transportation to save more money.

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