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Californians can now opt for mileage-based auto insurance

Posted On Tue, October 20, 2009

New laws affecting auto insurance took effect recently in California, which may have some consumers finding some savings.

Recently, the California Department of Insurance announced that pay-as-you-drive insurance is now available in the state after final regulations were approved by the Office of Administrative Law. The regulations allow auto insurance companies in the state to base the cost of policies on the actual amount a person driver rather than an estimate.

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

Through the program, insurers would have a number of options when validating the mileage of consumers who opt for the pay-as-you-drive auto insurance. For example, insurers can take a reading of the policy holder's mileage, or can have the consumer do it themselves. They can also install a device which will take a reading.

The Insurance Information Institute notes that consumers may be able to save money on their auto insurance by getting a low-mileage policy. If the consumer drives less than the average motorist, their insurer may provide a discount on auto insurance policies. Insurers may also give discounts for people who use public transportation.
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