Pay-as-You-Drive Insurance Approved in California - NBC Southern California

Pay-as-You-Drive Insurance Approved in California

State Farm starts verified mileage plan program in February.

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    NEWSLETTERS

    A newly approved pay-as-you-drive state initiative allows California motorists to pay for car insurance based on how much they drive, insurance officials announced Thursday.

    "The voluntary pay-as-you-drive initiative is an innovative program that will allow insurers to offer plans based on more accurate mileage, so that people who choose to drive less will pay less for auto insurance," said Insurance Commissioner Steve Poizner.

    Filings by the Automobile Club of Southern California and State Farm Mutual Automobile Insurance to offer the coverage were approved by the state Department of Insurance, and Poizner said he hoped other companies will follow suit.

    Starting in February, State Farm customers can choose the new verified mileage plan, labeled the "Drive Safe and Save" program.

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    Under the plan, State Farm will offer an initial 5 percent discount for the first policy term to insured drivers who agree to self-report their odometer readings at the beginning and end of each policy period or who agree to allow the company to access their mileage data automatically when the insured's vehicle has a monitoring system, according to the company.

    Also in February, the Auto Club's "Pay-Drive" program will be made available to insured drivers who agree to report their odometer readings at the beginning and end of each policy period or who agree to attach in a small monitoring device to their vehicle.

    Depending on usage, those who verify how many miles they drive will pay 1 percent to 10.5 percent less for insurance than those in the same "mileage band" who estimate their mileage, Poizner said.