California Receives First Application to Provide Pay-As-You-Drive Auto Insurance

Hand on car steering wheelCalifornia may soon become only the second state in the U.S. to offer pay-as-you-drive auto insurance.

Texas is currently the only state that allows this type of coverage. This could be California residents’ answer to obtaining the cheapest car insurance available.

Last week, State Farm submitted an application to California in order to offer this program that rewards drivers with cheaper auto insurance rates if they drive less, California Insurance Commissioner Steve Poizner said. Instead of people’s rates being dependent upon estimated mileage, they will be based on the actual amount driven.

Commissioner Poizner said that “it’s just common sense that Californians who choose to drive less should have an option to pay less for auto insurance. The voluntary pay-as-you-drive initiative is a cutting-edge program that will allow insurers to offer these plans without compromising consumer privacy.” Poizner established regulation for this program in October 2009.

California also offers a good drivers auto insurance discount. Drivers in financial need are eligible to receive low-cost automobile liability insurance for $368 or less per year. ADNFCR-3298-ID-19802830-ADNFCR

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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