Second California Company Applies to Provide Pay-As-You-Drive Auto Insurance

California license plateThe state of California’s insurance department announced this week that the Automobile Club of Southern California had applied to them to offer a form of cheap auto insurance known as “pay-as-you-drive.” Previously, State Farm had been the only California auto insurance company to apply for the program.

In a press release from the California Department of Insurance Commissioner Steve Poizner said that “the voluntary pay-as-you-drive initiative is a cutting-edge 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. I’m pleased to see that Auto Club of Southern California plans to offer this kind of coverage to policyholders. I hope other insurers follow suit.”

The new system could mean that infrequent drivers would be eligible for very cheap car insurance indeed. Additionally, rewarding Californians for driving less could provide environmental bonuses as well, by reducing the state’s large amount of greenhouse gas emissions.

While neither State Farm nor the Auto Club of Southern California has received approval to sell such policies in California, state officials are currently considering both applications.ADNFCR-3298-ID-19870140-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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