Pay-As-You-Go Car Insurance in California

As the risk of a car accident is greatly dependent on the number of miles your car has driven, a newly proposed legislation in California is giving drivers the opportunity to tie their vehicle’s mileage to their insurance costs.

The Department of Insurance in California has introduced legislation that may greatly benefits the states residents by allowing them to pay for car insurance based on the miles they have driver. Similar to prepaid mobile phones, this new auto insurance coverage would allow drivers all over the state to pay as they go. They would also get the option of choosing from different packages, to eliminate the possibility of over-paying for miles they won’t drive.

The new regulations would give auto insurance providers the chance to offer these prepaid plans alongside their traditional types of insurance coverage. They want to give customers the opportunity to pay for what they are actually using, get the most value for their money and ultimately save money. It may also encourage residents to drive less, reducing pollution emitted from their cars. This new plan could be enacted as early as Fall 2009.

The program would work through several different methods. Drivers can have their odometers read by an insurance agent, mechanic or at a smog check station. A device is also being developed that can be placed in a customer’s car to monitor how many miles they are driver, but insurance providers are prohibited from using the device to track the location of any policyholder’s car.