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Drive Less, Pay Less: New Insurance Plans for California
Skip this regularly, save on insurance (Photo by Mark Luethi via the LAist Featured Photos pool on Flickr)
Drivers who telecommute or who keep their mileage to a minimum can soon opt to sign up for insurance plans that offer savings for driving less. California Insurance Commissioner Steve Poizner announced yesterday that two insurance providers, State Farm and the Automobile Club of Southern California, will implement new pay-as-you-drive insurance plans effective February 2011.
Using verified mileage, the new plans will better allow insurance providers to offer premiums based on more accurate risk; the less distance you cover behind the wheel, the less of a risk you have for being involved in an accident.
Poizner's office released details about each of the plans:
Beginning on February 28, 2011, State Farm customers will have an option to move into the new verified mileage plan, which State Farm has labeled its Drive Safe and Save program. 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 State Farm to access their mileage data automatically when the insured's vehicle has an active On Star system.
They have created a series of 500 mile intervals for narrower pricing plans, and for those participating in the program, "consumers who reduce their driving habits by as little as 500 miles per year will see a reduction in their rates."Via the Automobile Club, a similar plan will be available as of February 1, 2011. The new plan "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 plug in a small 'telematics' device into their automobile which will automatically record the number of miles driven." Customers participating in the verified mileage plans will pay rates "from 1 percent to 10.5 percent lower than those insureds in the same 'mileage band' who simply estimate their miles for the policy term."