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Have Auto Insurance, but Drive Little? Company May Offer Pay-As-You-Drive Insurance

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In a move that could get people finding alternative ways to commute, state legislation (.pdf) approved last year enabled auto insurance companies in California to offer discounted rates for drivers who don't use their vehicles that much. Now, State Farm is the first company trying to take advantage it.

"It's just common sense that Californians who choose to drive less should have an option to pay less for auto insurance," said Insurance Commissioner Steve Poizner, who is also running for Governor. "The voluntary pay-as-you-drive initiative is a cutting-edge program that will allow insurers to offer these plans without compromising consumer privacy. I hope other insurers follow suit and join State Farm in offering this product."