Excerpt: "I am thrilled to pave the way for California drivers to obtain insurance that is more environmentally friendly and more accurately reflects driving habits," Poizner said at a Sacramento news conference. "As a strong advocate of healthy market competition and a healthy environment, I am especially pleased to encourage this kind of innovation and additional options for consumers."
Source: Los Angeles Times http://www.latimes.com/business/la-fi-insure28-2008aug28,1,5163500.story
SACRAMENTO -- "Pay-as-you-drive" auto insurance -- with premiums tied to the exact number of miles driven each year -- may be just around the corner for California motorists, state Insurance Commissioner Steve Poizner said today.
The commissioner released proposed state regulations that would give motorists the option of using the new rates as soon as next year, and several major insurers said they are interested in offering such plans.
Such policies, available on a limited basis in more than 30 other states, have two purposes: They would give insurance companies a more accurate way to set premiums, and they would offer motorists a financial incentive to drive less.
Currently, rates are based partially on drivers' often erroneous estimates of how much they drive as well as their safety records and number of years behind the wheel.
Under Poizner's proposed regulations, drivers could report their annual mileage in three ways: They could have their vehicle odometer checked by an insurance company representative; they could submit vehicle maintenance records; or they could have an electronic device installed in their cars that would transmit information to insurers.
The proposal is supported by the insurance industry, environmentalists and consumer groups. Environmentalists consider pay-as-you-drive policies an important tool for helping California curb emissions of the greenhouse gases that contribute to global warming.
"I am thrilled to pave the way for California drivers to obtain insurance that is more environmentally friendly and more accurately reflects driving habits," Poizner said at a Sacramento news conference. "As a strong advocate of healthy market competition and a healthy environment, I am especially pleased to encourage this kind of innovation and additional options for consumers."
The Environmental Defense Fund, which backs Poizner's proposed regulations as well as a similar effort in the Legislature, estimates that California drivers would save $40 billion in car-related expenses between 2009 and 2020 if about one-third of them switch to pay-as-you-drive policies.
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