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Driving Less Can Get You Cheaper Insurance

Californian resident? Driving fewer miles and willing to have it verified? Well, you can get cheaper auto insurances now if you’re insured with Automobile Club of Southern California and State Farm Mutual Automobile.

The California Department of Insurance recently approved the new program on December 2, 2010. (link)

Motorists who drive fewer miles and are willing to have it verified can now get a break on their auto insurance if they have policies with two California insurers.

The California Department of insurance has approved low-mileage plans offered by the Automobile Club of Southern California and State Farm Mutual Automobile.

Under the new program, motorists will have the option of  policies that base their insurance rates  upon the actual verified mileage from the previous term.

Motorist who opt for these policies and drive less than 19,0000 miles a year will have lower premiums than those who estimate their miles for the policy term based upon current loss projections.

“The voluntary pay-as-you-drive initiative is an innovative 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,” said Commissioner Steve Poizner. “The regulations I finalized last year allow insurers to offer this innovative option without compromising consumer privacy.”

The Automobile Club of Southern California’s Pay-Drive program will begin Feb.1 It will be available to 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 which will automatically record the number of miles driven in their car.

Depending on the number of miles driven, rates on these policies will be 1% to 10.5% lower than those who estimate their miles for the policy term.

On Feb. 28, State Farm customers will have an option to move into the company’s new verified mileage Drive Safe and Save plan. Under the plan, State Farm will offer an initial 5% 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.

State Farm also has created 39 new and narrower 500-mile pricing intervals for its Drive Safe and Save program which will allow those who drive fewer miles to achieve even greater savings.

Original article : http://economy.ocregister.com/2010/12/06/drive-less-get-cheaper-insurance/45270/

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Written by lordsinsurancelog

December 6, 2010 at 9:18 am

Posted in Insurance News

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