Drive less to get low cost insurance


22Drivers who do not drive frequently and are willing to let the insurance companies verify this fact periodically, now have a reason to smile. Two insurance providers in the state of California are all ready to roll out the “pay as you drive” policy to the drivers in this state, starting February the following year.

The State Farm Mutual Automobile and the Auto Club of Southern California have received the go-ahead from the California Department of Insurance to issue these low mileage plans that are lighten the pocket of many policy holders.

Motorists, who would like register for this policy, will have the option of basing their insurance on the mileage verified during the previous term. All people who drive less than 19,000 miles a year and opt for these policies will save a significant amount of money as compared to those who would like to stick to the current policy being offered.

Commissioner Steve Poizner said that this “pay as you drive” program will allow motorists to choose a plan based on the actual number of miles they drive, thus costing them less premium.

The Automobile Club of Southern California will bring this policy into effect from the 1st of February, 2011. Drivers who are willing to divulge the reading on the odometer before the commencement of the policy and towards the end of the term period can opt for this program. They should also allow the car to be fitted with a tiny telematics device that can automatically transfer the reading on the odometer to the insurance provider.

Depending on the number of miles driven by the motorist, the policy premium will reduce by 1 percent to 10.5 percent as compared to motorists who opt for policies that are not based on actual mileage but vague estimates.

Customers who are registered with the State Farm Mutual Automobile insurance provider will be given the option of migrating to this new policy from the 28th of February, 2011. In order to encourage consumers to opt for this policy, State Farm is considering offering a 5 percent discounts to all consumers who opt for this policy by voluntarily divulging their odometer readings at the beginning and end of the policy term. These motorists should also give their consent to fitting their car with the OnStar tracking device that will automatically transfer the data on the odometer to the company.