For some of the drivers like Nancy Bell the pay-as-you-drive plans seem to be working well ever since she has retired from her services. A resident of Oakland, California, Nancy Bell has opted for this new auto insurance policy which rewards the low-mileage drivers.
When you sign up for the pay-as-you-drive plan that is offered by State Farm in place of an estimated miles policy, there will a considerable fall in the premiums you pay. So, the lesser you drive below 19,000 miles per year, the more you save.
Bell aged 63 states that this was a good way to save money while taking advantage of the additional discounts that can be availed for driving less. Bell who lived in a Boston suburb moved to Oakland after retirement. She feels that this plan has an added advantage and offers an additional incentive, especially with the gas prices being so high. Bell had purchased the policy in the month of February.
The premiums are partly tied to the actual number of miles that are driven unlike the estimated number of miles in the policy. So, any savings that arise as a result of driving less will be applicable to the next 6-month premium period.
State Farm’s programs are offered in Illinois, California, Ohio, and Texas. The pay-as-you-drive plans were offered by Auto Club of Southern California, earlier this year. There is a usage-based insurance plan that is offered by Progressive in many states. The other insurance majors like AAA Northern California as well as Allstate Insurance are not planning to have these offers in California this year, as they want to wait and watch to see if the concept works before venturing into it.
The State Farm’s pay-as-you-drive plan is called Drive Safe& Save, where motorists can report their mileage either online or at any agent’s office prior to renewal of the policy. The drivers with Saab and Saturn as well as General Motors have their vehicles equipped with the OnStar technology where their mileage gets automatically updated to State Farm. Any customer who meets the OnStar criteria can opt to self-report the mileage.
Bell has also opted for the self-reporting option but as her older-model Saturn does not have the OnStar, she has already made certain changes with respect to her driving habits.
Bell is now seriously working on combining her trips and cutting down on the ones whenever possible. She hopes to minimize the number of miles driven as well.
