Final regulations given for pay as you drive policy in California


CULTRF-00002869-001The insurance commissioner of California, Steve Poizner, gave out the final regulations of ‘pay as you drive’, which is aimed at the insurers to provide consumers with good rates which are based on the number of miles you drive and not an estimated number.

Poizner says that this idea is a wise way of creating incentives for the motorists of California by asking them to drive less so that they could pay a low cost for auto insurance. This could also reduce pollution in the air and also reduces use of foreign oils.

This policy was proposed in 2008 by Poizner’s insurance department. It was last altered in 2009. the alterations can be seen in the regulations given now.

Discounts are given to drivers by the insurers provided the drivers decide to purchase a verification policy for mileage. Before being effective in the market, any auto insurance program must be accepted by Mr. Poizner.

When a driver chooses to buy this policy, the number of miles driven would be verified in many methods. After he clears the regulations he would be given the policy.

The changes made after the initial proposal are:

  1. The language which motivates insurers to give the pay as you drive option to drivers.
  2. The allowance given to insurers to sell the policies of mileage verifications along with estimation policies or just the former.
  3. The language that needs an insurer who would offer the plan to specify exactly the mileage verification to the department.
  4. Making all verifications of mileage equal to all drivers and applicants.
  5. Prohibition to use location data but no prohibition will be made against motor clubs or insurers that provide devices to drivers in case of an emergency.

It was estimated by the environmental defense fund that if about 30% of Californian s decided to buy the policy, 55 million tons of carbon dioxide emissions could be avoided equivalent to almost 9 million cars off the road.5.5 billion gallons of gas could be saved and Californians could save up to $40 billion which is usually spent on cars or car related operations.

This can be a way to bring back the over heated weather to normal in the next few years.

Depending on when the regulations are approved by the office of administrative law, its effect would be made. The regulation policies are targeted to hit the market by October 2009.