Auto Insurance By The Mile?

November 20th, 2009 by Lloyd Pro Group Inc.

Consumer Watchdog website tells us that each and every day the State of California is inching closer to allow insurance agencies to sell insurance by the mile to consumers. Can you imagine if this becomes a new trend? That would mean that drivers who drive more would pay more for insurance. Conversely, drivers that drive less will be rewarded with lower insurance premiums.

Notice what this article goes on to say about how this program works:

“The Sacramento Bee reports that Insurance
Commissioner Steve Poizner has released regulations that will permit
and authorize insurance companies to verify mileage as part of
insurance plans based on miles driven.

The ultimate goal of the new insurance plan in California isn’t to save
drivers money, but to encourage people to drive less. Less driving will
reduce the pollution in California, the number of accidents and ease
traffic congestion according to lawmakers. California isn’t the only
state with insurance plans based on miles driven. Texas has such plans
provided by a company called MileMeter that offers six month policies
with chunks of mileage ranging from 1,000 miles to 6,000 miles.

Conventional mileage based policies would reportedly take an estimate
of projected mileage for a year and then refund or bill the driver
depending on the actual miles driven. Mileage could be verified in
several ways such as at smog check stations, DMV records, and via
electronic devices attached to the car.

Two thirds of homes in the country would save about $270 per year per
car with mileage based plans according to a study from Brookings.
However, Carmen Balber from Consumer Watchdog says that the new
policies cater to the insurance industry and don’t require the premiums
to reduce when driving does.”

It makes sense that California the “green state” would be spearheading a break through idea for drivers to save on car insurance. They want people to drive less and save the environment.

It’s interesting how this idea works. It reminds us of the way the mobile cell phone industry has operated until  now. Just as you have the ability to choose the phone plan that has the right amount of “minutes”  that you require, the new auto insurance program would operate similarly. In turn, just as you will pay extra if you go over your “available minutes” each month, you would pay for any additional miles you drive above and beyond your mileage plan.

What do you think about this idea? Do you think it would work here in Atlanta? Do you think that drivers would welcome this new way of saving money on their Atlanta car insurance?

Lloyd Pro Group and Nationwide has been helping drivers save money on their Atlanta insurance for the last 20 years. If there is anything we can do to help you please contact us at (770) 381-5000

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Auto Insurance By The Mile?
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