Automotive News

Pay-as-You-Go car insurance is the newest trend to hit the country in a long time when it comes to vehicle coverage. Regular auto insurance means a monthly premium and a yearly policy normally but this will eliminate that for many drivers. This becomes a low cost alternative for those drivers who only operate their vehicles for short distances or just locally.

California legislature has approved a new pay-as-you-go car insurance plan that’s partly based on how many miles drivers tell their insurance company they anticipate driving each year. The program is not the first in the country, but is the first time the entire state gets a green light to proceed. However, the catch is that drivers have the burden of proving the estimated miles driven in order to get a discount.

This will allow insurance companies to concentrate more on providing coverage for actual vehicle use rather than just owning one. This will become a much cheaper alternative for drivers who tend to stay more local than long distance. This plan will be called the “Verified Miles Plan” and the actual mileage will need to be monitored in some way.

This will not only keep the short distance drivers’ rates much lower but will assist in keep the environment clean as well. The plan will allow for purchasing mileage in blocks or groups of a certain amount. This lets a driver choose the coverage for their exact needs, such as 10,000 miles, and that may last them as long as a year in some cases.

The Environment Defense Fund (EDF), which tackles the most serious environmental problems, predicts if one third of Californians participate in the pay-as-you-go-plan, over 50 million tons of greenhouse gas emissions can be avoided through 2020. This plan is optional and other more traditional car insurance options will still remain available. However, there are some controversies that come along with the new plan.

One of the main concerns regarding this is that if GPS is chosen as the preferred method of reporting mileage, do people really want the insurance companies knowing their every move? These devices will not only record the mileage used but locations and speeds as well. This information could possibly be used against a driver at a later date.

The question comes to mind about how much of yourself and your habits would you like to reveal to a third party such as your insurance provider. Long before California adopted this program, two test markets were tried. There was one in Cleveland, OH and the other in Winston Salem, NC. Both of these trials have met with some great success.

Although some critics find the tracking of your driving habits an invasion of privacy, many drivers who actually drive low mileage, will gladly give up the information to insure lower car insurance rates. Is this option for you? After compiling all the information, ask yourself if this option is right for you and your driving habits?

Compare cheap car insurance quotes today and find resources for car insurance at: www.InsuranceQuotes.info You are welcome to reprint this article – but get your own unique content version here.