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Pay-as-You Drive: Coming to an Auto Insurance Company near You?

Drivers in California should check with their auto insurance company to be aware of all their options now that the state has cleared the way for pay as you drive policies to be sold.

According to Insurance Commissioner Steve Poizner, drivers will soon have the ability to purchase these policies now that his office has established a final set of regulations for them. Under the policies, consumers pay a fixed amount of money to cover their vehicles based on the number of miles they drive.

"I am pleased with the final regulations I have submitted today, after months of working with consumer groups and other valuable parties. I look forward to approving the first pay-as-you-drive program for California drivers," said Poizner.

The plans are especially likely to benefit people who carpool, telecommute or take public transportation to work, or if they are retired and do not drive much.

Companies will be allowed several ways to verify whether their customers are staying within mileage guidelines. Some may choose to use GPS systems and other technology for verification, or they will also be able to have the mileage checked at repair shops or by insurance company representatives.

Overall, with California often among the states that set trends for the rest of the nation, pay as you go could be coming before long to more than one auto insurance company in other states.

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