Recent developments in California signal changes in the insurance landscape of the State. California Insurance Commissioner, Steve Poizner, recently released policies that in effect permit monitoring and verification of miles used for pay-as-you-drive insurance plans.
The system of pay-as-you drive insurance plans is similar to pre-paid mobile phones, where policyholders pay premium based on the number of miles travelled, as in the case of phone subscribers, they only pay for minutes consumed. In effect, the lesser one drives, the lesser he pays; the more one drives the more premium he pays. This type of plan is very democratic and highly practical.
Environmental groups hope that pay-as-you drive insurance plans would encourage people to be more responsible with their driving habits, ultimately creating a scenario where drivers would choose to walk or take public transport rather than pay for high premium fees.
MileMeter, a company operating out of Texas, is the first company to step forward and offer pay-as-you-drive plans that are initially valid for six months. This is the first time that a company would be branching out of their Texas headquarters.
This company is targeting specific segments of the market, in particular, motorists who are paying high premiums or people who are enrolled on affordable, but bare and inadequate insurance plans.
Pay-as-you-drive plans are not new to this state, as some coverage plans are partly based on amount of miles driven; however, insurance companies are prohibited from verifying the mileage of policyholders. This makes the system prone and open to abuse as well as tampering.
Studies conducted by research institutions revealed that if all drivers nationwide would be enrolled on plans based on miles, there would be a significant drop in gas consumption and driving hours. Furthermore, research also found that drivers on these types of plans can stand to benefit savings of up to $270 per car.
However, not all Californians are in favour of this recent measure. Some people find regulation to be intrusive and these individuals do not savour the idea of having someone track their movements.
Other respondents see the regulatory policy as an attempt of the state to control citizens. They added that State government clearly wants to dictate the behaviour of Californians by implementing measures designed to compel citizens to limit or curtail movements and activities, which to them is an indirect infringement to one’s freedom.
More enthusiastic groups lauded the move and expressed relief that the regulation would now recognize people who drive their cars less in the form of lower premiums, while those who drive around a lot would have to shell out more for premiums.
The system of pay-as-you drive insurance plans is similar to pre-paid mobile phones, where policyholders pay premium based on the number of miles travelled, as in the case of phone subscribers, they only pay for minutes consumed. In effect, the lesser one drives, the lesser he pays; the more one drives the more premium he pays. This type of plan is very democratic and highly practical.
Environmental groups hope that pay-as-you drive insurance plans would encourage people to be more responsible with their driving habits, ultimately creating a scenario where drivers would choose to walk or take public transport rather than pay for high premium fees.
MileMeter, a company operating out of Texas, is the first company to step forward and offer pay-as-you-drive plans that are initially valid for six months. This is the first time that a company would be branching out of their Texas headquarters.
This company is targeting specific segments of the market, in particular, motorists who are paying high premiums or people who are enrolled on affordable, but bare and inadequate insurance plans.
Pay-as-you-drive plans are not new to this state, as some coverage plans are partly based on amount of miles driven; however, insurance companies are prohibited from verifying the mileage of policyholders. This makes the system prone and open to abuse as well as tampering.
Studies conducted by research institutions revealed that if all drivers nationwide would be enrolled on plans based on miles, there would be a significant drop in gas consumption and driving hours. Furthermore, research also found that drivers on these types of plans can stand to benefit savings of up to $270 per car.
However, not all Californians are in favour of this recent measure. Some people find regulation to be intrusive and these individuals do not savour the idea of having someone track their movements.
Other respondents see the regulatory policy as an attempt of the state to control citizens. They added that State government clearly wants to dictate the behaviour of Californians by implementing measures designed to compel citizens to limit or curtail movements and activities, which to them is an indirect infringement to one’s freedom.
More enthusiastic groups lauded the move and expressed relief that the regulation would now recognize people who drive their cars less in the form of lower premiums, while those who drive around a lot would have to shell out more for premiums.
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I think this insurance plan is a great option for those people who drives very less and are not willing to buy a policy that offers protection round the year. I will recommend this option to all my friends because they didn't have made any so far.
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