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State Farm Files California Pay-As-You Drive Request

Posted on 24 May 2010

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The largest U.S. car insurer, State Farm Mutual Automobile Insurance Co., is the first to apply to the California regulator to offer pay-as-you-drive coverage in which motorists get discounts for traveling less.

The application from the Bloomington, Illinois-based insurer is under review, California Insurance Commissioner Steve Poizner said on Friday in an e-mailed statement.

Insurers say that pay-as-you drive, in which companies track additional data about driving habits, allows them to better price policies and may encourage customers to make fewer trips, reducing gasoline usage. California, the largest U.S. state, may join the U.K. and the Netherlands in permitting the pricing. Poizner said the plan won’t violate customer privacy.

“It’s just common sense that Californians who choose to drive less should have an option to pay less,” Poizner said in the statement. " I hope other insurers follow suit.”