California Revises Pay-As-You-Drive Regulations

Posted & filed under Car Insurance News.

A version of the regulations for Pay-As-You-Drive (PAYD) has been drafted by the California Department of Insurance. The decision to do so has stemmed from many consumer inquiries and comments regarding benefits and privacy. Officials at the department carefully considered all input and revised the regulations to ensure that the privacy of California drivers would be protected and that they would be getting the most for their money.

When the Commissioner of the department, Steve Poizner, first drafted PAYD, he originally set out to create a more accurate way to calculate insurance premiums. The regulations were revised shortly after, when the department decided to give insurance providers the chance to give discounts to any customers who choose to use the PAYD program.

Because the PAYD allows auto insurance providers with information about a driver’s whereabouts and mileage, many possible consumers were worried about tracking. These new regulations also state that insurers cannot gather data about a driver’s location or any other information that infringes on their privacy.

This new program has been a long time in the making, and was designed to encourage drivers to decrease fuel consumption and pollution by driving less. It also gives insurance providers a new way to calculate insurance costs for their customers without estimating mileage. With Pay-As-You-Drive, companies will be basing their prices on exact mileage, so customers are not paying any more or any less than they should be. In addition, companies will still be able to provide customers with traditional auto insurance. All companies must be approved by the California Department of Insurance before being able to offer PAYD.

The California Department of Insurance has recently revised the regulations for their new Pay-As-You-Drive insurance programs, reassuring insurance consumers that their privacy will be valued when collecting mileage information.