Proposed regulations would allow California drivers to pay auto insurance based on their mileage, creating an incentive for motorists to drive less.

There are pay-as-you-go cell phones and all-you-can-eat buffets, and somewhere in between slots a new auto insurance concept under consideration in California.

The proposed regulations would allow insurance companies to offer coverage plans paid for by the mile, in addition to traditional plans. The idea is to allow consumers to pay for what they use — and potentially save money. It could also encourage motorists to drive less, reducing emissions. The plan could go into effect as early as November.

Under the proposed plan, consumers would be able to report their miles themselves, have their insurance agent check the odometer or visit a repair shop or smog-check station to get a reading. A device could also be put into cars to record mileage readings, though it wouldn’t be used to track driver movements.

California insurance commissioner Steve Poizner proposed the new guidelines last summer and announced a revised framework in June that would allow consumers to prepay for a specific number of miles. This would let drivers buy a block of miles at a specific price for a certain time period, with the option of buying more if needed. The revised rules also would allow for discounts for using the new insurance. Continue Reading…