Following the latest insurance trend sweeping the nation, Sequoia Insurance Co., one of the largest insurers in California, will begin offering a pay-as-you-drive auto insurance policy. Sequoia joins State Farm and Progressive in offering this particular policy, increasing the options available to California drivers.
Progressive was the first to incorporate this concept into their coverage options after finding that fewer people were taking to the road in light of rising gas prices and other costs.
Drivers interested in the coverage must first have a small device installed in their vehicles. This device tracks mileage and, to a moderate extent, driving habits. The data is then compiled and analyzed to calculate the actual cost of the policy. Given the nature of the plan, prices can fluctuate wildly, but the average cost is lower than more conventional types of auto insurance.
State Insurance Commissioner, Dave Jones, has long been the advocate of so called “green” initiatives. Jones believes that the pay-as-you-drive plan is both environmentally and consumer-friendly protection. “People who choose to drive less will pay less for insurance and, at the same time, reduce greenhouse gas emissions,” says Jones.
While Californian motorists may be becoming more environmentally conscious, the plan may be more popular with the fiscally conscious crowd. Gas prices are rising steadily and are expected to reach new highs as Summer approaches. This coupled with the soaring cost of other auto insurance plans is forcing many to stay out of their vehicles. This new plan may prove to be an affordable option to those that would otherwise be unable to obtain coverage.
