Commissioner Poizner of California’s Department of Insurance has proposed revised regulations that will give insurance companies the ability to offer consumers coverage plans that are paid for by the mile.

Similar to individuals who purchase prepaid minutes for their cellular phones, the consumer will be able to pre-pay for a certain number of miles for a specified amount of time.

Under the revised regulations insurers will also be able to offer discounts for those that opt to purchase a mileage verification policy. This allows Californians to pay for miles that are actually driven instead of an estimated number which is currently one of the major factors which determine rates.

There are several methods that can be used to verify mileage including odometer readings by an insurer’s agent or broker, automobile repair centres, smog check stations, self-reporting by the insured.

There is also a device which can be placed in the customer’s vehicle to monitor miles driven; however, regulations prohibit insurers from using these devices to obtain the location of a driver.