Mileage-based auto insurance in our future?

With the recent popularity of car sharing pay-as-you-go programs here in the United States some California lawmakers are thinking of applying the same idea to auto insurance. California's Department of Insurance has issued legislation that would allow the state's drivers to pay for their car insurance based on the amount of miles they drive.

The model very much resembles pre-paid cell phone programs. Insurers would offer consumers different insurance packages avoiding the need to pay a high premium on cars that are rarely - if ever - driven.

For drivers willing to take part in a mile verification system the savings would be even higher. Instead of purchasing a policy for a set number of miles the driver could pay for only the miles that they actually drive. Verification would take place at insurance locations, mechanic shops, and even by through GPS devices. Worry not, however. Even though the installed GPS could infact keep track of your mileage it would not be able to track where your vehicle is.

The legislation has yet to be put into law, but it could be in the coming months. If this proves to be a success, look for the law to spread into other states.