California revises PAYD regulations

Taking into account comments from consumer groups on the draft revision, Commissioner Poizner has issued revised regulations that will continue to protect the privacy of California drivers whilst paving the way for insurance companies to offer innovative PAYD and 'price per mile 'insurance.

Commissioner Poizner originally proposed the PAYD regulations last summer to make a new, more mileage-accurate auto insurance option available for California consumers. The regulations were last revised in June 2009.

The PAYD program enables insurers to offer a verified mileage program instead of or in addition to a traditional estimated mileage program.

The revised regulations allow insurers to offer discounts to drivers who opt for a mileage verification policy. Mileage may be verified through odometer readings taken by the insurer or its agents or vendors, auto repair dealers, smog check stations, self-reporting by the policyholder or a technological device placed in the insured's vehicle.

The amended regulations explicitly prohibit insurers from gathering location data from consumers for automobile rating purposes through the addition of a technological device. However, the regulations would not affect existing multipurpose devices such as GM's Onstar system, or the use of a technological device as part of an emergency roadside assistance program.

According to California law, new or revised regulations only become effective once certain procedures, including public involvement and comment, have been followed. s will take effect as soon as possible.

The regulations are anticipated to take effect in fall 2009, after which insurers will be able to apply to offer PAYD insurance in California.

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