Insurance Commissioner Jones Announces Approval of CSE Insurance Group Filing to Offer Pay-Drive Program
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced his approval of a personal auto filing by CSE Safeguard Insurance Company (CSE) that will allow its policyholders to voluntarily participate in a unique "SAVE" pay-drive verified mileage auto program. The program offers refunds for reduced driving at the end of policy terms, not just for mileage adjustments for future terms that other pay-drive programs currently offer. CSE expects to have the program in operation by January 2012.
"As more insurers offer this type of program, California will benefit from a healthier environment and consumers will benefit from a wider selection of choices when shopping for auto insurance," said Commissioner Jones. "This environmentally-conscious program unites economic savings with emissions reduction in an effort to reduce traffic congestion and greenhouse gases. I encourage more insurance companies to start offering pay-drive options to their policyholders."
"The new SAVE Program structure is quite simple," said Pierre Bize, President and CEO of CSE. "This is a true pay by the mile program where our customers pay for the miles they drive. Not only are drivers reporting their actual mileage, they are reimbursed for the difference between their estimated and actual annual mileage."
"Pay-Drive Insurance is a simple yet innovative way to incentivize and reward those who drive less by saving them money while they reduce their environmental footprint," said Justin Horner, Transportation Analyst with the Natural Resources Defense Counsel. "We are encouraged to see more products that tie insurance premiums to the actual miles people drive. These kinds of solutions can help the environment and save Californians money."
"In an economy like this, Californians will appreciate the opportunity to save money for every mile less they drive," said Doug Heller, Executive Director of Consumer Watchdog. "More auto insurers should offer policies that closely tie premiums to the number of miles we drive each year."
CSE's program includes a rating factor for each mile driven between 5,000 and 12,000 miles per year, so that a driver pays for the exact number of miles they drive each year. This is different from any other auto insurer, including those that are now offering pay-drive programs, that still use a "mileage band" (for example 7,500 - 10,000 miles per year) to calculate the rate (premium). As an incentive, policyholders who choose this verified mileage option will pay an initial lower premium. Under CSE's SAVE Program, policyholders can self-report their mileages on-line or use a free telematics device.
The voluntary Pay-Drive program was proposed by the California Department of Insurance in 2008 and the regulations were approved by the Office of Administrative Law in 2009. The program enables insurers to offer a new option for consumers who choose to take advantage of it. While companies continue to offer traditional insurance based on estimated mileage, they now can also offer a verified mileage program instead of, or in addition to, a traditional estimated mileage program.
Last year, two California insurance companies were the first to offer this type of pay-drive program. The Automobile Club of Southern California and State Farm began offering such programs in the fall of 2010. Earlier this year, Sequoia Insurance Company of Marin instituted its program.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $288 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.