Estimated read time: 1-2 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
A growing number of insurance companies are offering "pay-by-the-mile" insurance rates for those looking to cut back on transportation costs. Basically, the less an individual drives, the less their insurance costs.
Some companies are using the "honor system" by having the customer keep track of the miles they drive in a year. Others are using the On Star system already installed in several vehicle models to log the miles.
Many clients are cutting back on their driving due to the prices at the pump. Many are carpooling more often or taking public transportation, so these drivers are enjoying the savings of the new insurance plan.
It varies depending on exactly which mileage, but I've seen savings averaging 15-20 percent sometimes with my clients.
–-Walt Waggener, an insurance agent for State Farm.
"It varies depending on exactly which mileage, but I've seen savings averaging 15-20 percent sometimes with my clients," said Walt Waggener, an insurance agent for State Farm.
With so many drivers responding to the high savings plan, State Farm and Allstate -- two of the three largest insurance companies in the nation -- are offering the new insurance plan as part of their policies.
State Farm is offering those who drive 19,000 miles or less a year a specific insurance rate. That rate decreases for every 500 miles they drive under that limit.
After the dark clouds of record-high gas prices, this news might just be the silver lining for many drivers.
