Source: Marc Lifsher, LA Times ( Free Registration )

An alliance of insurance companies and environmentalists wants to bring a new kind of mileage-based auto insurance to California and charge motorists only for the number of miles actually driven. Called pay as you drive, the option is available from a few insurers in 34 states as well as Canada, Japan and Europe.

One company, GMAC Insurance Group, says its customers—whose mileage is tracked by General Motors Corp.’s OnStar system—have reduced the premiums they pay by 13% to 54%. And California drivers could expect to get similar savings if pay as you drive is approved here.

The system could cut motoring costs, protect the environment and reduce traffic congestion, boosters say. Opponents, mainly privacy advocates, say they fear that insurance companies could begin tracking more than just a driver’s mileage. High-mileage drivers could also see higher rates.

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