State Farm applies for pay-as-you-drive coverage

May 24, 2010 11:58:50 AM PDT
California drivers may have a new way to cut their car insurance bill.

State Farm has now applied to become the first insurer in the state to sell "pay-as-you-drive" coverage. Under the plan, people get discounts for driving less.

The world's largest insurer says most policy holders would initially save about five percent by participating in the program. Insurers say the coverage allows them to better track how many miles people drive and other driving habits so policies can be better priced.

State Farm's application is in the review process.