As long as they don’t make this mandatory, it sounds like a good idea for those who don’t drive that often. Why pay as much as those of us who practically live in their car? But for someone like me this makes no sense. I have to drive a lot, I have no other choice, I have kids.

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 — but not California — 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.

(via)