A new system of car insurance whereby drivers only pay for the miles they cover is due to be launched in the state of California in the US from February next year. For drivers who are able to walk to work, work from home, or don’t use their car that often, the new pay as you go car insurance scheme will be especially beneficial as some drivers could potentially reduce their insurance premiums by up to 45%. The California Insurance Commissioner Steve Poizner who announced the new scheme described it as an “innovative product” and revealed that two insurance companies will be offering this new insurance system in the state from February 2011. Instead of there being two categories for measuring mileage, with the new car insurance scheme there will be 39 categories which are divided by 500 mile sections. This means that policyholders will receive a more accurate rate of cover in proportion to the amount of time they spend behind the wheel. As well as offering car owners the opportunity to reduce the cost of their cover, it is hoped the new scheme could encourage people to use their cars less, which would have a knock on effect in reducing emissions, traffic congestion, and pollution.