Pay as you go insurance—coverage that reflects driving habits and usage, much like how a cell phone plan works—is starting gain popularity on this side of the pond (it has been around in the UK for a while). Progressive now has a pay as you drive plan, called MyRate, that has drivers installing a gizmo on their car that tracks their mileage and driving behavior. Information is collected every six months and used to recalculate the driver’s premium.

Environmentalists love the idea (because it will likely spur a reduction in miles driven). California’s insurance commissioner is on record supporting the trend. And insurers like pay as you go because it means they can more accurately assess a driver’s claims risk.

It remains to be seen whether regular consumers will be willing to part with quite a bit of privacy in order to enjoy a lower premium. (With gas prices so high, my hunch is that they’ll take the savings.) Although, according to a survey on this site, the reaction seems pretty mixed.

But what about you, Joe Agent? What do you think of this trend? Will lower premiums necessarily result in smaller commissions? Leave any impressions in the comments below.