State Farm Debuts Mileage-Based Auto Insurance in Texas
Filed under: Car Insurance News
Mileage-based insurance is the auto insurance industry’s latest innovation, and it is one which actually does save the customer money in the majority of cases. Progressive and a few other insurers have been experimenting with the concept for several years with large degrees of success, and most recently State Farm, a venerable auto insurance giant, has entered the fray by debuting its Drive Safe & Save program in Texas. Texas has one of the highest rates of uninsured drivers in the country, so it can be hoped that this new program will have a positive effect on that statistic.
In order to qualify for the Drive Safe & Save (DSS) program, Texas drivers have to have an active account with OnStar, a vehicle diagnostics and service program offered by Chevrolet but that is available to those who drive other vehicle brands as well. OnStar is a system which allows for constant monitoring of the vehicle in terms of performance and location.
OnStar customers can call for help in the event of an accident or breakdown, can report their car stolen in the event of theft, and many other useful options. OnStar logs physical location through GPS readings, and can relay information such as odometer readings and gas tank levels to remote monitoring stations; OnStar clients receive pre-emptive warnings when deviating from charted itineraries or when their gas tank gets too low. This kind of precise and constant monitoring is attractive and useful to auto insurers, especially when used in regards to an at-use auto insurance program.
Whereas Progressive auto insurance has invested in its own proprietary and patented on-board monitoring system, State Farm is capitalizing on a system already in place and widely-used by partnering with OnStar. The new DSS program is not mandatory. State Farm is the largest auto insurer in Texas, and it has a large marketing presence there, as one of its regional offices is located in Austin, Texas.
DSS discounts will be based on actual vehicle odometer readings after a 100-day evaluation period. Annual mileage driven will be the basis for actual discounts, which will range anywhere between 1 to 30% off standard premium prices.
It does need to be said that per-mileage insurance in states such as Texas, where it is normal to drive longer distances to commute, might not actually benefit many drivers.
“We are thrilled to be the largest auto insurance company in Texas to offer this innovative program and believe our customers will respond positively,” remarked Mike Hargis, who is the State Farm Agency Vice President. “Drive Safe & Save will help us better match price to risk. The fewer the miles driven, the greater the savings.”
First-time DSS enrollees will get a 3% discount on their normal auto insurance premium, and the final discount will be calculated after at least 100 days of consistent odometer readings. The discount scale will depend on how many miles the customer drives per year. For instance, someone who drives 11,000 miles in a given year will get a 7% discount, while those who drive more than 16,000 miles per year will get the minimum discount of 1%. Discounts are re-calculated with each renewal of the policy, and must have the 100 days of consecutive readings to qualify.
This content was created by http://BestCheapAutoInsurance.com
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Posted on April 11th, 2011 by Elizabeth Martin
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