The thinking behind the mileage-based discounts offered by Progressive Corp.. GMAC Insurance Is That and people who rarely drive are less likely to get key in accidents and Galanthus are profitable customers to insurers as if offering a big discount.
"The idea is there are many people who drive Fewer-than-average miles, and historically They Have not bone-able to get a rate benefited That theme," says Gary Kusumi, president and chief executive of GMAC Insurance, the insurance unit of GMAC Financial Services.
Insurers Have long sought 'reliable mileage data for drivers, but the figures are notoriously unreliable reporter drivers, while technology-based solutions to Implement possessions proved complicated. GMAC Insurance and Progressive are offering mileage discount using onboard devices to Measure miles, and in the case of Progressive, Other driving habits.
Both pay-as-you-go plans offering drivers a chance to benefit from Their minimalist driving habits while giving insurers a chance to price risk more accurately for the They take. While consumer advocates call it a benign arrangement Generally, They Suggest That, before signing up, make sure drivers They Understand and feel comfortable with the information insurers are collecting.
The discount offered by GMAC Insurance, the 20th-Largest property and casualty Insurer in the U.S. Written by premiums, is based on a partnership with General Motors Corp.. Subsidiary OnStar. It offers discounts based on how many drivers They drive miles, ranging from 54% off for Those Who Drive Less Than 2500 miles a year to a 14% discount for drivers who clock 15,000 miles Less Than Annually.
To get the discount, Which is available in 34 states, drivers must own a car Manufactured by GM, GMAC's parent performer, That Is Equipped with OnStar, a safety and navigation system installed in musts new GM cars. The drivers must agree to supply goods OnStar Their Insurer with a monthly odometer reading on Which to base the discount.
Progressive's Trip Sense, available, Minnesota, Michigan and Oregon, Requires customers to install a small device to car's onboard diagnostic Into Their port, and then download the information to Their home computer and send it off to Progressive at regular intervals. Progressive's discount for the program ranges from 5% to 25%, but Progressive spokeswoman Shannon says the company Beczkiewicz was working on a revised discount model.
Mayfield Village, Ohio, company, the nation's third-Largest Insurer car, declines to say how many customers to Have Signed Up For The Trip Sense program.
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