JUL 22

Driving less is the best way to prevent having a car accident. When you're on the road less, you're just less likely to crash your car (or have someone crash into you.) So your insurance company has a vested interest in making you pay more if you drive a lot.

Unfortunately, this one factor, the most important in determining the likelihood of having an accident, is very difficult for insurance companies to gauge. They can't come by and check everyone's odometer. So, as it stands, insurance companies don't vary their premiums very much because they can't trust people to tell them how much they do or don't drive.

But that may now change. GM drivers can now opt-in to a program that sends their mileage statistics to GMAC. And if the yearly mileage is under 15,000, GMAC will reduce their rates up to 54%.

It's part of GM's OnStar program. And, if it sounds like a possible violation of privacy to you, it kinda is. That's why you have to choose to join the program. Still, it's a little creepy...basically paying you for personal information about your driving habits. Not that insurance companies haven't been delving deep into our privacy since the beginning of time. We'll see how long it is before they start keeping track of where you drive, and whether you speed.

Nonetheless, I like the program, if only because it's a more fair way to insure vehicles. Oh, and because it uses some pretty cool technology to give people one more reason to drive less.

Comments (12)

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there has to be a flip side...
written by Alain, July 22, 2008

if you drive over 30K your insurance goes up?

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I love this idea
written by Brian Siana, July 22, 2008

just another way to make it worth while to avoid driving. people need to consider all of the monetary costs of driving their car, including gas, maintenance (oil, tires, wear and tear), effect on resale value, and now insurance.

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Need more details..
written by Anthony, July 22, 2008

So do they track you via GPS? Or do they just read the odometer out and send it to the insurance company?

I don't have a problem with them sending the odometer info to my insurance company (the place that checks my oil enters my odometer into their computers every time), but I would have a problem with GPS data being transmitted.

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Great "green economic" program
written by Gustavion, July 23, 2008

I love this idea. Its and opt-in program so I wouldn't consider it a violation of privacy. Its also another step toward melding business ideas with environmentally friendly ideas. You might be interested in another such example: http://www.simplestop.net They stop your postal junk mail and benefit the environment.

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written by Mark, July 23, 2008

In nevada, we have to take a smog test every year, so our annual mileage is on record. No big privacy deal to me. However, I doubt insurance companies want to give discounts to us low mileage drivers, that would cut into profits.

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Frontend vs. Backend
written by Corban, July 23, 2008

Profit = Revenue - Costs.

Mark, you're missing half the equation. Low mileage drivers cost less in terms of being less risky. This is also why insurance companies like healthy people, even though sick people naturally pay more premiums: the profit spread for healthy people is simply better, while you'd need to charge sick people oodles (sometimes more than their annual income) to make the same amount.

Yes, corporations are all about money...but there's more than one way to make money than charging more.

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Good idea, with limits
written by Robert Wood, July 23, 2008

As long as ideas like this are available to people who want to volunteer for it ideas like this are fantastic. I would hate to see the day when we have to allow anyone to have access to that kind of personal data just to get coverage. This can be applied to car, home, and health insurance. Could be real scary.

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written by Danno, July 23, 2008

I get tired of people trotting out the tired old horse of "privacy issues". It's as if people knowing anything about you is a threat to your way of life. Get over yourselves! Unless it's a health or financial issue, there's nothing to be afraid of.

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@Anthony
written by Ben, July 23, 2008

I thought the exact same thing. It's a personal choice, of course, but for me at least, sending my odometer reading to my insurance company wouldn't bother me in the least, though sending GPS info of where I went is something I definitely wouldn't want.

I wonder if that'd be next. Comprehensive coverage rates based on whether you park in an area with lots of vandalism? Collision coverage rates based on whether you're on roads that get a lot of accidents? I guess as the article says, that's why it's opt-in. Some people might not be bothered by sending that info, while some WOULD be bothered by even sending odometer readings.

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privacy issues
written by Robert Wood, July 23, 2008

Well Danno don’t be too quick to shoot that old “privacy issue” hose. Giving up rights for the sake of corporate or government efficiency is a fast pace to tyranny.

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r
written by Robert Wood, July 23, 2008

Horse that is

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written by shane, October 24, 2008

Thanks for the providing good information - this is really helpful for car insurance.I found another good one that helped me find an incredible rate http://www.carinsuranceassista...php?id=New Car

they give you the best rates from lots of local providers

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