Of all the ways an insurance company calculates a driver's premiums, the one factor that's been left out of the equation is real world mileage. Sure, we tell the our insurance provider how many miles we travel, but if its less than the stated minimum, there's no way to prove we've been on the road less. GMAC and OnStar are planning to rectify the matter, post haste.

The plan, which has already been employed on 10,000 drivers in 2004, is to allow subscribers to GM's OnStar system to submit their mileage, and if its less than the 15,000 miles specified in the year-long contract, a discount will be dolled out.

The breakdown will allow drivers who travel between 12,001 and 15,000 miles a year to get a 13-percent reduction, while drivers who clock under 2,500 miles will get a discount of 54-percent.

Of course, this is all assuming that you're driving an OnStar-equipped GM product and your insurance is through GMAC, but with GM's planned push of the OnStar system, it might be just another reason for drivers to head on down to their local dealer.

GM's press release is posted after the jump.

[Source: General Motors]


PRESS RELEASE

Auto Insurance First: Technology Lets Americans who Drive Less, Pay Less

GMAC Insurance rolls out nationwide discount program for low-mileage driving; leverages in-vehicle OnStar by GM technology to save up to 54% on premiums

DETROIT AND ST. LOUIS – Today, GMAC Insurance and OnStar announced the rollout of the Low-Mileage Discount program where Americans who drive less, pay less on their auto insurance. The opt-in program is the first of its kind leveraging state-of-the-art technology using OnStar to allow customers who drive fewer miles to benefit from substantial savings. Eligible active OnStar subscribers simply sign up to save on their premiums (up to 54%) if they drive less than 15,000 miles annually. Since the pilot program began, 10,000 participants have enrolled in the Low-Mileage Discount program.

Under the program, new customers receive an automatic 11% discount, as well as the GMAC Insurance OnStar Subscriber Discount, upon enrollment (existing customers receive a discount based on historical mileage). With the subscriber's permission, the odometer reading from his or her monthly OnStar Vehicle Diagnostics email is forwarded to GMAC Insurance. Based on those readings, the company will decrease their premiums using discount tiers corresponding to miles driven. There is no additional reporting, downloading or monitoring required, and no additional data is gathered or used for any purpose other than to help manage transportation costs. Customers who drive more than 15,000 miles per year are not penalized. In fact, all OnStar customers receive a discount for simply having an active OnStar subscription.

"Customers who drive less should pay less, and this program allows customers to use technology already in their vehicles to give them the discounts they deserve," said Gary Kusumi, president and CEO, GMAC Insurance. "Giving consumers the power of cost control is a welcome advance, especially as people manage their transportation costs more closely in the midst of fluctuating gas prices. The program also encourages people to limit unnecessary driving, helping the environment in the process."

Robert Panczak of Schaumburg, IL, experienced the benefits of the GMAC Insurance Low-Mileage Discount program first-hand as a participant in the program pilot. Panczak is savvy about the insurance industry and wanted to find a company that offered the best value for his needs. He had three cars in all, but one, a Saturn VUE equipped with OnStar, was driven very rarely and only for short trips. Since beginning the pilot program in March 2006, Panczak has saved $500 per year with the Low-Mileage Discount alone.

"Before switching to GMAC Insurance, my premiums were eating me alive," Panczak said, "and since I didn't use one car as often as the others, why should I pay the same amount in insurance? Now, I don't have to."

"We are bringing more value to the 2.8 million subscribers who receive monthly OnStar Vehicle Diagnostics emails," said Chet Huber, OnStar president. "Not only are we providing them with information about the health of key operating systems in their vehicles, we are helping them to save on their transportation costs as well."

OnStar Vehicle Diagnostics is an industry-first service available only from GM, which collects valuable maintenance information on four of the vehicle's key operating systems from hundreds of diagnostic checks and sends a personalized e-mail directly to the owner once a month.

The GMAC Insurance Low-Mileage Discount program is easy to initiate, with no effort from the customer beyond initial enrollment. There are no additional devices installed in the vehicle, and the only data that GMAC Insurance collects are miles driven on a monthly basis. Other low-mileage discount programs have met with customer resistance due to privacy concerns over the level of data collected.

Drivers can also opt to take advantage of enhanced accident support services. If a GMAC Insurance customer is involved in an collision, they can request the OnStar advisor to transfer them to a representative to initiate the claim and arrange for towing and rental car services, after responding to any emergency assistance needed.

Customers must enroll in OnStar Vehicle Diagnostics to be eligible for the GMAC Insurance Low Mileage Discount. Eligible OnStar subscribers can enroll in the opt-in service at no additional cost by simply pressing their blue OnStar button and asking to be enrolled, or by visiting the OnStar Web site ( www.onstar.com ). OnStar Vehicle Diagnostics service can be activated on most 2004 model-year or newer OnStar-equipped GM vehicles that have GM's Oil-Life System. The only information shared with GMAC Insurance for the Low-Mileage Discount is miles driven on a monthly basis.

OnStar will be standard on most GM retail cars, trucks and SUVs in the United States and Canada by the end of 2007. Currently, the GMAC Insurance Low-Mileage Discount is available in the following 34 states:

* Alabama
* Arizona
* Colorado
* Florida
* Idaho
* Illinois
* Indiana
* Kentucky
* Louisiana
* Maryland
* Michigan
* Minnesota
* Mississippi
* Missouri
* Montana
* Nebraska
* Nevada
* New Hampshire
* New Mexico
* New York
* Ohio
* Oklahoma
* Oregon
* Pennsylvania
* Rhode Island
* South Carolina
* South Dakota
* Tennessee
* Texas
* Utah
* Virginia
* Washington
* West Virginia
* Wisconsin

GMAC Insurance plans to extend availability to additional states in the next year.

Doing the Math: Specific Savings

Following is a breakdown of the discounts offered in the GMAC Insurance Low-Mileage Discount program, including the OnStar Subscriber Discount:

Annual Mileage Average Total Savings*

0-2,500


54%

2,501-5,000


39%

5,001-7,500


34%

7,501-10,000


26%

10,001-12,500


18%

12,501-15,000


13%

* Average total savings include the Low-Mileage Discount and the OnStar Anti-Theft Discount combined. The LMD is full-policy savings at the vehicle level. The OnStar Subscriber Discount provides savings off of the Bodily Injury, Comprehensive and Property Damage coverages of the vehicle policy. Drivers who average fewer than 5,000 miles per year may receive even more than 35% in savings.

In addition to the Low-Mileage Discount program, GMAC Insurance offers even more discounts on auto insurance premiums for current GMAC Auto Finance and GMAC Mortgage customers; GM Cardmembers; GM/GMAC employees and retirees; active OnStar subscribers; customers with multiple GM vehicles; and customers who qualify as safe drivers. For more information on the GMAC Insurance Low-Mileage Discount Program and additional discounts for GM and GMAC Insurance products, and to find a local independent agent, call 1-800-GMAC-123, or visit www.gmacinsurance.com to receive a quote.

The GMAC Insurance Group is one of the largest automobile insurers in the United States and is a wholly owned subsidiary of GMAC Financial Services. GMAC Insurance Personal Lines offers a variety of property and casualty products, including personal auto, RV, motorcycle, boat and commercial auto insurance. With a nationwide network of claims professionals, local independent agents and a 24-hour, toll-free claims hotline available 365 days a year, GMAC Insurance provides superior claims service for its customers.

About OnStar by GM

Now with more than 5 million subscribers in the U.S. and Canada, OnStar, a wholly-owned subsidiary of General Motors, is the leading provider of in-vehicle safety, security and communication services. OnStar is available on more than 50 MY 2007 GM models. One year of OnStar will become standard on nearly all GM retail vehicles in the United States and Canada by the end of 2007. More information about OnStar can be found at www.onstar.com. For MY 2007, General Motors is offering Advanced Automotive Crash Notification (AACN) on more than 2 million vehicles in the U.S. and Canada. This service is available on more than 40 GM vehicles – up more than 20 percent from MY 2006 – including a broad range of OnStar-equipped vehicles ranging from small sedans like the Chevy Cobalt to sport utility and luxury vehicles. OnStar receives approximately 1,200 airbag deployment notifications and 700 AACN calls each month.