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Lower Insurance Rates for Some OnStar Customers

By Joe Benton
ConsumerAffairs.com

July 17, 2007

OnStar • OnStar Owners Bristle at Loss of Service • OnStar Goes in Pursuit of Bad Guys • Lower Insurance Rates for Some OnStar Customers • GM Promises "Star Treatment," Dumps Old OnStar Subscribers • OnStar Goes Digital, GM to Drop 500,000 Subscribers • Consumer Complaints --- • More about GM ...

GMAC Insurance plans to use the new digital OnStar system from General Motors Corp. as a tracking system to verify mileage claims by policyholders participating in a program to reduce their insurance rates.

The insurance company will offer discounts on premiums to drivers who don't put a lot of miles on their vehicles.

Motorists will have the opportunity to save money if they permit GMAC Insurance to track their odometer readings through the OnStar service.

The insurer plans to offer the discounts in 34 states. Drivers who cover 15,000 miles or less a year will be eligible.

Gary Kusumi, CEO of GMAC Insurance Personal Lines said OnStar is the first mainstream product that enables an insurer to track miles driven by policyholders. He said that people often understate the miles they drive to get lower premiums.

GMAC Insurance suggested that policyholders who agree to have their driving habits monitored by their OnStar system could save 13 to 54 percent on their premiums, depending on how little they drive.

Those savings include a 5 percent anti-theft discount the insurer already offers to customers who have OnStar.

GMAC Insurance has been testing the program since 2004. Roughly 10,000 owners of GM vehicles participated in the test.

Mileage data will come from the monthly vehicle diagnostic e-mail messages that OnStar sends to subscribers. OnStar will provide no other information to GMAC Insurance and it does not keep historical data on subscribers' driving practices.

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