“We implemented a verified mileage program because we expect that it will provide more accurate, lower rates to policyholders who choose to participate in the program,” says AAA’s Christopher Baggaley.
Tom Conley, State Farm Agency vice president, says, “We believe customers will respond positively to this program.”
Beginning on Feb. 28, 2011, State Farm customers will have an option to move into the new verified mileage plan, which State Farm has labeled its Drive Safe and Save program. Under the plan, State Farm will offer an initial 5 percent discount for the first policy term to insured drivers who agree to self-report their odometer readings at the beginning and end of each policy period or who agree to allow State Farm to access their mileage data automatically when the insured’s vehicle has an active On Star system.
State Farm presently has 3.3 million auto policies in force with written premiums of $2.5 billion in California for 2009. They estimate 25 percent of their policyholders may select the optional program which would result in a saving to policyholders of $31 million.
Beginning Feb. 1, 2011, the Automobile Club of Southern California’s Pay-Drive program will be made available to insured drivers who agree to report their odometer readings at the beginning and end of each policy period or who agree to plug in a small “telematics” device into their automobile which will automatically record the number of miles driven.
The rates for those who verify their actual miles driven via these methods will now be, depending on the number of miles driven, from 1 percent to 10.5 percent lower than those insureds in the same “mileage band” who simply estimate their miles for the policy term.