Nationwide, United States
Non-Toll Pricing: A Primer
Summary Information
Pay-as-you-drive-and-you-save (PAYDAYS) car insurance allows companies to more accurately bill their customers on the basis of crash risk and provide policyholders a financial incentive to drive less. In Vehicle Data Recorders (IVDR) collect data on the vehicle utilization pattern to determine the discount level on the driver's insurance premium. A Brookings Institution study estimates that 63.5 percent of all households would experience savings with PAYDAYS insurance, and such savings would amount to an average of $270 per vehicle and $496 per household, among households that do save.
RESULTS
In January 2004, GMAC Insurance and OnStar jointly announced that drivers in Pennsylvania, Arizona, Indiana, and Illinois with active OnStar accounts, which are used to communicate vehicle mileage to GMAC Insurance, would be eligible to save from 5 percent to 40 percent on their car insurance, depending on which of seven mileage categories the amount of their driving fell. The GMAC Insurance discount—which has increased to 54 percent for the lowest mileage drivers driving 2,500 or fewer miles per year and is at 13 percent for those driving between 12,501 and 15,000 miles per year—is available in most states to drivers who use OnStar.
By 2008, OnStar’s market penetration had grown to over five million subscribers in the United States, and a year of coverage became standard on every General Motors vehicle.
