First problem, it only works for GM drivers who have the Onstar system. Well, since I just read this... I guess that's not much of a problem if you have a new GM, of course it still won't apply to the millions of us who don't have a "new" GM.
"GM wants people to start buying its cars specifically because they come with the service. By the end of this year, 95-percent of GM cars sold in the US and Canada will have OnStar standard. The first year of service is free, and the hope is that by the end of 12 months the customer will find it indispensable. In case that isn't enough, in addition to the word-of-mouth advertising by 80 million people who have already been assisted by OnStar, GM is providing dealers with more training and increase its marketing of the service, noted primarily by moving Tiger Woods from the Buick campaign to OnStar." http://www.autoblog.com/2007/07/15/onstar-proliferation-at-gm/
Second problem, this is just a plan to hold GM customers, without giving them a fair deal on their insurance. Fair would be charging per mile, regardless of all other factors. Insurance only takes care of you when you are driving your vehicle, so why charge a flat rate that has no connection to how or if you drive at all? Most musclecars are just weekenders and car shows, but we're going to pay flat annual insurance premiums regardless.
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.
The plan 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.
In fact, all OnStar customers receive a discount for simply having an active OnStar subscription.
Really? I haven't been asked by my insurance agent if I have Onstar... have you?
http://www.autoblog.com/2007/07/17/gmac-offers-mileage-based-insurance-through-onstar/
I like the idea of gouging customers less, but when the idea of pay at the pump for insurance is explained to you, nothing else will ever seem fair.
