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State Farm's Innovative Mileage-based Discount Program Now Offered in Texas


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AUSTIN, Texas, April 4, 2011 -- State Farm is rolling out an innovative mileage-based insurance program known as Drive Safe & Save (DSS) in Texas, effective April 4.  State Farm is the largest insurer in Texas to offer such a program. DSS is a voluntary option for customers with a simple premise: the fewer the miles driven, the greater the savings.

To participate in State Farm's Drive Safe & Save program, a policyholder must have a vehicle with an active OnStar account, with OnStar vehicle diagnostics to report odometer readings.

"We are thrilled to be the largest auto insurance company in Texas to offer this innovative program and believe our customers will respond positively," said Mike Hargis, State Farm Agency Vice President. "Drive Safe & Save will help us better match price to risk. The fewer the miles driven, the greater the savings."

When first enrolling in DSS, customers will receive a 3 percent discount on their auto premium.  Once State Farm has at least 100 days of odometer readings, the annual mileage will be calculated to determine the customer's mileage-based discount. That discount will be applied at the first policy renewal date after the customer has enrolled in the program.

Discounts will range from 1 to 30 percent depending on annual mileage, with the vehicles driven the fewest miles receiving the greatest savings.  For example, a vehicle driven 11,000 miles annually will receive a 7 percent discount.  Vehicles driven in excess of 16,000 miles per year will receive the minimum savings of 1 percent.  The discount will be recalculated at every renewal in which we have at least 100 days of odometer history for the vehicle.

State Farm currently has more than 387,000 policyholders in Texas who drive vehicles equipped with the OnStar device.

The new program is prospective; the odometer readings will be used to determine future premiums.  The information will not be used to make adjustments retroactively to premiums already paid. If a customer chooses not to participate, they would remain in today's current rating structure which does not differentiate between long and short annual mileage. Customers can enroll through their State Farm agent or on State Farm .

For more information, visit State Farm in Texas.

Here are sample annual mileage levels with corresponding estimated savings for a customer whose annual premium is $600. Savings will vary depending on actual miles driven, characteristics of the driver, use of the vehicle, and coverages selected.


Sample Annual Mileage

Percentage Savings

Annual Savings

500

30%

$180

3,500

20%

$120

6,000

15%

$90

8,500

10%

$60

11,000

7%

$42

13,000

5%

$30

15,000

3%

$18

More than 16,000

1%

$6