Telanon Blog

Two related insurance companies, Sequoia and Personal Express, were approved on Earth Day to offer “green” car insurance in California.  They are the smallest insurers by far to win  approval.  In 2009 the larger of the two, Personal Express, was ranked 101st in California private passenger insurance market share, at about 4% of the market.  Sequoia was ranked 151st, with .05% share.

In the approved filing, specific details are given for AccuRate Express, the plan for Personal Express.  Some interesting features are:

• Like already-launched plans by State Farm and Auto Club of Southern California (AAA), customers may self-report odometer readings
• Unlike the other two plans, AccuRate Express does not provide for odometer reporting by a “technological device” — either factory-installed (OnStar, under State Farm’s plan) or aftermarket (a Delphi-supplied plug-in device for Auto Club, and OnStar’s rear-mirror-replacement unit for State Farm, both available later this year)
• Instead, AccuRate Express gives a 1% larger discount compared with simple self-reporting for either: 1) providing a recent invoice with odometer recorded from an oil change, tune-up, smog test, or car repair; or 2) driving to their office to have the odometer read

Already it is clear that verified-mileage plans will offer California consumers a number of new choices for insurance.  Their challenge, as for consumers outside California, will be to sort through the details to find the lowest-cost plan for each vehicle.  At least in California that only depends on how far a vehicle is driven each year, not on how it’s driven too — at least for now.

Last week CSE Safeguard Insurance Company proved that verified-mileage auto policies won’t be limited to the largest insurers in California.  They are 70th largest in the state, and plan to offer their verified-mileage SAVE program immediately after approval.  The only insurers filing before them were the state’s largest auto insurer State Farm and second-largest Auto Club of Southern California.  Both were recently approved and launch this month.

Here is how these three verified-mileage plans are similar:

• Any privately-insured vehicle can be covered through “self-reporting” of odometer readings by the vehicle owner to the insurer
• The insurer reserves the right to independently verify accuracy of such “self-reported” odometer readings

Here are some ways they differ:

• CSE only offers the “self-reported” alternative; State Farm also offers a “device-based” alternative for OnStar equipped vehicles,  and Auto Club offers a “device-based” choice using a telematics device supplied by Delphi that can be attached to most vehicles
• State Farm and Auto Club start with a fixed discount for the first policy period, but CSE does not; their SAVE program  immediately starts its full verified-mileage discount based on expected annual mileage
• CSE “trues up” mileage for their discount calculation at the end of each policy term based on actual miles driven; fewer miles than expected earn a refund, and more miles than expected require more payment
• Approaches to independently verify “self-reported” odometer readings may be quite different

• State Farm may require independent odometer readings
• CSE may accept a recent photograph of the odometer, a recent oil-change invoice with mileage indicated, or a recent smog certification showing an odometer reading
• Auto Club may use any approach that meets regulations