National General Low-Mileage Discount Review & Complaints | Pay-per-mile

The National General Low-Mileage discount program is one of the earliest incarnations of usage-based insurance and operates much as it always has, using the OnStar system. National General’s connection with General Motors means that they offer this discount program only on vehicles that have OnStar, which are mainly GM vehicles (with a few exceptions noted later in this review). National General caters to GM employees and GM vehicle owners with additional discounts, so it is likely that a lot of their customers will own a GM vehicle.

National General ‘s Low Mileage program is one of the few programs out there that offer car insurance discounts solely based on mileage – no other driving habits are recorded. Any driver whose annual mileage comes in under 15,000 will qualify for a discount. It is about as simple and straightforward as usage-based insurance can be.

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About the Low Mileage Discount Program

National General introduced their usage-based mileage program in 2004, several years after OnStar first hit the market. The system, which helps provide a variety of navigation and location services, can also transmit mileage information, and National General gives customers the option of allowing that information to be provided to them in return for a discount on lower mileage drivers.

Since it uses only the OnStar system, there is no need for a plug-in device or a mobile app to gather information, but the customer will have to have an active OnStar subscription to participate.

National General’s program has not changed much since its inception. While other insurance companies have moved forward with usage-based discount programs that use various factors to calculate discounts, including braking and acceleration habits, speed, and time of day, National General still uses only mileage.

That means the program is likely to appeal only to drivers that have an annual mileage of under 15,000 miles, although the program does still offer a discount for having an OnStar subscription.

The Low Mileage discount program is currently available in 35 states.

How It Works

The National General Low Mileage discount program works by reading your odometer through the OnStar system. As mentioned above, this is only possible if there is an active OnStar subscription; it cannot be used otherwise. There is no other option to get this discount.

Once the OnStar subscription is active, National General policyholders can sign up for the program. After that there is nothing further that needs to be done; the company will simply access your OnStar data and award you a discount based on your actual mileage.

For customers that have already had an OnStar subscription for some time, previous odometer readings can be used for the discount. That means there should be no waiting for your mileage to be confirmed. What the site doesn’t specify is whether new subscribers will need to wait a full year for data to be collected and a discount to be earned.

Any driver in the program with an annual mileage of under 15,000 miles will earn a discount, and there are discount tiers based on the actual number of miles. We will take a closer look at those tiers later in this review, but not surprisingly each tier down receives a bigger discount. The lowest level of miles driven can earn a discount of 54%.

What National General Records

Although the OnStar Onboard Diagnostics system can obtain a lot of information when it is active in your car, the only piece of that information that is transmitted back to the insurance company is your actual mileage as seen on the odometer.

The website states that no additional data is gathered or recorded for any purpose.

How Information Is Used

The odometer readings taken from OnStar are used solely for the purpose of calculating a discount.

Unlike other companies, there is no internal research for which collected data is used, at least not according to the National General website. It is worth noting that your OnStar system does collect and record a variety of information, but that isn’t related to the National General insurance program. Concerns about what OnStar is recording in general are best referred to that company’s privacy policies.

Low Mileage Discounts

National General’s program promises up to an impressive 54% in savings, and unlike with other programs, there are clear markers for how to obtain each level of discount on your policy. The website provides a chart that shows the discount for each tier of mileage.

Before we look at that, we should point out that there is a discount just for having an active OnStar subscription. National General gives subscribers 20% off their comprehensive and collision premiums and 10% off of their liability premiums. That is already a pretty big discount, but it has to be weighed against the cost of having an OnStar subscription. These subscriptions start at $24.99 a month, according to the OnStar website. That cost might well eradicate any insurance savings, but if you were planning to pay for OnStar anyway, it’s nice to get a break on your insurance in return.

The website states that the maximum annual mileage that can be recorded in order to receive a discount is 15,000, but it shows a discount in the chart for miles above that amount. The site says that mileage above 15,000 does not incur any premium increases, and the driver can still get the OnStar subscriber discount, but the 7% discount listed in the chart doesn’t match what the fine print says is the OnStar subscriber discount amount. We were unable to find any information on this discrepancy, nor were we able to confirm whether the 7% is on top of the original OnStar discount.

Here are the discount tiers and discount percentages as listed on the National General site.

0-2,500 miles = 54%
2,501-5,000 miles = 39%
5,001-7,500 miles = 34%
7,501-10,000 miles = 26%
10,001-12,500 miles = 18%
12,501 – 15,000 miles = 13%
15,000+ = 7%

54% is a really impressive discount, but driving less than 2,500 miles a year is a difficult accomplishment. This level of discount may be reachable by people who are retired or work at home, as long as they do not take any big road trips or travel far from home for regular errands.

The next two levels have similar discount amounts, after which the amount starts to drop off quite a bit. It is generally believed that 12,000 miles a year is average, and that means that if you drive the average amount, you can get a discount of 18%. The U.S. Department of Transportation has an average number that’s a bit higher, at 13,474. Drivers that come closer to this average will move into the 13% category. Both of these are in the range of the average discount seen on other usage-based programs, but those programs require meeting more stringent standards than simply not driving too much.

There is not a National General Insurance military discount.

Eligibility for National General’s Low Mileage Discount

Like most such programs, the low mileage discount is only available to National General insurance customers. It appears to be open to both new and existing customers.

As discussed above, in order to be eligible, the driver must own a vehicle with an OnStar system, and the car must be from model year 2004 or newer; specifically, the site states it is only offered on cars delivered after April 21st, 2004. This is likely due to the necessary technology on the OnStar system and matches up to the year this discount program was first launched.

While most vehicles that have OnStar are GM, the system was licensed to other manufacturers for a certain time period. Specifically, Acura, Isuzu, Subaru, and Volkswagen cars built between 2002 and 2006. That means two model years of these manufacturers may have the necessary OnStar technology to run the program. Of course, since National General gives its best rates to GM owners, drivers of other cars may be less likely to select this company in the first place, and may get a better rate elsewhere regardless of the low mileage discount.

Also, as discussed above, there must be an active OnStar subscription in order for the program to access information to calculate a discount.

Installation

The driver does not have to do anything to get this program running, since there is neither a plug-in nor an app that needs to be installed.

OnStar is already part of your vehicle, and if you have a subscription already, there’s nothing further to be done. If you don’t, you will need to contact OnStar in order to activate it. This involves setting up monthly billing for the subscription costs, and OnStar will assist with the steps to activate.

How the Low Mileage Program Stacks Up

National General’s usage-based program is one of the most straightforward we have seen. It does not require a lot of effort, doesn’t collect a lot of personal information, and getting a discount is easy.

Many of the complaints we see with other such programs center on the difficulty in meeting what are confusing standards for earning a discount. Programs that record hard braking and acceleration, in particular are confusing to drivers who are not clear as to what constitutes a safe or risky stop or start. National General’s program has none of the confusion.

The discount amounts are made very clear in the chart, and there is no question as to what needs to be done in order to earn those discounts; you simply see how many miles you drive, and then check the chart. The only confusion we found with the program was what the discount is for those that drive more than 15,000 miles.

One strike against this program, however, is that it’s not free. You do have to pay a monthly subscription to OnStar to earn the discount. That is fine for those that already subscribe or want to subscribe for other reasons, but it may be a deterrent to those that don’t. $24.99 a month for the lowest end subscription can quickly eat away at any savings from the discounts. Unless you land in one of the bigger discount tiers, it may not be worth it, although the subscription discount, if combined, might make this more appealing.

Another issue is that National General does not offer a method for those whose cars do not qualify or those who do not want an OnStar subscription to earn a similar discount. The use of a plug-in device or other odometer monitoring system as an option would allow more drivers to take advantage, and it might even make the program a bigger selling point for those that are considering switching. As it stands, however, it’s likely that it will only appeal to those that are already National General customers and already have an OnStar subscription.

The discount amounts for this program are impressive. While other companies offer a potential savings of 30% or more, on average, drivers actually save in the range of 10-15%. National General drivers can save more than that simply by reducing the number of miles they drive each year. Those high discount amounts are necessary, however, considering the annual cost of a low-end OnStar subscription comes to about $300.

Is Pay-Per-mile insurance cheaper?

It depends on the number of miles you drive. If your driving habits result in low mileage, pay-per mile may be cheaper than a traditional car insurance policy.

Can you lie about the mileage on car insurance?

When it comes to pay-per mile programs, insurance companies need accurate information to measure your miles. Most insurers ask you to install a device in your car to monitor your location, driving speed and how safely your drive, or they may ask you to take a picture of the odometer on a regular basis. If you make changes to the device and decide not to report them, you could risk your policy.

What happens if you go over your annual mileage?

If you go over your annual mileage, then the insurer might invalidate your policy and refuse to pay out if something happens. Car insurance will only cover you for the number of miles that were estimated when creating your policy and anything beyond this may be considered an “uninsured event”.

The Bottom Line

Although this program is very limiting in terms of who can qualify and how, it also offers some big discounts and a simple way to earn them. It is not likely to be a popular option for those with long commutes or driving habits that put their annual mileage well above average, but for those whose miles-per-year falls in the average range or lower (and that meet all the requirements including OnStar subscription) it’s an easy and no-risk way to get a lower premium.

With pay-per-mile auto insurance, the fewer miles you drive, the more money you save. Insurance companies base rates on how much you drive, and if you drive less, your rate goes down.

National General auto protection plans are offered even without the discount.