So let’s say you don’t live in Washington or Oregon, and you don’t want to buy a GM vehicle, what do you do to save on car insurance? Easy: You say you drive it on your farm. Auto insurers offer farm-use discounts of up to 20 percent. And a lot of less-than-gentleman farmers harvest the savings.

Quality Planning verifies policyholder data for auto insurance companies. They looked at 80,000 vehicles for which the farm-use insurance discount was claimed. About 8 percent, or 6,382 vehicles, were housed in ZIP Codes where there is little or non agriculture. Porsche Carreras, Mercedes SL550s and BMW Z4 were found on farms that do not exist.

An Audi A4 classified as a farm vehicle was found in Brooklyn, N.Y. ($389 annual savings.) A Cadillac Seville in Los Angeles was listed as a farm vehicle (annual savings $61, some people cheat at all cost.)

According to Quality Planning, the virtual farmers cost the insurance industry $150 million a year.

Farm use is rarely verified, writes the Los Angeles Times. Sometimes it’s the customer who lies. Some brokers cheat to cut premiums to win business. While misrepresentation usually remains undetected and unpunished, it can bite the wannebe farmer painfully when the insurance is needed. If the alleged farmer is in an accident and the insurer discovers the misrepresentation, the company might deny the claim. And that’s no small potatoes.

We didn’t want to mention it when we wrote about GM’s buy a car, get free insurance deal. If we would have said it, it would have been the nasty B-word all over again. The rest of the media showed less compunction. “The worse you drive, the bigger the deal” headlined MSN Money. The deal can be staggering under the right or wrong circumstances, says MSN Money:

“For a busy Seattle family with two teenage boys — one of whom has a speeding ticket? We ran comparison quotes on a shiny new 2011 Chevrolet Tahoe LTZ. The lowest premium we found was $4,890 a year; the highest was $10,300.”

MSN interviewed Jessica Caldwell  of Edmunds.com (video here, no embed,) and she had this to say:

“It looks like anyone can qualify. So if you are that 22 year old living at home, and your mom and dad have disposable income and want to buy a Camaro, sign up for it.”

So is that what he meant when GM spokesman Tom Henderson said that many potential new car buyers found it difficult to afford insurance for a new vehicle?

At GM, Joel Ewanick and  Chris Perry need to repeat the miracles for which they became famous  at Hyundai. So what do you do in that case? “Let’s just do the same thing again.”

If GM would do a repeat of the Hyundai Assurance Plan (lose your job, return your car), with a 10 year warranty thrown in, the journos would snicker, but the cars would fly off the lot. But at GM, this would be too gutsy.  So what about the next best idea? That’s right: “Free insurance!”

Any driver from Oregon and Washington state who buys or leases a new GM “vehicle through Sept. 6 and titles the vehicle in either state will receive a free one-year automobile insurance policy from MetLife Auto & Home,” reports Automotive News [sub].

The insurance covers liability (up to 100,000 per person, and up to $300,000 per occurrence) and physical damage. The insurance come with Met Life’s new car replacement feature: If, in the first year or before 15,000 miles, are on the clock, the new vehicle is wrecked and not salvageable, MetLife Auto & Home will fix or replace the wrecked vehicle with a new one without factoring in depreciation. I ran a quick quote check for my 2011 Silverado C3500 Crewcab, and the program would save me $2100 a year. GM probably will pay less.

So why only Oregon and Washington? It’s a test. Cautious GM wants to see whether the insurance can move enough metal. They picked the toughest states. Oregonians and Washingtonians traditionally are GM adverse. If the program makes it there, it will make it anywhere.

Forget crash test results, star ratings, or the number of acronym-laden electronic nanny systems that a vehicle has. If you’re a play-it-by-the-numbers kind of person and want to know safe a car is, statistically speaking, you’ll want to check out the Insurance Institute for Highway Safety’s new status report on “Dying In A Crash” [PDF].  The latest data comes from the 2006-2009 period, and includes only 2005-2008 model-year vehicles with at least 100,000 “registered vehicle years” in that time frame (if a vehicle was substantially redesigned in 2005-08, only the most recent design is included). Also,

researchers adjusted for a variety of factors that affect crash rates, including driver age and gender, calendar year, vehicle age, and vehicle density at the garaging location. Previously, researchers had adjusted only for driver age and gender.

“The adjusted driver death rates do abetter job of teasing out differences among vehicles, but they can only go so far. For one thing, people don’t behave the same when they’re behind the wheel of a sports car as when they’re driving a minivan. And some people are more susceptible to injury and death for reasons that can’t completely be adjusted for.”

Keep in mind that this data is for drivers only, since passenger data is harder to adjust for. Also, statistics don’t determine your safety on an individual level… that’s up to you every time you take the wheel. For more caveats (and the complete list), check out the report itself… or just wave this in front of your friends and family members who drive cars on the “highest rates of driver death” list, and hyperventilate at them. They’ll either thank you or tell you to take your nannyish concern elsewhere.

And how will Progressive obtain all that info? You guessed it, with a gizmo. Plugged into the OBD system, Snapshot “keeps track of your good driving habits,” as the particularly obnoxious Flo commercial promises. “In fact, Snapshot cares only about a few small things. Like how hard you brake, when you are on the road, the miles you drive.”

So what about bad driving habits? “Other stuff like how fast you drive or where you drive – it just doesn’t care about that,” promises Flo with the combined credence of Benedict Arnold, Pinocchio and Bernie Madoff.

Actually, “The only thing it cares about is saving you money.”

Ok, let’s add Richard Nixon.

The gizmo is part of Progressive’s “Pay As You Drive®” (yep, they trademarked that) program. It should be renamed to “Save While You Stop™”. Progressive offers snap-shot drivers discounts of up to 30 percent, if they brake gently, if they don’t drive during rush hour, and if they stay at home between midnight and 4am.

Basically, the less you drive, the more you save. Most likely you will achieve the full 30 percent savings when you don’t drive at all. Say hello to your car’s ankle bracelet. Oh, Progressive says the gizmo does not contain a GPS and won’t know how fast you go where. (Maybe speed does not kill. Or that feature is left for Snapshot 2.0)

“Other insurers—most notably Allstate Corp.—are working hard to catch up with their own usage-based insurance offerings,” threatens the Journal.

Progressive meanwhile is working on the next-gen Snapshot. Progressive Chief Executive Glenn Renwick told the Journal that in a few years, the gizmo will be obsolete. The data would be gathered from a customer’s cellphone instead.

In the meantime, let’s hope Progressive keeps the insufferable Flo commercials. They might be the biggest barrier to entry.

“Armed with reports of accidents for which they’ve already paid claims, State Farm insurance has asked Toyota to repay them for any crashes related to unintended acceleration by its vehicles,” reports USA Today. The request for a little Farm Aid is just the beginning.

Other insurance companies are expected to – make that will follow and ask for money. In the trade, this is called “subrogation.” No, it’s not a kinky sex practice. It is a complicated matter on which a Wikipedia has a whole article, in case you are interested. Executive summary: The insurance companies did pay the claim, Toyota is supposed to hold the bag. To the tune of another $20m to $30m. If the insurers get their money back, customers who filed a claim may get their deductibles refunded. (Just make sure that you will.)

State Farm had sent a letter to Toyota in September 2007 asking it to pay for claims in an accident involving a 2005 Toyota Camry. State Farm wrote, “We are aware of several complaints to your company of sudden acceleration involving the Toyota Camry.”

The letter was copied to the National Highway Traffic Safety Administration. The NHTSA replied they had looked into similar complaints, starting in August 2006, and closed the investigation on April 3, 2007. State Farm wasn’t reimbursed.

What if Toyota refuses to pay? Easy, says USA Today: “The cost could trickle down to consumers, who could end up paying higher insurance rates for Toyota vehicles.” This gives the insurers more leverage than the law: Toyotas are cheap to insure at the moment. If it changes, it will hurt sales. Toyota must decide to settle now, or pay later.

Toyota has no comment.

The Nikkei [sub] reports from China that insurance premiums on Toyotas have recently risen by as much as 40 percent. Insurance premiums are going up everywhere in China. No wonder, considering that more than 100,000 die a year on China’s roads, and about half a million are wounded. But Toyota premiums are rising particularly sharply.

Now, read what those premiums are, and cry. The annual premium on a standard 90,000 yuan ($13177) damage policy for a Toyota has risen to  2,000 yuan ($292). Per year.

In related news, Chinese drivers must have followed the Senate hearings closely. Peoples’ Daily reports that Chinese owners of recalled RAV4 feel discriminated. “In the US, the company provides door-to-door service to consumers involved in the recall,” tells the paper to the astonished masses. When drivers bring in recalled vehicles themselves, “the company offers transportation reimbursements and a loaner car of the same model.” No such luck in China. “On some online forums, many RAV4 owners are discussing the possibility of filing a class action suit in China against Toyota,” says Peoples’ Daily. Again, they must have picked-up that term from the press. There is no such thing as a class action suit in China. According to the New York Times, “the ruling Communist Party discourages the filing of lawsuits with multiple plaintiffs, saying that such lawsuits could disrupt social stability.”

The classical class action suit remains a predominantly American phenomenon. Some countries allow groups (comprised of individuals, or certain organizations) to bring suit. Most countries don’t allow class action or mass action suits.

According to Reuters, and as suggested by TTAC,  Toyoda “is likely to undergo intense preparation. Toyota may hire lawyers to drill him with mock questions, one consultant said. A company source said it had not yet been decided whether Toyoda would speak in Japanese or English, but the company has already contacted some translation companies.”

The weekend drill was interrupted by the news that State Farm had informed the NHTSA as early as February 27, 2004, that the insurance company had five claims of unwanted acceleration in the 2002 Lexus ES 300 during the previous 12 months. Reuters broke the story, writing “the insurer said earlier this month it had contacted the National Highway Traffic Safety Administration in late 2007. However, prompted by the public interest in Toyota, the insurer reviewed its records again and has now found that it contacted safety regulators initially in 2004.” All hell broke loose …

Hearing that, the DetN immediately dispatched reporters to the DOT in Washington, where they were told by Transportation Department spokeswoman Olivia Alair on Saturday that NHTSA was already aware of the issue as early as December 2003.

On March 2, 2004, State Farm sent data on 34 more claims to the NHTSA, including 18 on the 2002 Camry and 11 on the 2003 Camry.  Two days later NHTSA opened a formal investigation of alleged unintended acceleration in the 2002-03 Toyota Camry/Solara and Lexus ES 300.

NHTSA closed the probe a few months later on July 22, 2004. “NHTSA dropped its investigation because it didn’t find a safety defect or any evidence of an unreasonable safety risk,” writes the Detroit News. “NHTSA had six separate investigations into sudden acceleration of Toyota vehicles in the last decade — and required Toyota to do little.”

On hearing the news, Akio Toyoda and his advisers were making up their minds whether this was good or bad for Toyota.  Renegade Toyota lawyer Dimitrios Biller talks of a “culture of hypocrisy and corruption” at Toyota. If Biller’s subpoenaed documents contain smoking gun residue, then Toyota will be toast.

However, there is a chance that LaHood will land in the hot seat at the hearings. Former NHTSA Chief  Joan Claybroke had said before that NHTSA “were really lackadaisical in pursuing this case. In fact, they knew about it before 2007, there were six investigations by the agency. They were close because they really didn’t find anything. And I think they didn’t look hard enough.”  She also said “I believe that Toyota did stonewall the NHTSA and the public.”

In an interview with  Good Morning America, LaHood denied his agency had been asleep at the switch. We most likely will hear this sentence again on Wednesday:

“On my watch, I’ve been in this job a little bit over a year, safety has been our number one priority.”

And expect LaHood repeating versions of the following:

“Our safety people have been on 24/7 with these people and really held their feet to the fire. And we will continue to do that. We are not gonna let up. We are not gonna get lackadaisical about this. We will stay on this until every car is safe. They know we are watching them 24/7. We are feeling a strong obligation to the driving public, particularly those consumers who are driving Toyotas to make sure that every car is safe. And we will not rest until that happens.”

Speaking of the Spanish Inquisition, in the 5 minute interview, LaHood repeated four times that his agency is “holding Toyota’s feet to the fire.” He seems to miss the good old days when this wasn’t a figure of speech.

Further insinuating that Toyotas are a road hazard, and that a speech writer is polishing his lines, LaHood repeated at a news conference in Los Angeles: “We at DOT and we at our safety agency will continue to work 24/7 and we will not sleep until every Toyota is safe for every American who owns one.”

When LaHood was asked at the conference whether the government stands to benefit as a GM shareholder from its regulatory crackdown on Toyota, and whether there could be a conflict of interest, LaHood reverted to his own self:  ”That argument is baloney.”

Just as Toyoda’s advisers are working hard to make their boss look good on the hill, LaHood’s writers will have their work cut out before the Transportation Secretary gets in the cross-hairs.

A federally-funded University of Iowa study will pay drivers in major metropolitan areas a total of $895 to allow a GPS/cellular monitor in their vehicle for ten months. If the study concludes that there are few downsides to mileage surveillance, such monitors could become mandatory as part of a per-mile road tax. In theory, constant tracking of every car in America is more practical and politically palatable than simply raising the gas tax. Figure that out. Meanwhile, California is (as usual) the thin end of the wedge. Autoweek reports that the state insurance commission is considering allowing pay-per-mile insurance plans, based on similar technology. Which, according to California’s insurance commissioner, would result in fewer cars on the road. Which would mean even lower gas tax receipts, and a convenient excuse/opportunity to mandate pay-per-mile taxation. Doesn’t the future sound fun?

According to the AP [via Yahoo! News], the diminutive 2008 smart fortwo received an Insurance Institute for Highway Safety (IIHS) rating of "good" in both front- and side-impact testing. It's the IIHS' highest rating. However, the IIHS pointed out that "the front-end test scores can't be compared across weight classes, meaning a small car that earns a good rating isn't considered safer than a large car that did not earn the highest rating." Still, "all things being equal in safety, bigger and heavier is always better," says IIHS president, Adrian Lund. Meanwhile, U.S. government crash tests gave the fortwo five stars in side-crash testing, BUT the driver door unlatched and opened. Government regulators say the incident requires them to note a "safety concern," which will appear on the cars' window stickers. More than 6.1k smart cars have been sold in the U.S. through April 2008. "America has never seen a car this size before and their first question usually isn't about (fuel) economy, it's about safety," says the president of smart USA, Dave Schembri. "And that's why we think these results are so very important." So now you know: the clown car is a safe ride. As long as you stay out of the way of Tahoes and Expeditions.

"Automakers wage war for market share," reads the headline over at China Daily. The current battlefront of that war can be viewed at the 2008 Beijing International Automotive Exhibition, which runs through April 28th. With 890 vehicles on display in the 1.9m square foot arena, the nine-day event is expected to attract more than 600k visitors. The spoils of war can be lucrative, too, with Chinese vehicle sales up 21.4 percent year-over-year, which translates to 2.58m cars sold in the first quarter. Total sales are predicted to surpass the 8.79m units sold in '07 and reach 10m vehicles in 2008. While the suspected recession in the U.S. has tempered car sales here, the prospects in China offer a respite: Ford's Chinese sales have "rocketed" by 47 percent in the first quarter. GM's Rick Wagoner figures China will account for more than 40 percent of global auto sales growth in the coming decade. Meanwhile, Mercedes-Benz launched its C-Class sedans in China last month and Ulrich Walker, the chairman and CEO of Daimler Northeast Asia Ltd., is amazed at China's transformation. In a single generation, a population simply striving to own a "Flying Pigeon" bicycle now strives to own a "big Benz." "In the history of the world, no country has changed as much as China in the past 30 years," says MB's Walker.