OnStar Insurance Could Save GM Vehicle Owners Money—If They Drive Nicely
Auto insurance in the 21st century is a little more complicated than it was a few decades ago. More technology in cars means more potential repair costs to factor in, but it also gives insurers the flexibility to tailor premium rates to each individual driver, as long as you let them get into your car to look through. over your shoulder. Companies like Progressive and State Farm have been offering services that monitor your driving habits and reward good behavior for years, and now General Motors is looking to get into the telematics insurance game with OnStar Insurance.
Unlike other services that rely on external devices that plug into or connect to your car’s on-board diagnostic (OBD-II) port via Bluetooth, OnStar Insurance uses the systems already built into every GM vehicle. OnStar Insurance extracts the data from the car and passes it on to one of its carrier partners so they can adjust your rates based on your safety and ability to drive. So, at least for now, OnStar is acting as a middleman between you and the insurer itself, leveraging GM’s real-time telematics to deliver safer bets to insurance companies and potentially lower rates. for drivers. State Farm is already using OnStar for its Drive Safe & Save program, and this will likely continue under OnStar Insurance.
GM is not the first automaker to offer its own insurance program. Late last year, Tesla launched Tesla Insurance, a service to lower the prices of Tesla electric vehicles, which historically have charged higher premiums than other cars. Although CEO Elon Musk initially promised to use data from Tesla’s robust on-board diagnostics and telematics systems to offer discounts on safe driving, that has yet to happen. The program is also currently limited to drivers in California. Likewise, OnStar Insurance will first launch in Arizona, offered exclusively to GM employees until it opens to the general public in early 2021.
The modern auto insurance landscape is changing rapidly and it will only get more complicated as cars evolve towards constant connectivity and full range. But as long as you are a safe driver, you can benefit from having Big Brother watching you. If you are driving like a tool, however, it certainly won’t get in your way.
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