Car insurance in the 21st Century is a bit more complicated than it was a few short decades ago. More technology in cars means more potential repair costs to consider, but it also gives insurance carriers the ability to tailor premium rates to each individual driver—as long as you let them into your car to look over your shoulder. Companies like Progressive and State Farm have offered services that monitor your driving habits and reward good behavior for years, and now General Motors is looking to get into the telematics-based insurance game with OnStar Insurance.
Unlike other services that rely on external devices that plug into your car’s onboard diagnostics (OBD-II) port or connect to it via Bluetooth, OnStar Insurance uses the systems already built into every GM vehicle. OnStar Insurance pulls data from the car and relays it to one of its carrier partners so they can adjust your rates based on how safely and how much you drive. So at least for now, OnStar acts as a middleman between you and the actual insurer, leveraging GM’s real-time telematics to bring safer bets to insurance companies and potentially lower rates for drivers. State Farm already uses OnStar for its Drive Safe & Save program, and that will likely continue under OnStar Insurance.
GM isn’t the first automaker to offer its own insurance program. Late last year Tesla launched Tesla Insurance, a service intended to lower rates for Tesla EVs, which historically have commanded higher premiums than other cars. Though CEO Elon Musk initially promised to use data from Tesla’s robust onboard diagnostics and telematics systems to offer safe driving discounts, that hasn’t happened yet. The program is also currently limited to drivers in California. Similarly, OnStar Insurance will launch first in Arizona, offered exclusively to GM employees until opening to the general public in early 2021.
The modern car insurance landscape is changing rapidly, and it’s only going to get more complicated as cars move toward constant connectivity and full autonomy. But as long as you’re a safe driver, you can benefit from Big Brother watching you. If you drive like a tool, though, he’ll definitely narc on you.