How’s this for a little added incentive? In the hopes of attracting more consumers, OnStar is teaming up with auto insurance companies to offer subscribers discounts on their car policies.
Going in their favor is the fact that OnStar’s subscribers are safer drivers and more conscientious on the road. Also in the pro column is that its service helps insurance companies lower loss and reduce insurance claims, as GM vehicles that come with OnStar have a higher chance of recovery. And in case of an accident, OnStar’s operators are automatically alerted and help first responders pinpoint the exact location of the vehicle.
So how does faster response time benefit insurance companies? The faster medical response could equal lower hospital bills, and in a perfect world, the insurance companies will pass those savings on to their customers. GM has already had a few discussions with Liberty Mutual and Century 21, and GMAC Insurance already offers OnStar subscribers a discount based on actual mileage driven. With this program, a kind of “pay as you go” system, OnStar sends GMAC Insurance the subscriber’s vehicle diagnostic report along with the odometer reading twice a year. The insurance company would prorate the premium based on the miles you’ve driven, with discounts starting at 15,000 miles.
When you think about it, the savings from this type of plan would cover OnStar’s subscription cost – it’s $199 per year for the “safety and security” package and $299 for “directions and connections,” along with navigation. And when you buy a new GM vehicle, OnStar is free for the first year, and about 50 percent of these purchasers continue the subscription after the trial period expires.