GM Looks to Sweeten OnStar Deal with Expanded Car Insurance Discounts

Handheld OnStar device

(Photo Credit: ©GM)

If negotiations pan out, more policyholders may become eligible for auto insurance discounts for using General Motors’ OnStar safety and security program, according to the Detroit Free Press.

Use of the OnStar system already enables GMAC policyholders in 35 states to benefit from special coverage discounts, and the current talks could lead to the discounts being implemented by Liberty Mutual and 21st Century in some states.

According to GMAC, the diagnostics data collected by OnStar has been used to document how many miles participating users put in behind the wheel, allowing them to get low-mileage discounts on their insurance through pay-as-you-drive programs.

The discounts are tiered to correspond with different levels of totals of miles driven annually, ranging from zero to 15,000 miles per year. According to State Farm insurance, which has launched pilot pay-as-you-drive programs for OnStar users in some states, the national average amount of miles driven per year is 12,000.

In addition, a number of car insurance coverage providers also extend discounts to customers simply for having OnStar installed in their vehicles.

Maintaining the system costs users upwards of $200 a year.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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