To increase consumer adoption of its operator-assisted telematics service, OnStar is working with auto insurance companies to offer its subscribers discounts on their policies.
OnStar's data shows their subscribers are safer drivers and more conscientious on the road. Its service also help insurance companies lower loss and reduce insurance claims, said OnStar spokesperson Jim Kobus. If stolen, a GM vehicle equipped with OnStar has a higher chance of recovery before it ends up in a chop shop, and in the event of an accident, OnStar's operators are automatically alerted and use the car's telematics to help first responders pinpoint the exact location of the vehicle, even if the driver is incapacitated.
"The faster you can get first responders to the scene of an accident, the better off you are in the medical world," Kobus said.
Faster medical response could mean lower hospital bills, and GM is hoping that the insurance companies will pass those savings on to their customers. GM has held discussions with Liberty Mutual and Century 21 to make that happen, according to a Detroit Free Press article. GMAC Insurance already offers OnStar subscribers a discount based on actual mileage driven. In a "pay as you go" approach, twice a year OnStar sends GMAC Insurance the subscriber's vehicle diagnostic report along with the odometer reading. The insurance company will prorate the premium based on the miles you've driven, with discounts starting at 15,000 miles. Kobus' parents in Florida participate in that program, and receive the largest discount of 54 percent since they drive less than 2,500 miles a year
Those savings would more than cover OnStar's subscription cost, which is $199 per year for the "safety and security" package and $299 for "directions and connections," which adds navigation. With the purchase of a new car, OnStar is free for the first year, and 50 percent continue the subscription after the trial period expires.
GM is working to boost awareness and adoption of its telematics and safety service after losing its first mover traction to Ford's Sync product, which launched while GM was struggling for survival during bankruptcy. GM recently announced that it will integrate more social media and entertainment features into the system, and will display the new interface for its 2012 vehicles in about 8 months. The new platform will include tracking technology that may earn families discounts by enabling insurance companies to better profile high risk drivers, such as a male teenager, according to the Detroit Free Press article and charge premiums based on accurate risk exposure. An OnStar iPhone app is available for 2011 GM vehicles which offers remote access to the vehicles in addition to a connection to OnStar outside of the vehicle.