General Motors plans to launch an algorithm-based auto insurance plan by the end of Q1 2022 in select US states, Reuters reports. The insurance plan will charge policyholders based on their driving performance according to a company executive interviewed by Reuters.
GM’s subsidiary, OnStar, has asked for regulatory approval for the new insurance plan in Arizona, Illinois, and Michigan along with its insurance partner, American Family. Andrew Rose, president of OnStar Insurance and GM’s vice president of Global Innovation, told Reuters that the company hopes to receive the green light by the end of March.
“We hope to follow that with a dozen, two dozen, and hopefully more states.”
Currently, GM’s policy doesn’t include the use of driver-assistance systems. Rose also said that sensor data from GM’s Super Cruise system could factor into rate setting in later versions of the insurance plan but didn’t provide a timeline as to when this could take place. He did share, however, how excited he was and how it could add value to the insurance sector.
“I’m very excited about what we have in the market and its ability for us to show benefit to the insurance equation.”
I think that this is a good move for GM, but some will probably think that GM is the first to start implementing data-based insurance. When Tesla announced its intention to launch data-based insurance, it was as a response to the high cost of insurance for electric vehicles and inadequate accounting for Tesla vehicles’ superior safety.
During Tesla’s Q2 2020 earnings call, Tesla CFO Zach Kirkhorn said:
“Where we want to get to with Tesla Insurance is to be able to use the data that’s captured in the car, in the driving profile of the person in the car to be able to assess correlations and probabilities of crash and be able then to assess a premium on a monthly basis for that customer. And what makes this very exciting for us is the amount of data that is available with the customer’s permission to use is not available on any other product or any other vehicle in the world.
“So this gives us a unique advantage in terms of information. And we have a decision point here where we could take the California product and replicate that into other states or we could delay going into additional states and instead put more effort into the Telematics side of this, and we chose the latter.”
I bring this up because GM’s move is great for GM, and hopefully GM will be able to achieve for its customer what Tesla is doing for its own. GM is following Tesla’s lead here and this isn’t the first time automakers are following Tesla’s lead. It’s not a bad thing, actually, but I think Tesla’s critics need to be reminded of the good things that Tesla is achieving and stop overlooking the achievements while praising others for following. That’s just my opinion and you are welcome to hold a different one.
Overall, I think that detailed algorithm-based insurance will be key in bringing about fairness in the insurance industry. If automakers were to launch their own algorithm-based insurance, it would force the evolution of the insurance sector while bringing competitive fairness. And perhaps Louisiana, which has the highest premiums in the nation, would benefit from fairness.
Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Electrifying Industrial Heat for Steel, Cement, & More
I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...