GM OnStar Insurance: Cost and How it Works

GM OnStar Insurance: Cost and How it Works

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General Motors (GM) offers its own auto insurance through its OnStar services brand. OnStar Insurance monitors the behavior of its policyholders in order to factor driving behavior into its rates. Good drivers may see cheaper rates and extra opportunities for discounts if they demonstrate safe habits on the road.

While drivers of any vehicle can sign up for OnStar Insurance, only owners of GM vehicles that were manufactured in 2015 or later and that have OnStar capabilities can qualify for the insurer's driving discounts. Drivers who don't own eligible vehicles may see higher costs of car insurance.

How does OnStar Insurance work?

OnStar Insurance uses data it collects on its policyholders to monitor drivers and set rates that reflect their behavior.

OnStar Insurance is one of the latest versions of usage-based car insurance, so it sets rates in response to the individual behaviors of policyholders. Generally, OnStar Insurance will track its policyholders' habits and determine the cost of its auto insurance accordingly. For example, drivers who brake too suddenly or who speed often could see more expensive premiums than others.

Unlike Tesla's insurance, which is available in California only to owners of the maker's vehicles, OnStar Insurance is available to all drivers — even those without OnStar-capable cars. At the same time, certain discounts that come with OnStar Insurance are only open to those with newer GM vehicles that are outfitted with OnStar systems.

Homeowners can also purchase insurance with OnStar. The insurer's homeowners and auto insurance policies are underwritten by subsidiaries of American Family Insurance. This means that policyholders will work with American Family if they file claims after a loss. Additionally, OnStar's partnership with American Family signals financial stability to policyholders wary of signing up with a new company.

Where is OnStar Insurance available?

Currently, drivers can only sign up for OnStar Insurance in Arizona, but the insurer plans to expand to other states by the end of this year and through 2021. According to the insurer's website, discounts won't be available right away in California, New York or North Carolina following its expansion into those markets.

How much does OnStar Insurance cost?

OnStar Insurance may be much more expensive than its competitors for drivers who don't qualify for any discounts.

Upon comparing the costs of car insurance for a driver of a Chevrolet Equinox with OnStar and a few of its largest competitors, ValuePenguin found OnStar Insurance was usually one of the most expensive options for full and minimum coverage.

In Phoenix, OnStar Insurance offered the most expensive car insurance. For minimum coverage, it was over $1,000 more expensive per year — for the same vehicle — than Farmers. While OnStar estimates that its customers could see up to a 20% reduction on their car insurance policies by signing up for coverage, this discount wouldn't improve the company's ranking.

Insurance provider
Annual cost
Six-month cost
State Farm$1,540$770
OnStar Insurance$2,938$1,469

Rates are for a 2018 Chevy Equinox.

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Similarly, for full coverage auto insurance, which includes liability coverage as well as comprehensive and collision protection, OnStar Insurance remains expensive. In fact, the annual cost of coverage was more than $5,000 per year for the profile we checked with no discounts applied.

Insurance provider
Annual cost
Six-month cost
State Farm$3,314$1,657
OnStar Insurance$5,176$2,588

Rates are for a 2018 Chevy Equinox.

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Unlike the company's car insurance, the homeowners coverage from OnStar Insurance was much cheaper than its competitors. While cheap, a standard homeowners insurance policy from OnStar Insurance comes with dwelling, content, liability and loss of use coverages — though users can adjust each of these coverages only limitedly.

Insurance provider
Annual cost
OnStar Insurance$1,015
State Farm$1,183
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Does the cost of OnStar Insurance depend on make and model?

There was some variation in the cost of OnStar Insurance depending on the make and model of the insured vehicle. ValuePenguin compared the cost of three SUV models from GM, along with one from Honda, a non-GM car that wouldn't be eligible for further discounts.

The Honda CR-V was actually the second cheapest option for full coverage, beating out the Buick Enclave and GMC Terrain. The average price for all the SUVs we compared was $5,081 for an annual policy, which is still much more expensive than the average cost of coverage.

Annual cost
Six-month cost
Chevy Equinox$4,911$2,456
Honda CRV$4,946$2,473
Buick Enclave$5,193$2,596
GMC Terrain$5,280$2,640

Rates are from Phoenix.

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OnStar Insurance discounts

OnStar Insurance offers discounts for good driving to its policyholders. However, only those with GM-brand models from 2015 or later can qualify for these savings. This is because, as a usage-based insurance provider, OnStar Insurance requires policyholders to carry its data-collection software to observe their driving habits in order to qualify for certain discounts. Drivers with eligible OnStar systems in their vehicles could save by driving fewer miles and showing attributes of a good driver.

Those without access to an OnStar system could save on their car insurance by bundling a home and auto insurance policy from the company. ValuePenguin estimates that bundling could save users several hundred dollars per year depending on the limits one selects. Drivers may also see premium reductions — even if they don't have an OnStar system — if they:

  • Have a four-year degree
  • Maintain a high grade point average
  • Enroll in paperless billing
  • Elect to pay their bills automatically


ValuePenguin collected car insurance quotes for drivers in Phoenix — the largest metropolitan area in OnStar Insurance's market as of November 2020. In addition to the rates we gathered from OnStar Insurance, we also got quotes from State Farm, USAA, Progressive, Geico, Farmers and Allstate. Unless stated otherwise, we used the 2018 Chevrolet Equinox as a sample vehicle, as the Equinox is one of GM's best-selling models.

Our sample profile had the characteristics of a 30-year-old male driver from Phoenix with no previous history of insurance. To assess the insurer's base quotes, we didn't apply any of the discounts that OnStar advertises as cost-saving opportunities — like good student, defensive driver and paperless billing.

We also collected homeowners insurance rates for a home in Phoenix. The home we used had 1,390 square feet and was built in 1982. The rates in this piece reflect $182,000 of dwelling coverage and $300,000 of liability coverage.

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

Andrew Hurst

Andrew Hurst is a Data Writer at ValuePenguin who reports on insurance. His analysis has been featured in Forbes, MSN, USA News and Fox News, among others. He's also appeared in interviews broadcast by ABC and the CW. He previously taught composition and research at Wright State University.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.