Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 7, 2021

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auto insurance

Wait a minute. What did you say? Yes, you read that right. “Free car insurance from GM.”

The car maker is taking out all of the stops (and barriers) to purchasing one of their new vehicles.

The Who

GM has partnered with Met Life Home and Auto to offer this amazing deal. And while it’s only GM and Met Life at this point, you better believe other auto makers and insurers will jump on board if this turns out to be a moneymaker.

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The Where

First thing first, you must be a resident of Oregon or Washington to qualify for this deal. Apparently, GM isn’t growing as fast as they would like in those states and thinks this is the way to spur on that growth.

The good news is; The automaker is now offering auto insurance in 20 U.S states after starting a test in 2020. GM offers its own auto insurance through OnStar Insurance Services brand.

OnStar insurance monitors the behavior of policyholders to include their driving habits into its insurance rates. Good drivers might get cheaper rates and extra discounts if they show safe driving habits on the road.

The What

So what type of coverage should you expect? No skimming here. The program details they will offer full coverage auto insurance, including comprehensive and collision coverage.

Both are mandatory when you borrow money to purchase a car or lease it (loss payee).

(What is the difference between collision and comprehensive coverage?)

The liability limits have not been specifically identified, though GM noted that the coverage will be higher than the state minimum liability limits.

Currently, Oregon’s state minimum car insurance coverage limit is 25/50/20 and Washington’s is 25/50/10.

Neither is terribly impressive from a coverage standpoint, but that won’t be your problem, since they are going to provide higher coverage limits.

A very cool addition to the coverage on the auto insurance policy policy is a NO DEDUCTIBLE replacement of the vehicle if it is totaled within the first year or 15,000 miles.

Of course, you can decline to opt for the free year of insurance (if you’re nuts).

Remember though, if you’re currently bundled on home and auto, your homeowners insurance premiums may increase significantly if you move the auto policy to another insurer.

The What Not

There are no details, but TTAI would speculate that you’re not going to get free med pay, personal injury protection, auto death indemnity or roadside assistance with this program.

These coverage types are designed for the insured rather than the car itself. GM may only be interested in covering their asset and not you’re [email protected]@!

As discussed above, there may not be an auto insurance deductible for a total loss within the first year or 15,000 miles, but you are likely on the hook for any other physical damage that normally requires a deductible.

Check with the dealer to see what the deductible requirements are as well. The highest possible is $1,000 for comp and collision, so it shouldn’t be any higher than that.

Additionally, there may be restrictions on who qualifies for the program. Having less than perfect credit (insurance score) or a spotty motor vehicle record or insurance claims history may mean you’re denied coverage in the program (although they may still be able to secure financing for you to purchase the vehicle).

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The Why

It should be obvious that GM is making a play to sell more cars by greatly reducing the first year’s cost of ownership.

However, many people find out only after buying their car that they can’t afford the insurance, which leads to repossessions.

No car for their client equals no monthly car payments, so this offer may at least get you into the second year of ownership, which likely increases the odds you’ll pay the car off.

Met Life Home & Auto also stands to make a buck, as a great percentage of auto insurance policies simply renew because we are too busy to deal with insurance or too lazy to shop around and switch insurers to save money.

Additionally, Met Life will certainly get a crack at offering you other insurance products that aren’t free.

Expect to be solicited for home insurance during your free year. Insurers are big on bundling two types of coverage and there is usually a discount associated with purchasing two policies…but does bundling make people happy?

Any Pitfalls?

Not for the first year. Free is “free.” You can’t beat that.

But you will certainly want to take a look at your renewal premium before it’s your turn to take over on the payments.

Getting one year for free does not make up for overpaying for the next five years.

Be sure to get insurance quotes online and/or visit a local independent insurance agent to verify you’re not getting burned on the deal in year two.

Read more: Full coverage vs. liability-only insurance