Stellantis Plans to Offer Usage-Based Car Insurance

The automaker also hopes to develop software that will produce subscription revenue

James R. Hood
James R. Hood

Automaker Stellantis is the latest to say it plans to get into per-mile auto insurance in the U.S., a potential boon for consumers who don't drive much.

Stellantis launched an insurance program in France earlier this month, offering rates based on driver behavior, as measured via online data sharing. It said the offer will be extended in 2022 to Europe and North America.

It's one of a bundle of new services being contemplated by the world's fourth-largest car maker, which makes everything from Jeeps to Alfa Romeos. It also plans to plunge into "connected car services," including software that learns a customer's tastes and acts accordingly.

Stellantis didn't provide much information about its insurance plans, devoting most of a press release to its "electrification and software strategies" that it says will "seamlessly integrate with customers' digital lives."

Presumably, the software services would include tracking information about customers' driving habits to help determine their insurance rate. MetroMile and other insurers already do this with a small device that plugs into the diagnostic port found on all current model cars.

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$22 billion in new revenue?

As examples of the digital services, Stellantis cited a program that would close your garage door if you forgot to do so. Another might learn what music you like and play it automatically.

None of this sounds too earth-shattering but Stellantis says it will produce about $22 billion by 2030. The idea is that the software services will be so compelling that car owners will subscribe and pay a monthly or annual fee.

Just what would these software services be? Stellantis listed five "pillars" in its news release:

• Services and Subscriptions

• Features On Demand

• Data as a Service and Fleet Services

• Vehicle Pricing and Resale Value

• Conquests, Service Retention and Cross-Selling

Also, cars will be "fully over-the-air updatable" by 2024, Stellantis said.

The company was formed earlier this year through the merger of Fiat Chrysler Automobiles NV and France’s PSA Group. It makes 14 brands of cars and trucks.

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James R. Hood

Jim is a publishing entrepreneur and journalist. He founded ConsumerAffairs in 1998 and earlier was the founder of Zapnews, after holding executive posts at the Associated Press.