Google Begins Offering Auto Insurance Quotes in California`
Drivers in California will soon have a new – but familiar – way to shop online for car insurance. Google announced it will offer auto insurance quotes through its Google Compare service.
In a move that has the auto insurance industry divided, Google Compare partnered with Compare.com and CoverHound to provide quotes from multiple insurance carriers within the state of California. At this time, MetLife Auto & Home and Mercury Insurance are two of the bigger carriers that signed on to participate in the project.
How it Works
Consumers in the market for new auto policies simply enter basic information into the search engine, such as their zip code and details about their vehicle. The site then provides a listing of options for comparison. Insurance carriers may note what makes them unique alongside their quote.
None of the big four insurance carriers – GEICO, State Farm, Progressive, and Allstate — have agreed to participate in the Google Compare site to date. It appears these carriers feel there isn’t enough of an opportunity to highlight what sets them apart from other carriers in this search process.
If consumers are pleased with the information provided and quote presented, they can purchase directly from the Google Compare page. For the carriers who have signed on for the project – many of which are local carriers – this is a positive move.
“We’re always looking for opportunities to use new technology to enhance the customer experience, Kishore Ponnavolu, Executive Vice President at MetLife Auto & Home, said. “Partnering with Google Compare allows us to bring our unique group pricing and benefits to a wider range of customers, while creating an easier shopping experience.”
While not saying so directly, other carriers may disagree on the benefits as many already have an online presence that allows for consumers to get quotes. If consumers purchase policies through a Google Compare quote rather than through an insurer’s own website, the carrier owes Google Compare a percentage of the purchase fee. Many companies prefer to keep those funds in-house.
Google says the size of the commissions it receives will not influence how the quotes are ranked in the listings consumers receive.
Some in the industry are also concerned about how this move will affect independent insurance agents. By allowing for consumers to procure quotes online and call carriers directly, there may be less of a need for agents to facilitate the process.
“I know these comparison shopping sites seem to be all the rage, but if you look at their production—the number of policies they’re actually issuing—it’s miniscule,” Brian Cohen of Altamont Capital Partners said.
Speaking on behalf of the National Association of Professional Insurance Agents, he said, “What’s happening is that individuals are visiting these sites to get a sense of a reasonable price, but they still want to go to a professional to figure out what’s best for them.”
There is also speculation that Google is using this service to collect data from the various carriers on how they assess risks and set rates for their underwriting of policies.
“If you think about what’s going on with self-driving cars in the future, Google is really going to have to understand how insurance companies price risk because the whole model is going to change,” Forrester Research analyst Ellen Carney said.
Whether this move on the part of Google is simply another way Google is making life easier for the consumer or whether it is a more calculated move to gather data in anticipation of another strategic plan remains to be seen. Until the end result is known, industry insiders will certainly be paying close attention to how Google Compare works with the auto carriers and how this new venture succeeds.