Direct Car Insurance Companies
As the internet has progressed and infiltrated our lives more and more, direct car insurance companies in nearly every industry have either two choices.
Choice 1- Market their products or services online
Choice 2- get out of the way and watch their competitors dominate.
For several decades, not much changed at the top of the direct auto insurance industry. Two dominant companies secured about 50% of the market in the 1950s, all the way to 2013. They were State Farm Insurance Company and Allstate Insurance Group.
The internet and the insurance
In the mid-1990s as the internet started to become more popular. Smaller yet savvy Insurance companies found an effective way to gain new customers at a very reasonable marketing cost: the internet. The internet did one thing well and fast that shoppers needed – comparison shopping. From the comfort of their home, net surfers could shop at their own convenience without the pressure of pushy sales reps, to find the cheapest direct auto insurance rates. If a company was not actively marketing online, chances are a competitor was there with a sleek website offering cheaper insurance and great online service.
One such firm to immediately embrace the internet was Geico Insurance Company which was founded in 1936 by Leo Goodwin, a former USAA Insurance employee. Although nearly 80 years ago there was no internet, Mr. Goodwin always had a focused, direct sales strategy. His target market was military personnel who were deemed more trustworthy, as demonstrated by the stability of USAA Insurance. Even though the name Geico is referenced to the Government, but in no way, the Government is the owner and also has not any control over this insurance company. The insurer has always been a private company and wisely markets its acronym, which is catchy and easy to remember.
In the mid-1970s Geico, under the leadership of then president David Kreeger, expanded beyond military employees and began marketing to the general public. This was made possible thanks to computer databases of information stored on large servers. All this new technology allowed Geico to assess the risk of insuring drivers and policy pricing. The company went through several ups and downs in the late 1970s and 1980s and changed ownership after a series of financial setbacks.
Warren Buffet buys Direct Insurance company Geico
In 1996, Warrant Buffets conglomerate Berkshire Hathaway purchased the then public Geico and made it a subsidiary. In the following years, Geico has embraced direct auto insurance marketing like no other firm in the world. It’s ironic how an old man, who many considered behind the times in technological circles, had the vision to embrace the internet and take on the giant direct car insurance companies.
Geico, first on the internet
In the late 1990s, Geico continuously refined its online site Geico.com and referenced the companies website in TV and radio commercials. They were the first to embrace the reach of the internet. Also, the gecko and company were way ahead of traditional, agent dependent insurers such as State Farm and Allstate. By 2000, thanks in large part to the aggressive online direct to consumer business model, Geico was a top 4 auto insurer in the United States.
Online Direct Auto Insurance Quotes
The main advantage of having a direct auto insurance model was simply cost savings. Running an online insurance firm is significantly cheaper than the traditional agent-based insurance model with thousands of employees. Geico forged ahead, aggressively in the mid-2000s and became a top three auto insurer by spending massively on internet advertising. As more and more people searched for Insurance directly online, Geico advertised all over the net and captured many of those customers with cheaper quotes. The company seemed to be everywhere: Google, Yahoo and in recent years on video sites.
The company promised to save shoppers 15% or more in just 2 minutes
If they just got a direct auto insurance quote, then they can save 15% or more. By 2013, not only did millions of people get insurance quotes, but Geico surpassed Allstate to become the second largest automobile insurer in the US, with nearly $18 billion in premiums. This achievement can be credited to Geico being a Direct Auto Insurance company. This new technology allows consumers to get quoted and buy a policy all online. In addition, customers can go online to the companies site 24/7 and pay their bill or check a claim status. People love the simplicity, and pricing direct insurers offer. All the old direct car insurance companies have no choice other than to embrace the internet or watch Geico gain more and market share. Perhaps one day soon, Geico might just overtake State Farm and become the largest automobile insurer in the world.
Esurance was born online
Another direct car insurance companies provider who blazed a path early on the internet is Esurance. The company claims it was born on the internet in 1998 for internet users. They boast super easy insurance quotes that only take customers seven and a half minutes to fill out, half the time a Geico quote takes. The company has a super easy to navigate website. Within five minutes you can expect to get an online quote, almost always one of the cheapest rates. Esurance has always maintained a direct auto insurance model. Esurance never sold its policies through agents and brokers. The Esurance online model allows it to save money on business operations. The company focus heavily on Internet-based advertising. Esurance.com has a well-developed website with thousands of pages of content that brings in customers to its website by the thousands every day.
Today, Esurance is a top 5 online insurer and has the financial backing of parent company Farmers Insurance
One of the goals the company has going forward is to embrace homeowners insurance over the web. Esurance estimates that peoples buy directly online only about 3% of home insurance. By offering major discounts and marketing homeowners insurance policies online to its millions of auto insurance customers, Esurance hopes to be a go to insurance site for both auto and home insurance. The company already offers some serious online discounts for shoppers who bundle their home and auto policies together.
The best way to choose from all the direct car insurance companies out there is to get multiple insurance quotes and choose the best price from the company you trust. The entire quoting process should only take you about 10 minutes, and you can expect to save about 40% or more from your current rate. It’s fun to save money, so get your free quote now.