Google (GOOG) has rolled out an auto insurance comparison service in the U.K. called Google Compare. This service compares rates from over 125 different providers, allowing consumers to choose the policy that fits them best, while saving money at the same time. It appears Google is preparing to enter the U.S. car insurance market by introducing a price comparison tool, according to an analysis by Ellen Carney from Forrester.
It appears Google will roll out their comparison service in California in the first quarter of 2015, before expanding to other states that may include Illinois, Pennsylvania and Texas. If Google is successful in these test markets, they could quickly expand to sell insurance in more markets in the United States as they have already obtained licenses to do business in more than half of the 50 states.
At the same time, speculation has also been growing that Google may take over CoverHound, which already provides the comparison service Google hopes to grow. If this proves to be true, Google could be in the business of auto insurance comparison faster than the current estimated plans. This should be welcome news for most consumers looking to save money on auto insurance.
However, the U.S. version of Google Compare could face headwinds if insurers do not work with Google. Only a small handful of insurers have granted Google authorization to sell insurance policies on their behalf at this time. If the big insurers do not jump on board, the comparison tool may not be seen as robust enough for consumers to make a valid comparison.
Consumers in the U.S. could potentially save hundreds of dollars a year by using Google Compare. Imagine comparing hundreds of car insurance companies by filling out just a few simple questions rather than calling dozens of companies or filling out hundreds of different quote forms.
You may even find quotes from companies you were never aware of prior to the service rolling out. The best rates would be easy to find and the amount of time to find them would be negligible. Of course, a service like Google Compare has its problems, too.
The Downside of Using Google Compare
Google Compare in the U.S. could provide hundreds of quotes, but would consumers make the best choices using this service? Some users will end up choosing the cheapest policy possible without considering the consequences. Cheaper insurers may cut costs when it comes to their claims process or they may not have strong financial ratings. While you could save hundreds of dollars using this service, you may also end up with an auto insurer that you regret choosing.
It should be noted that Google will not be providing this service out of the kindness of their hearts. Instead, Google will likely earn a commission on each policy they sell depending on their arrangement with each individual insurer. This could lead Google to show the results based on how much money they would make off each sale rather than based on which policy is truly best for the consumer.
Finally, relying on Google to provide yet another service in our lives could make some consumers weary. Voluntarily giving Google even more information about us will allow them to target advertising even more precisely, in addition to any commissions Google may earn for selling insurance on the behalf of other companies.
While Google’s entrance to the U.S. auto insurance market has not yet happened, it could be right around the corner. Once the service rolls out nationwide, the auto insurance shopping process could be greatly simplified, while saving consumers a great deal of money at the same time.
[source : dailyfinance.com]