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Geico Insurance Agency has become one of the largest car insurance companies in the nation, due primarily to its savvy ad campaign and low prices for the majority of its customers. While some claim that low prices translate into less coverage and customer service, more and more people are finding Geico meets their needs well for all automobile insurance policies.
Who is Geico?
Geico is an acronym for “Government Employees Insurance Company.” Geico began life in 1936 as a company founded by Leo Goodman, a former USAA employee, who had a vision of providing low-cost insurance to employees of the federal government. Goodman believed that federal employees, as a group, were less risky customers than the general population, and he could therefore offer lower premium prices on their car insurance. In 1973, Geico began offering insurance to the general public. In 1996, Geico became a wholly-owned subsidiary of the large Berkshire Hathaway Group. Today, Geico insures over 10 million drivers in the United States, and offers auto, homeowners, and various other types of policies, although its focus is on automobile insurance.
Geico’s claim to fame, touted on its numerous television commercials, is the ability to save its customers “15% or more on car insurance.” While this may not be true for every customer, prices are often lower at Geico than its competitors. Geico is able to keep its prices low due to a variety of factors, and has mastered the “large company” mentality which allows it to serve millions and offer low premium prices.
How does Geico keep prices low?
One way that Geico manages to keep its prices low is its direct customer-to-company relationship. Geico keeps its overhead costs very low, because it does not use “dedicated” agents. In fact, most Geico customers deal directly with the company. While some customers find this lack of personal attention off-putting, most younger customers, which constitute a large percentage of Geico’s base, are able to use the internet to manage accounts, file claims, and deal with the company. For those who prefer the personal touch, Geico offers telephone support and on-site adjustors and other representatives.
This avoidance of the “middleman” is the key to Geico’s low prices. Most agents operate on commissions, which must come from premiums collected from customers. By avoiding commissions, Geico is able to keep its premiums lower than most of its competition. Of course, this also means that you will not receive the personalized attention an agent can provide. Many companies compromise in this regard by using independent agents; some companies even have full-time agents who do nothing but administer their policies. In this regard, the Geico experience may not be as satisfying for the customer as that of other companies, but it is definitely cheaper.
Over 10 Million Drivers Trust Geico
Having over 10 million customers does not hurt in Geico’s quest to keep premiums low, either. It is a fact that larger companies are better able to spread risk over a larger pool of customers, and this translates into lower premiums. Claims can be paid from Geico’s assets without requiring large rate increases. Some smaller companies suffer in this regard, because their asset base is not large enough to withstand a surge in claims activity, and they must raise rates to meet their obligations. This will probably never be a problem for Geico.
Geico also keeps prices low by offering a variety of discounts to its customers. Geico offers discounts for good driving records, driver education courses, defensive driving courses, good student, military or federal government employees, and anti-theft and safety devices. In all, you could save up to 40 percent off the regular price of premiums by utilizing all available discounts.
Geico Customer Discounts
Geico also lowers premiums for its loyal customers. If you stay with the company, you can expect to see discounts at renewal time, especially if you have not had a claim in the past year or so. Some customers receive up to 30 percent off their total insurance bill for switching to Geico, although subsequent discounts tend to be less.
You can also save money if you keep all of your insurance business with Geico. If you insure more than one car, have more than one policy, and bundle your homeowners and other insurance, you may save up to 25 percent off each of your insurance bills. This type of discount is targeted for families, with parents able to save a great deal while insuring teenagers, who are notoriously expensive, and keeping things simple by dealing with one company for car, home, and other insurance policies.
Does Geico sell other insurance products?
Geico has diversified into a variety of types of insurance, as well, although they are still best-known for their car insurance products. Geico offers coverage on collectible cars, motorcycles, marine craft, and recreational vehicles. Geico also offers specialty policies for unique insurance needs, including business policies and umbrella policies.
Geico offers every type of car insurance policy you could need, including liability, comprehensive, PIP, underinsured (uninsured) motorist coverage, collision, medical payments and more. You can also choose from a wide variety of optional add-ons, such as roadside assistance and towing, rental car reimbursement, and gap coverage.
Geico is more famous than you!
Geico’s advertising has contributed to its tremendous growth in the past fifteen years. At least two of Geico’s advertising mascots are in the advertising “Hall of Fame”: the Geico gecko and the Caveman. These fun characters caught the attention of the younger public at a time when Geico was targeting this very group, and represent some of the slickest and best-planned advertising strategies in the history of insurance sales.
All things considered, Geico is a very versatile automobile insurance company, and represents the epitome of a company to change with the times and meet needs which are evolving. Geico’s website is extremely user-friendly, offering online quotes and a variety of customer services such as claims filing and servicing, online help with account management, and tools to do just about anything with your automobile insurance, from adjusting your deductible to paying your bill. If you do not mind Geico’s lack of “hometown” agents, it is likely that this company could be just the right fit for you of price, service, and products.