Geico has consistently been one of the low rate leaders when it comes to offering affordable car insurance. The company’s rates most often beat its competitors. One of the primary reasons for this is that Geico is an internet-based digital auto insurance company. It focuses almost 100% on selling its insurance policies directly to consumers through online channel, its website. It does not have actual brick and mortar stores which would increase the company’s overhead. Furthermore, unlike other auto insurance companies, the company does not sell its insurance products through insurance agents. Keep reading to find out why Geico’s rates are so cheap.
Lower Operating Costs
Geico has lower operating costs compared to many of its competitors. This lower operating costs comes from not having to pay for the construction of agent offices and the expenses of their operation, something which adds a significant cost to many of its competitors. Operating primarily on an internet platform is significantly cheaper than operating physical locations. Furthermore, Geico does not employ large numbers of insurance agents to sell their insurance products, unlike their competitors. The company focuses mostly on advertising to draw in consumers who can purchase the company’s insurance over the internet.
Geico Caters To People Who Wish To Control Their Own Insurance Online
Geico offers an easy to use, self-explainable online platform which consumers can navigate without assistance from a Geico agent. A potential policyholder can decide on the auto insurance that he wants and complete his purchase online without ever dealing with a Geico agent or employee. This not only saves the company money which can allow it to offer lower rates, it saves the consumer from having to pay an agent’s commission. Auto insurance agents charge a commission fee for helping you select an auto insurance policy. Thus, forgoing dealing with an agent can save you money.
Additionally, Geico allows consumers to make changes to their insurance and file a claim online without ever having to deal with a Geico employee. This allows Geico to save money that it could have expended paying employees.
Geico Primarily Focuses On Auto insurance
Although Geico sells a variety of different types of insurance, its primary focus and selling point is auto insurance. The company is the second largest auto insurance company in the United States and insures more than 24 million motor vehicles across the country. This type of specialization allows the company to attract consumers and offer lower rates.
More about Geico:
- Geico Insurance Full Review
- Compare Geico, Progressive, and Esurance
- Compare Geico, State Farm, Progressive, and AllState
- Does Geico Cover Rental Cars?
- Does Geico Offer Gap Insurance?
- Geico Pet Insurance Review
The Bottom Line
Geico is able to offer great rates because the company operates primarily over the internet, with no stores and far fewer agents and employees than other auto insurance companies. This means that the company does not skimp on paying its claims; however, it is not the company for you if you desire personal interaction with a human being when handling your auto insurance.