Yes, Geico really is the cheapest car insurance company for most drivers in the United States. Geico is very cheap because it sells insurance directly to consumers and offers a lot of discounts. Direct sales of insurance to the consumer eliminate the cost of middlemen and allow Geico to have far fewer local offices and agents than companies like State Farm and Allstate. Having a smaller agent network reduces Geico's overall expenses so that they can transfer those savings to consumers.
Geico typically has the cheapest car insurance among major domestic providers. However, Progressive, USAA, and Esurance can sometimes beat Geico's low rates. Upon closer inspection, this arrangement appears to be faulty. While it's true that Geico is generally the cheapest domestic provider, the actual premiums on your policies can depend on a wide range of factors.
It's important to remember that there's a clear difference between quoted auto insurance premiums and current or post-renewal auto insurance premiums. In many cases, insurance companies attract new customers by offering surprisingly low rates during the first year of coverage. Once these new policies are renewed, they are often reissued at much higher rates. While AmFam's car insurance rates are slightly more expensive than those at State Farm or Geico, you might pay less overall if you qualify for their many auto insurance discounts.
Geico's telematics application, DriveEasy, automatically detects when you're driving without having to open and close the application while traveling. However, the user agreement does say that Geico can use information from the application as part of the investigation of a claim. Geico, Progressive, USAA and State Farm are some of the cheapest companies that allow you to get quotes and buy a policy online. Geico is first testing the smartphone app in certain markets because telematics programs are still quite new to consumers.
In other words, Geico's advertising campaign is based on its ability to offer its policyholders a middle ground between service and value. Geico rates increase when drivers add more coverage, have an accident, receive a speeding ticket, or file a claim. Geico also offers many discounts to help you lower your rates, including per-use discounts, safe driver discounts, and discounts for combining home and auto insurance. Geico increases premiums as the cost of medical care increases, for example, because it makes bodily injury claims more expensive to pay.
Even if you decide to leave Geico after a bad experience with pricing, you're likely to run into the same problem with your next provider. If you've experienced such an inexplicable premium increase as a Geico customer, you may have been caught off guard. Every insurance company determines its rates differently, so even though Geico is among the cheapest car insurance companies, the best way to ensure you're getting the cheapest rate is to compare quotes from several insurers. Since then, Geico has expanded DiveEasy and its telematics program in 17 states and plans to offer access to more states in the near future.
Leave a Comment