Google can now help you buy the best car insurance
Google Compare for Auto launched on Thursday, pushing the tech company further into realms that extend the power of its search engine.
Airline and retail price comparisons were only the beginning for Google's shopping tools. The tech giant launched “Google Compare for Auto Insurance” on Thursday, delving into yet another realm of the consumer world through its near-ubiquitous search engine.
Google Compare for Auto Insurance will work similarly to its credit card comparison tools. You type in your ZIP code, vehicle info, and coverage details, then Google will show you an array of options from one of its 14 partners. If you see a quote you like, you can buy it on the spot, or get contact information to talk further with an insurance company.
Google says that the algorithm is based on a flexible cost-per-acquisition (CPA) model and payment isn’t a factor in ranking quotes. Right now, it is only operating in California, but Google says it will expand to other states soon.
The release of Google Compare for Auto confirms recent rumors that Google was set to jump into auto insurance. Google has offered auto insurance and mortgage comparisons through its Google Compare website in the UK since 2012. On Wednesday, Forrester's Ellen Carney noted in a blog post that “Google Compare” was registered for business in 26 states across the US, and Google authorized San Francisco-based car insurance comparison start-up CoverHound to operate on its behalf.
What are the implications of Google's growing status as a middleman for insurance, credit cards, shopping, and the like? The Wall Street Journal's Rolfe Winkler points out that Google can make revenue off these transactions, but may rock relations with established middlemen, such as Priceline and Expedia, both of whom are big Google advertisers.
Some major insurers are also noticeably not on board, such as Progressive, AllState, and GEICO. By partnering with Google, they could be giving the tech company information that could be later used to Google’s advantage if the company extends beyond being the middleman and starts to offer its own insurance.
Why is Google hopping in the car insurance business now? Some say it’s a ploy to gain more information for its self-driving car business.
“If you think about what’s going on with self-driving cars in the future, Google is really going to have to understand how insurance companies price risk because the whole model is going to change,” adds Ms. Carney. “And I imagine that some component of insurance is going to be included with the car.”