Soon you will be able to use Google not only to find sports records or celebrity news but to buy auto insurance, too. Google has partnered with insurance shopping site CompareNow.com and has been licensed in about half the states to sell insurance. Presumably the service will be comparable to Google’s site in the UK, which offers quotes from 127 insurers.
When Google’s insurance site launches, it may take less than fifteen minutes to save 15% on car insurance. But even Google’s vast Internet reach won’t provide the kind of information consumers should have when shopping for insurance: a real measure of the quality of insurance companies. If you have a claim, who is more likely to pay promptly and fairly, Allstate, State Farm, or Podunk Mutual?
An NAIC committee proposed that companies should be required to report on their claims handling practices just as they are required to report on their financial condition. Among other information, a company would report how long it took for claims to be processed, the proportion of claims closed without payment, and how many policyholders were forced to sue to get what they were owed. But industry opposition prevented enactment of meaningful reform. As a result, many states require companies to report information on claims practices and the NAIC collects the information, but it’s kept secret from consumers.
Auto and homeowners insurance are overwhelmingly sold by price, and Google’s entry into the fray no doubt will further that trend. What consumers are getting for their money, though, is the great unknown of the insurance market.