Walmart Begins Selling Auto Insurance Online

Walmart has partnered with AutoInsurance.com to offer car insurance to its customers at “everyday low prices.”

The new arrangement provides an auto insurance comparison service through the AutoInsurance.com website from national insurance carriers that include Progressive, Esurance, Safeco, Travelers, and 21st Century.

Walmart said it will direct customers to the website through its own website and in stores but will not sell the insurance directly.

Walmart customers using AutoInsurance.com, which is operated by Fort Lee, N.J.-based licensed property/casualty insurance agency Tranzutary Insurance Solutions, will see multiple quotes from each of the carriers.

The offerings are currently available in only eight states – Arkansas, Louisiana, Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee, and Texas – but the companies said they have plans to expand nationwide and also add more carriers.

Daniel Eckert, senior vice president of services for Walmart U.S., says the retailer began looking into areas where it could bring its “everyday low prices” and where customers are looking to save money about two and a half years ago. The firm said its studies showed that auto insurance was one area where customers expressed frustration.

“Insurance is one of our consumers’ biggest monthly expenses and many feel they are overpaying for the insurance they have and don’t know if they are getting the best coverage and the coverage they need,” he says. “We thought we could bring something to life in both of these arenas.”

The Walmart deal follows the announcement earlier this month that online discount retailer Overstock.com is also starting to sell insurance on its website (see page 11).

Prior to this launch, Walmart piloted a single insurance carrier option in stores in Georgia and South Carolina and an aggregator model with multiple carriers in Pennsylvania. Walmart also experimented with offering Esurance auto insurance discount cards to consumers at kiosks in Illinois.

“We wanted to get a sense of if we were hitting the mark with customers and find out what is the best approach,” says Eckert.

Eckert and Joshua Kazam, founder of AutoInsurance.com, say that both single carrier and aggregator pilots were successful. The annual savings reported by customers in Pennsylvania was $1,168 on average.

Kazam says AutoInsurance.com was already established and in the insurance business but the partnership with Walmart led to a rebuilding of AutoInsurance.com into a website where consumers can shop and compare.

“We really worked diligently to be able to take online shopping to a new level and directly integrated with carriers,” he says. “The website allows consumers to compare apples to apples and makes insurance coverage shopping very easy to understand.”

Walmart will receive monthly fees for marketing the service in its stores and will also promote it on its own website, according to Eckert. Customers can access the AutoInsurance.com site through Walmart.com.

Kazam says they wanted to make the experience for consumers as easy and unique as possible. The site is able to pre-populate information fields by accessing consumers’ existing policies and directly integrates with carriers to facilitate quoting.

AutoInsurance.com says it retains all of the customer information and does not distribute it to the carriers until a consumer goes through with policy purchasing and binding.

AutoInsurance.com agents are also available to provide advice or assist consumers through the buying process.

As of now, the two companies plan to only work with auto insurance and no other lines.

Eckert says the cost savings through this new partnership are compelling to Walmart’s large customer base.

“One of the things we were most struck by was the power of comparison. In our year-long [pilot] people saw savings of $1,100 a year – that’s a lot of money for customers,” he says. “The savings are real and the comparison model offers the best choice for customers.”

Walmart’s decision to market auto insurance through its partnership with AutoInsurance.com ruffled the feathers of many InsuranceJournal.com readers. Many felt the low-priced policies would mean insufficient limits and coverage. However, a few readers believe this is the direction personal lines insurance is going:

Roger says: I call this rod and reel marketing. They throw out the bait (low premiums) and reel you in. Then in court you lose your assets because they low balled your coverage. Once again proving that they are baiting you. A professional agent is going to explain the various limits of liability and uninsured motorist. State minimum liability limits are a joke and these guys over the internet don’t care what happens when you have a claim. Find a “Trusted Choice” agent and you can sleep at night, knowing you choose not to roll the dice with your families’ assets. Auto, home, umbrella with one company will best protect your future. Plus, you can walk into an agent’s office and talk to them face to face, about whatever is on your mind. Hooks are sharp and they can hurt very bad.

buckeye ins agent says: This comment is for the agents – don’t laugh this is scary stuff. The lizard was considered a low-end company for a long time. I see them in a lot of quality households now with higher limits coverage at half or less of what most carriers are selling it for. Their claims service is getting good marks too so you can’t pick on them for that either. This is a legit threat to the agency model as we know it. The carriers need to get more aggressive and the agents need to step up their game or sell the agency.

ExciteBiker says: Will independent agents continue to sell Safeco and Travelers products, or will they refuse to do business with carriers that are apparently seeking to undermine the independent agency system and turn insurance into a commodity available at Walmart?

I wonder what these carriers are telling their agents… “blah, blah, blah, increasing our brand awareness, blah, blah, blah…” Sound about right?

Sarah says: This has been coming for decades now. Let’s look at banks in the insurance business, Warren Buffet and Geico, now a new company says they can steal your business in 7-1/2 minutes vs. Geico’s 15 minutes. If you want to see what is happening in the future look to what Walgreens, CVS, and Walmart have done to prescription shops/drug stores across the country. Or Expedia, Priceline has done to travel agencies? Almost all of the personal lines insurance products sold in this country will be sold online within the next 10 to 15 years. Commercial lines and specialty lines will be the only product we will be selling 15 years from now.