GEICO is cheap because it sells insurance directly to consumers and offers a lot of discounts. GEICO is not the cheapest insurer out there, though. For example, GEICO ranks 21st for the cheapest car insurance among 46 major companies, based on WalletHub’s 2019 GEICO car insurance review. Competitors like Esurance and Progressive are actually a bit cheaper overall.
Still, GEICO is pretty cheap relative to many other major insurance providers, and there are good reasons for that.
GEICO is cheap for many consumers because it offers a wider variety of discounts than many major providers. There are GEICO discounts Most consumers qualify for more than one discount, which helps to lower the overall cost of their premiums.
The fact that it sells insurance directly to consumers is another big reason why GEICO is so cheap. This eliminates the cost of middlemen. GEICO has significantly fewer local offices and agents than companies like State Farm and Allstate, limiting agents to high-population areas only. Having a smaller agent network gives GEICO savings it can pass on to its policyholders.
GEICO started with direct phone sales but has grown rapidly in the 21st century by developing easy-to-use sales technology. In fact, GEICO focuses today on keeping their rates low by investing in, and beating the competition in, technology that helps reduce manhours, minimize their cost of selling and increase convenience to consumers. Today, you can use GEICO’s advanced website or mobile app to easily find information on insurance or get a personalized quote. You also can check rates and get help with coverage and discount decisions on GEICO’s apps for Amazon Alexa and Google Home.
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