Why is Geico so cheap? This question is about GEICO

Geico is so cheap because it sells insurance directly to consumers and offers a lot of discounts. Direct-to-consumer insurance sales eliminate the cost of middlemen and allow Geico to have significantly fewer local offices and agents than companies like State Farm and Allstate. Having a smaller agent network lowers Geico’s overhead costs, so they can pass those savings on to consumers. Average Monthly Rates for Geico vs. Top Competitors Company Minimum Coverage Full Coverage Geico $39 per month $163 per month State Farm $60 per month $219 per month Progressive $46 per month $189 per month Note: Premiums are representative of a 45-year-old good driver in California; individual premiums will vary. Every insurance company determines its rates differently, so even though Geico is among the cheapest car insurance companies, the best way to make sure you’re getting the cheapest rate is to compare quotes from multiple insurers. To learn more, check out WalletHub’s review of Geico and see Geico’s full profile.

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Why is Geico so cheap?

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This question is about GEICO

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McKayla Girardin, Car Insurance Writer

@mckayla_girardin • 03/09/23 This answer was first published on 04/22/22 and it was last updated on 03/09/23.For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Geico is so cheap because it sells insurance directly to consumers and offers a lot of discounts. Direct-to-consumer insurance sales eliminate the cost of middlemen and allow Geico to have significantly fewer local offices and agents than companies like State Farm and Allstate. Having a smaller agent network lowers Geico’s overhead costs, so they can pass those savings on to consumers.

Average Monthly Rates for Geico vs. Top Competitors

Company	Minimum Coverage	Full Coverage
Geico	$39 per month	$163 per month
State Farm	$60 per month	$219 per month
Progressive	$46 per month	$189 per month

Note: Premiums are representative of a 45-year-old good driver in California; individual premiums will vary.

Every insurance company determines its rates differently, so even though Geico is among the cheapest car insurance companies, the best way to make sure you’re getting the cheapest rate is to compare quotes from multiple insurers.

To learn more, check out WalletHub’s review of Geico and see Geico’s full profile.

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Steve Murray, Member

@infromix • 09/09/21 This answer was first published on 09/09/21. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Geico is cheap because it saves money by not hiring adequate staff to service its customers. Customers may save money but pay in other ways, such as very long waits on the customer service line, adjusters who don't return calls or texts, etc.

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How can I get cheaper car insurance?

The best way to get cheaper car insurance is to compare quotes from multiple companies and then switch to whichever insurer offers the coverage you want at the cheapest rate. Other ways to get cheaper car insurance include taking advantage of discounts, improving your driving record, and raising your credit score.

10 Ways to Get Cheaper Car Insurance

1. Compare quotes every 6-12 months.

Every car insurance company calculates premiums slightly differently,...

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When do Geico's rates increase?

Geico’s rates increase when drivers add more coverage, get into an accident, receive a speeding ticket, or file a claim. Certain life events, like adding a teenage driver to your policy, can also increase your rates. Plus, it’s possible to lose discounts, which could increase your premium. Your teen might lose a good student discount, for instance, or a speeding ticket could cancel your good driver discount.

Certain large-scale trends contribute to Geico and...

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Does Geico use telematics?

Geico started using telematics to monitor participating customers’ driving habits electronically in 2019, when the company launched its DriveEasy program. Since then, Geico has expanded DiveEasy and its telematics program across 17 states and plans to offer access to more states in the near future.

Geico is testing the smartphone app in certain markets first because telematics programs are still pretty new to consumers. Only 10% to 15% of U.S. drivers had tried one,...

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