Auto Insurance From Google?

Search Engine giant Google could soon be making an impact in a new industry. The California-based company will reportedly enter the U.S. auto insurance market. Reuters is reporting that Google has designed a website that will allow auto insurance shoppers to compare insurance options and ultimately purchase a policy.

A report from the New York Times notes that Google is currently licensed to sell insurance in more that 50 percent of the states in the U.S. That includes states with large populations such as California, Texas and New York. Google has recently partnered with Compare.com, an online insurance marketplace website which offers insurance deals in a manner similar to how kayak.com offers travel deals.

Reports indicate that Google has been pitching their auto insurance website idea to auto insurers for over two years. Speculation is also growing that Google has acquired CoverHound, an insurance carrier with a headquarters in San Francisco… not far from that of Google. The thought is that Google is simply trying out the insurance industry to see how they like it. The partnership with Compare as well as the possible purchase of CoverHound could put Google in a position to get further involved in auto insurance should the initial experiment farewell.

Google isn’t the first gigantic non-insurance or automotive company to get involved in auto insurance. WalMart, the mega retail chain, has also ventured into this realm. We reported previously that WalMart had offered auto insurance through partnerships on their website. WalMart has partnered with autoinsurance.com. The current auto insurance offering on their site now appears to be more advanced than the initial version. WalMart has clearly made progress on their venture into auto insurance. The question is, how Google could be different. Why should it matter that Google is involved in auto insurance in the first place? Is it beyond the fact that nearly everything that Google does can prove fascinating?

It is significant that Google wants to be a part, at least a small part, of the auto insurance industry. For one thing, Google is the digital marketing gatekeeper. They rule search on the Internet. They create the rules by which companies that say they can help improve the search rankings of an organization. Google likely isn’t going to give their partners or ventures higher rankings; they will be fair and play by the same rules as everyone else. However, the search engine company is still a powerful business partner. They would add instant credibility to Compare and CoverHound. That boost in credibility impacts their competitors and naturally the auto insurance market.

What if Google is so successful that they decide to have their own insurance agency? Could consumers turn to Google Auto Insurance in the future? What if Google offered better rates or had tie-ins with their other products that made them unbeatable? If Google Insurance is created as a stand-alone product in the future could it be used in conjunction with in-car infotainment?

We told you previously that Android Auto is being released in the near future. Compatible vehicles will grow sharply in number this year and next. Could Google one day integrate auto insurance into their smartphone-based infotainment system? Perhaps motorists could receive lower rates for better driving habits in real time? We already know OnStar and Progressive Insurance are partnering for a similar venture, why wouldn’t Google give it shot? What Google will do is a matter of speculation, however, their initial decision to be part of the auto insurance industry in some form is a story to keep an eye on.

Do you think that Google will ever form an auto insurance company? What is it about Google that makes them a wise business partner to have? How closely do you monitor significant changes in the auto insurance market?