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Google Moving into Auto Insurance (US)


JEast
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In UK, Admiral Group made a success out of confused.com.  So ther is precedents for online players break onto the scene.  But Geico and Progressive are both well run companies, and are both very good at interfacing with customers online.  And you also have the traditional agency net works that seem to retain the premium clients very well.  It's an interesting race to watch.

 

 

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Well yes... you and I wouldn't want to compete with them but they're not trying to compete with you and I. They want to compete with Geico and StateFarm. The history of capitalism is littered with cautionary tales of smart ppl who were good at something and then thought they were good at everything.

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Well yes... you and I wouldn't want to compete with them but they're not trying to compete with you and I. They want to compete with Geico and StateFarm. The history of capitalism is littered with cautionary tales of smart ppl who were good at something and then thought they were good at everything.

 

It's also littered with Kodaks etc.

 

The thing about software and scalability though is that they can use it to throw mud at the wall and see what sticks - all for a relatively low cost - and using their instant ubiquity to get in front of everyone's eyes. At the very least they could do a lot of damage to the old guys.

 

It's not like products like coke where Buffett has said the distribution system is near irreproducible...

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Guest Schwab711

Does anyone else get the feeling that these guys believe that just because they're a bunch of really smart people there's nothing they can do?

 

Yes. But I also wouldn't want to compete with a bunch of really smart people with borderline-unlimited capital...

 

2nd part of that sentence is so scary because of the first part (which is broadly knowledgeable by the way)!

 

 

Also, I never thought about it this way but Google does get a lot of free advertising because of who they are and the combination of instant and vast networking allowing that message to be spread quickly if it's a good idea. This is a huge advantage that really supports the idea of a consistent stream of new ideas with that hopes that they can find some diamonds at a tremendous discount to outside money. All while securing their internal moat with an increasingly 'intelligent' work-force! Google may be on to something the market doesn't appreciate.

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So far they have managed to steer clear of the monopoly argument, and avoid the attention of the feds. It is not entirely clear to me that this will be the case permanently. Were it not for the justice dept. case squashing microsoft's ambitions, i'm not entirely sure google would be where it is today.

They have what like 70% of the search market? Where else is there that level of market concentration, and if they start to leverage that into other areas, it may not be long before they get the attention of DC.

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Bound and determined to find way to piss away their S/H capital, I mean grow into new areas.  Awesome thing is dual voting structure means its even easier for them to tell outside S/H to go get stuffed.

+1

Yes it's easy to say let's piss away some capital I have plenty anyway. You do that enough times and you won't have that much anymore. The dual voting structure comes back to their attitude that shareholders aren't smart enough to understand the amazing stuff they are doing and they're gonna hurt themselves by voting on stuff they don't understand.

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Bound and determined to find way to piss away their S/H capital, I mean grow into new areas.  Awesome thing is dual voting structure means its even easier for them to tell outside S/H to go get stuffed.

 

I thought this board loved owner operators...  ::)  ;)

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Hey all:

 

Google moving into auto insurance in MI would be a good thing!

 

The state of MI is breaking down in so many ways...Auto insurance is one of them.

 

I went to buy a low end SUV.  Negotiated the deal, and was set to sign & pick up the next AM.  JUST HAD TO GET INSURANCE.

 

I have a perfect driving record.  I am in my 40's.  I DO NOT LIVE IN DETROIT!  I live near it though...

 

Insurance was over $400/month.  That was with a $500 deductible.

 

I thought it was a mis-quote.  The insurance agent explained it was not.  If I had tickets, OR lived in Detroit, insurance would be substantially more.

 

I went to several other agencies, but the lowest was $380/month.  In the end, I did not buy a new vehicle. 

 

No wonder a lot of people in Detroit Michigan can't afford to drive.  Auto insurance is simply too much. 

 

 

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Bound and determined to find way to piss away their S/H capital, I mean grow into new areas.  Awesome thing is dual voting structure means its even easier for them to tell outside S/H to go get stuffed.

 

I thought this board loved owner operators...  ::)  ;)

I really like to partner up with owner operators. I get serious doubts when those guys tell me that I can't have the same standing as they do. Why exactly does their capital have more rights than mine?

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Hey all:

 

Google moving into auto insurance in MI would be a good thing!

 

The state of MI is breaking down in so many ways...Auto insurance is one of them.

 

I went to buy a low end SUV.  Negotiated the deal, and was set to sign & pick up the next AM.  JUST HAD TO GET INSURANCE.

 

I have a perfect driving record.  I am in my 40's.  I DO NOT LIVE IN DETROIT!  I live near it though...

 

Insurance was over $400/month.  That was with a $500 deductible.

 

I thought it was a mis-quote.  The insurance agent explained it was not.  If I had tickets, OR lived in Detroit, insurance would be substantially more.

 

I went to several other agencies, but the lowest was $380/month.  In the end, I did not buy a new vehicle. 

 

No wonder a lot of people in Detroit Michigan can't afford to drive.  Auto insurance is simply too much.

From what I understand from your post the situation is quite bad over in MI. I can relate as we have a pretty crappy car insurance in Ontario. But how exactly would Google moving into auto brokerage do you think would lower premiums? What you describe sounds more like an underwriting or costs issue.

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Hey all:

 

I have a perfect driving record.  I am in my 40's.  I DO NOT LIVE IN DETROIT!  I live near it though...

 

Insurance was over $400/month.  That was with a $500 deductible.

 

No wonder a lot of people in Detroit Michigan can't afford to drive.  Auto insurance is simply too much.

From what I understand from your post the situation is quite bad over in MI. I can relate as we have a pretty crappy car insurance in Ontario. But how exactly would Google moving into auto brokerage do you think would lower premiums? What you describe sounds more like an underwriting or costs issue.

 

Yes, Michigan has many problems, especially relating to insurance.  I worry about it becoming a "failed state".

 

As to insurance, more competitors should bring about lower prices.

 

Also, Google has TONS of cash and they are an internet company.  Perhaps they will do something stupid like underwriting insurance at a loss to get market share and name recognition.  Internet companies don't always do rational things.

 

Google also has some political heft.  Perhaps they can throw their weight around to get some things fixed?

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DTE that is insane.  I was paying 420/yr to Erie to insure my truck till I got rid of it.  Considering the level in poverty in Detroit I wonder how many people are driving uninsured.

 

Any idea what caused it to be so high?  Is it just high if you get full coverage to pay claims for theft?  Or maybe uninsured/underinsured coverage is high since no one can afford insurance?

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I wonder if they plan on setting up customer service.

 

Maybe even listing a phone number for claims?

 

Maybe Googles Watson will handle customer service?

 

I might be way off but my impression was that Google does not like to talk to people.

 

Will be interesting to watch.

 

;)

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FWIW. I went to that website and signed up for a quote. I got 3 quotes, the lowest of which was about 15% lower than my current policy for 2 vehicles. As i've been with my current carrier for over 10yrs and have not had anything but great service from them and have other insurances like homeowners, umbrella etc bundled, and had never heard of the insurance company underwriting this policy. I decided it was not worth it for me to change. This morning I got a call from an operator offering to put me in touch with a broker offering to discuss my needs further.

So this might be them positioning themselves as yet another middleman and collecting a toll for that. That is something they really excel at! :)

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DTE that is insane.  I was paying 420/yr to Erie to insure my truck till I got rid of it.  Considering the level in poverty in Detroit I wonder how many people are driving uninsured.

 

Any idea what caused it to be so high?  Is it just high if you get full coverage to pay claims for theft?  Or maybe uninsured/underinsured coverage is high since no one can afford insurance?

 

Matjone:

 

Yes, it is quite insane...The cost of insurance for slightly less coverage in MI is about 6.5X what I was paying in TX.

 

Mind you, I have a PERFECT driving record, no accidents, no points, no DUI's, nothing...

 

I also don't live in Detroit, but I could walk to the city limit if I had some time & were so inclined...

 

When I last lived in Detroit in the late 80's you simply could NOT get insurance for some high end luxury cars & sports cars.  Insurance on mid-range sports cars like Corvettes was likely to exceed your monthly note (if you financed the car).

 

I asked some of the people I work with how they deal with insurance...they have their cars registered in other states.  They have cars registered with their elderly parents.  I strongly suspect that some of them drive without insurance.

 

I work with attorneys.

 

I can't imagine what "regular" people do.

 

Insurance goes down the farther you get from the city of Detroit.

 

I've heard estimates that over 50% of people in Detroit do not have valid drivers licenses and insurance on their vehicles.

 

So you have a HUGE pool of uninsured motorists driving around not paying insurance, not paying for registration, not paying for licenses.  That drives up the cost of insurance.  The higher insurance goes, the more drivers go without.  It quickly becomes a negative feedback loop.

 

Don't even get me started on the condition of the roads and high taxes we pay for them.  The Detroit area EASILY has the worst roads I've EVER seen.  It is a real problem as some roads are almost impassible and there is lots of damage to vehicles (blown tires, damaged rims, alignment, shocks, etc).

 

Michigan has a lot of problems...

 

 

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DTE that is insane.  I was paying 420/yr to Erie to insure my truck till I got rid of it.  Considering the level in poverty in Detroit I wonder how many people are driving uninsured.

 

Any idea what caused it to be so high?  Is it just high if you get full coverage to pay claims for theft?  Or maybe uninsured/underinsured coverage is high since no one can afford insurance?

 

Matjone:

 

Yes, it is quite insane...The cost of insurance for slightly less coverage in MI is about 6.5X what I was paying in TX.

 

Mind you, I have a PERFECT driving record, no accidents, no points, no DUI's, nothing...

 

I also don't live in Detroit, but I could walk to the city limit if I had some time & were so inclined...

 

When I last lived in Detroit in the late 80's you simply could NOT get insurance for some high end luxury cars & sports cars.  Insurance on mid-range sports cars like Corvettes was likely to exceed your monthly note (if you financed the car).

 

I asked some of the people I work with how they deal with insurance...they have their cars registered in other states.  They have cars registered with their elderly parents.  I strongly suspect that some of them drive without insurance.

 

I work with attorneys.

 

I can't imagine what "regular" people do.

 

Insurance goes down the farther you get from the city of Detroit.

 

I've heard estimates that over 50% of people in Detroit do not have valid drivers licenses and insurance on their vehicles.

 

So you have a HUGE pool of uninsured motorists driving around not paying insurance, not paying for registration, not paying for licenses.  That drives up the cost of insurance.  The higher insurance goes, the more drivers go without.  It quickly becomes a negative feedback loop.

 

Don't even get me started on the condition of the roads and high taxes we pay for them.  The Detroit area EASILY has the worst roads I've EVER seen.  It is a real problem as some roads are almost impassible and there is lots of damage to vehicles (blown tires, damaged rims, alignment, shocks, etc).

 

Michigan has a lot of problems...

 

I am not sure it is that bad.  But then again, I haven't priced other states.  I am in my 40s with a teenage driver (3 people) and we pay 4200 a year for 2 suvs (mid-luxury) and a midsize luxury car. 

 

This is in metro detroit

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Since this is becoming a thread about Michigan let me jump in.

 

People tend to point to Detroit and say that Michigan is in trouble without looking at the west side of the state around grand rapids and the lakeshore. over here we are doing great. housing is getting hard to find, my county is one of the counties with the fastest growing jobs market and none of them were tied to the oil industry.

 

and to give you a auto insurance comparison I pay about 1800 a year for full coverage on 2 cars (BMW 740I and Toyota Sienna)

 

If any of you are in the lakeshore area feel free to drop me a line and I will show you around.

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Bound and determined to find way to piss away their S/H capital, I mean grow into new areas.  Awesome thing is dual voting structure means its even easier for them to tell outside S/H to go get stuffed.

+1

Yes it's easy to say let's piss away some capital I have plenty anyway. You do that enough times and you won't have that much anymore. The dual voting structure comes back to their attitude that shareholders aren't smart enough to understand the amazing stuff they are doing and they're gonna hurt themselves by voting on stuff they don't understand.

 

Being on the other side of the fence, I love the simplicity of choice that Google's structure gives to investors: You either buy the story or you don't. You don't have to worry about some random activist running in with their amazing insights and breaking things that may or may not be broken, depending on opinion. I happen to buy the story entirely, thus I'm satisfied that Google gets to do what it does uninterrupted.

 

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