Walmart Begins Selling Auto Insurance Online

  • Print
by Amy O'Connor

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 week that online discount retailer Overstock.com is also starting to sell insurance on its website.

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.”

A recent global survey by Accenture found that many as two-thirds (67 percent) of insurance customers would consider purchasing insurance products from organizations other than insurers, including 23 percent who would consider buying from online service providers such as Google and Amazon.

Customers who switch auto insurance carriers due to poor service often end up sorry they did because they end up paying more with their new insurer, according to the latest J.D. Power 2014 U.S. Insurance Shopping Study.


Related Products


Comments

  • May 12, 2014 at 11:21 am
    IIA GA says:

    Buying insurance from Walmart makes as much sence as buying a car from CVS. Insurance is a maze of unclear choices and best left to consumers to transact with Trusted Independednt Insurance Agents who have not only the knowledge to be advocates but are also not involved with the selling of mops.

  • May 12, 2014 at 3:54 pm
    Joe Jimenez says:

    Terrible news. Wal-Mart has been known for putting small retailers out of business and this new venture will not help local independent agents. To see companies like Esurance, Progressive and Travelers in this business model is not surprising, but to see SAFECO be a part of it is more than shocking as they have always been sold through independent agents ONLY. Of course they will claim that they had nothing to do with this but I ask, why allow themselves to be included? Money of course. In my opinion, Safeco’s loyalty to independent agents is now undermined in the name of online “convenience” to the customer. Really? Local independent agents live and work in the neighborhoods their clients live in. Not in another state through toll-free numbers or fancy websites.

  • May 12, 2014 at 6:58 pm
    liz ward says:

    Walmart customers will be surprised to know that they won’t be able to go to the service desk and get “refund ” on this purchase when they find that the product isn’t what they expected. Oh well, reality check.You get what you pay for! IIA

  • May 13, 2014 at 9:24 pm
    County Line says:

    Just exactly what we need; another player in the market selling price first and benefits last. When your claim is a real and pressing matter, it is no time to be with a virtual insurer.

Add a Comment

Your email address will not be published. Required fields are marked *