Google Compare”…The Latest “Apples to Apples” Auto Insurance Comparison Illusion


Male Typing

Abstract:

Google has launched its “Google Compare” auto insurance comparison website for California consumers, perhaps Google’s first step towards a deeper immersion into the multi-billion dollar auto insurance marketplace. Right now, nothing really differentiates Google Compare from the many similar comparative rating websites, but it adds to the illusion that consumers really can compare insurance products and reach purchasing decisions online. Caveat emptor anyone?

In “A Day in the Life” by the Beatles, John Lennon sang:

I read the news today, oh boy, About a lucky man who made the grade. And though the news was rather sad, Well, I just had to laugh….1

I read the news today about “Google Compare” but found nothing to laugh about. Another day, another auto insurance comparative rating website. And another auto insurance comparison website that misleads consumers into believing that what they’re going to get is a true product comparison on which they can make a purchasing decision. Nothing could be further from the truth or closer to potential catastrophe for American consumers and families.

Google Compare’s Claims

The news of Google Compare’s launch sent me to their official blog where I found the following [emphasis added]:

Whether it’s buying the right car insurance or finding the best credit card, people want an easy way to understand and compare financial products online. In fact, when it comes to buying car insurance, 80% of drivers think they’d find a better policy if they could compare more than two providers.* That’s why today we’re introducing Google Compare for car insurance in California, with more states to follow. This represents the newest addition to a suite of Google Compare products designed to help people make confident, more informed financial decisions.

Google Compare for car insurance provides a seamless, intuitive experience for connecting with your customers online. Whether you’re a national insurance provider or one local to California, people searching for car insurance on their phone or computer can find you along with an apples-to-apples comparison of other providers -- all in as little as 5 minutes. You can highlight what makes your business unique, whether that’s an “A” rating in customer service or better discounts for safe drivers. And when users adjust their deductible or add additional cars to their quote, you can show updated pricing that matches their needs. They can then buy their policy online or over the phone through one of your agents.

What does this tell me? First and foremost, that whoever is behind this knows pretty much nothing about the insurance industry, its products, or practices. Let’s examine each of the highlighted comments above.

Rebutting Google Compare’s Claims

Comment: “people want an easy way to understand and compare financial products online”

Response: The only comparison provided is pricing, so consumers have no greater understanding of what they’re buying than a contestant viewing Doors #1, 2, and 3 on Let’s Make a Deal.

Nothing on this website enables consumers to “understand” or compare the product they think they’re buying. The site tells you absolutely nothing of substance about any individual insurance policy or the claims or service practices of the insurer. All it tells you is the price of an unknown product. If you were brought to a 7-bay garage knowing that a “car” was behind each overhead door, but the only information you had were the signs on the doors of each bay with prices ranging from $5,689 to $14,069, which would you choose? Obviously you don’t have enough information to make an informed decision, yet in the case of auto insurance you’re expected to buy based solely on price without seeing the product. Even “Let’s Make a Deal’s” Monte Hall didn’t allege that their contestants were making informed decisions.

Do consumers buy anything else like this? And, if you ASK to see the policy before you buy, you’re wasting your time. My attempt to do this on other websites resulted in a 100% rejection rate. Do consumers enter into any other kind of legal contracts where the drafter of the contract refuses to allow the purchaser to read the contract in advance?

Comment: “80% of drivers think they’d find a better policy if they could compare more than two providers”

Response: Comparing only prices in no way enables consumers to find “a better policy” since no distinguishing features among policies other than price are offered.

How could a driver possibly think they’d get a “better policy” when the only real comparative information they’re given is a price? I did a quote on the web site using a hypothetical 60 year old single California man with a 4 year old Honda Civic. The premiums I was quoted for $50/$100/$50 (what they offered, not what I asked for) liability and UM (the latter without PD), $5K medical payments, and comprehensive and collision, each with a $500 deductible ranged from $569 from “one of America’s Most Trustworthy Companies” to $1,407 from a carrier with “A Great, Low Rate With Flexible Payments To Fit Any Budget.” Even “Let’s Make a Deal’s” Monte Hall didn’t allege that their contestants were making informed decisions. Now, how is that comparing providers by any measure other than price?

Comment: “a suite of Google Compare products designed to help people make confident, more informed financial decisions”

Response: When the only “information” you are provided is pricing, how can anyone make a more informed decision?

How can a product comparison differentiated solely by price be considered, and lead to, an “informed” decision? Any consumers that buy into this claim have a misplaced confidence. This criticism is not limited to Google Compare. Pretty much every online comparative rating system shares this deficiency because it does not truly compare the products, nor does it ascertain the unique exposures of the consumer and match those exposures with the correct product, avoiding quoting products with potentially catastrophic coverage gaps relative to those exposures. Only a true insurance professional can do that and these systems are not sophisticated enough to do that because their only other “redeeming” feature is how fast they can give you a quote (which is likely not what you’ll actually pay once more complete information is provided).

Comment: “along with an apples-to-apples comparison of other providers”