Whether you know it through the gecko or the caveman, GEICO is one of the most well-branded insurance firms in the US. The Maryland-based firm is a wholly-owned subsidiary of Berkshire Hathaway and provides coverage for more than 27 million vehicles owned by more than 16 million policyholders. It’s an insurance force to be reckoned with.
A brief history of GEICO
GEICO was founded in 1936 by husband and wife team Leo and Lillian Goodwin, who were brave enough to set up a new company at the height of the Great Depression. The company was established as the Government Employees Insurance Company, with an initial client target of federal employees and certain categories of enlisted military officers. Within a year, GEICO had written 3,700 policies and hired 12 staff members.
In 1948, Benjamin Graham, a business professor at Columbia University in New York, chose to invest in GEICO. This was a pivotal moment in the firm’s history as Graham would later teach a young Warren Buffet at Columbia and therefore establish the famous link between GEICO and Buffet. In 1951, Buffet visited Washington to learn more about GEICO and had an impromptu meeting with Lorimer Davidson, an investment banker and good friend of the Goodwins. After this meeting, Buffet decided to buy some GEICO stock – and the rest is history.
When Goodwin retired in 1958, Davidson was named his successor. He went on to lead the company through 20 years of steady growth, reaching the one million policyholder mark in 1964 and generating insurance premiums of $150 million in 1965. Growth slowed down in the 1970s and years of aggressive expansion were starting to take a toll on the company’s loss reserves.
GEICO responded by exercising prudent underwriting – a move that triggered the second Warren Buffet appearance, when he reportedly purchased $1 million shares in GEICO stock in 1976. In the 1980s, GEICO introduced a 24-hour a day, 365-day a year telephone service for claims, sales and service. This customer-centric model remains with the firm today.
Buffet’s Berkshire makes the bid
In the early 1990s, GEICO went from strength to strength under the leadership of new chairman, president and CEO Olza “Tony” Nicely. Warren Buffet’s Berkshire Hathaway investment firm made a bid for the shares of GEICO’s remaining stock in 1995, and by 1996 GEICO became a Berkshire Hathaway subsidiary.
GEICO at a glance – 2018
- GEICO insures more than 27 million vehicles and has more than 16 million auto policies in force
- It’s the second largest private passenger auto insurer in the US
- The firm employs more than 40,000 associates and maintains 17 major offices across the country
- GEICO enjoys high ratings from A. M. Best, Moody’s and Standard and Poor’s for financial strength and claims-paying ability
What product lines does GEICO cover?
Private passenger auto insurance is GEICO’s most popular offering. Beyond private passenger auto insurance, GEICO also provides: motorcycle, ATV, RV, and boat insurance; homeowners’, renters’, condo, co-op, and mobile home insurance; personal umbrella protection; life insurance; flood insurance; overseas insurance; business owners’; professional liability insurance; general liability insurance; commercial auto insurance; collector car insurance; identity protection; and jewelry insurance.
The GEICO Mobile app was created to provide GEICO consumers with easy access to their car insurance information. It provides immediate access to digital ID cards, roadside assistance, and a virtual assistant who can answer questions related to coverage, billing, and more.
Does GEICO use independent agents to distribute its products?
The GEICO website states: “GEICO never sells its products through insurance brokerages or independent agencies. GEICO Local Agents are exclusive agents for GEICO and partner companies and are not allowed to represent other insurance companies that compete with GEICO and partner companies in any way. GEICO Local Agents are permitted, with prior approval by GEICO, to sell insurance not offered by GEICO and partner companies.
“GEICO Local Agents are entrepreneurs who go into business to represent GEICO and property partners exclusively. Their primary role is to prospect and generate insurance leads and policies that GEICO would otherwise not capture.”
The gecko and the caveman
The GEICO gecko made his advertising debut in 1999 and quickly became a popular symbol for the firm. The idea spawned from a common mispronunciation of the GEICO name as “Gecko”. The key aim of the GEICO gecko is to “save people money” on their car insurance. Five years later, the GEICO Caveman entered the scene with the “So easy a Caveman can do it” ad campaign.
GEICO provides average to low rates and fairly good customer service. For the most part, it is comparable to other insurers in terms of insurance offerings and discounts. However, GEICO distinguishes itself as one of the best insurance companies out there when it comes to providing easy-to-use online tools.
The GEICO mobile app has more features and is better reviewed than the apps currently offered by Progressive, State Farm and Farmers Insurance.
This app affords policyholders convenient options for paying their bills as well as managing and accessing their insurance information. While other insurance companies may provide similar mobile tools, GEICO leads the industry in this category and is constantly improving its capabilities.
One drawback of GEICO is that it has very few in-person offices compared to other large insurers. GEICO has around 150 locations across the U.S., compared to State Farm’s network of more than 18,000 agents nationwide. If you prefer to work in-person with your own insurance agent, another insurance company may be a better fit.
Auto insurance takeaway: For auto insurance, GEICO’s low rates, paired with the fact that its coverages and discounts are consistent with its competitors’ offerings, make it a safe choice for car insurance.
Homeowners insurance takeaway: GEICO doesn’t underwrite or service its own homeowners insurance policies; instead, it matches you with one of its home insurance partners. Your price, coverage options and level of service will all depend on which company GEICO connects you to. Because of this, we only recommend home insurance with GEICO if you can pair it with a GEICO auto insurance policy for the bundle discount.
GEICO Auto Insurance
- Unique GEICO auto insurance features
- What’s covered under GEICO auto insurance?
- GEICO auto insurance discounts
- GEICO auto insurance quotes: how much does it cost?
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GEICO auto insurance has competitive rates, good customer service, and enough coverage options and discounts to please most drivers. It offers a lot in terms of convenience, with 24-hour customer service available and an app where you can control almost all aspects of your coverage on the go. However, if you are a high-risk driver—specifically a young driver with an accident on your record—you might overpay for car insurance with GEICO. Also, GEICO will provide coverage if you need an SR-22 or FR-44 filed on your behalf.
GEICO auto insurance features, coverages and discounts
For the most part, GEICO’s solutions for auto insurance customers are similar to what you can get with the other major car insurers like Progressive, State Farm and Farmers. The exceptions to this are the GEICO Mobile app and the Prime Time Contract, which is an interesting program for drivers over the age of 50.
GEICO mobile app: Drivers can use the GEICO Mobile app for all aspects of managing their auto insurance, from getting a quote to filing a claim. Drivers insured with GEICO can even use Amazon’s Alexa to pay their insurance bills. If you are looking for an auto insurer that’s not going to make you go through an agent or wait on the phone to manage your auto insurance policy, then GEICO is a great option. While this is not the only app where you can manage your auto insurance, it is one of the absolute best.
Prime time contract: This is a guaranteed auto insurance renewal program designed for GEICO customers who are over 50 years old. Customers in the Prime Time Contract program will always have the option to renew their insurance policy as long as they continue to be GEICO auto insurance policyholders. Drivers in this program are protected from situations where an insurer might not offer to renew a policy—like drivers who are considered high-risk due to multiple traffic violations. Just note that the Prime Time Contract does not guarantee that your rates will always be the same. Besides being over the age of 50 to qualify for this program, you must:
- Have no drivers under 25 years old on the policy.
- Have no violations or accidents in the last three years.
- Have no vehicles on the policy that are used for business.
Some insurers might offer a guaranteed renewable policy to customers who have been with them for a certain amount of time—for example, more than 20 years with Progressive. GEICO offers this policy to new customers, which is quite unique.
Auto Repair Xpress®: This is a program that includes a network of repair shops that work with GEICO. By choosing to fix your vehicle at an Auto Repair Xpress® facility, you get a GEICO-backed guarantee for all repairs as long as you own your vehicle. This is a nice feature to have, but it’s not unique to GEICO, as Farmers and Progressive also have repair guarantees.
Car buying service: To help you get a better deal on a new car, GEICO offers its Car Buying Service, which connects you to local dealerships and lets you see what other people have paid for a certain vehicle. You can use this service to compare car prices without having a GEICO insurance policy.
GEICO auto insurance coverages
Most of the coverage options that GEICO offers are pretty much in line with what is available with other auto insurance companies, although they may vary by state or by vehicle. Here’s what GEICO offers:
- Bodily injury and property liability coverage.
- Collision and comprehensive coverage.
- Uninsured and underinsured liability coverage.
- Medical payment and personal injury protection coverage.
- Gap Insurance for leased vehicles.
Mechanical breakdown insurance (MBI): This coverage pays for certain repairs to vehicles that are less than 15 months old and have fewer than 15,000 miles. Specifically, it covers repairs to mechanical components, such as the engine, transmission or air conditioner. This option does not cover fees for diagnostic measures if your vehicle is not found to have a mechanical failure.
Progressive offers similar coverage through Warrant Direct, which charges one deductible that varies by policy per qualifying repair shop visit. This differs from GEICO’s MBI coverage, where you have to pay a separate $250 deductible for each unrelated repair. This means if your transmission and air conditioner both need to be repaired, you will be responsible for two deductibles. You are also able to cover older vehicles with Progressive’s program.
Rideshare insurance: Other insurers might offer rideshare coverage as an extension of your personal policy or only offer a full commercial insurance policy, but GEICO’s hybrid policy is fairly special. GEICO offers a combined rideshare and personal auto insurance that allows its customers to purchase just one policy. Having this insurance covers you when you are driving both for work and for pleasure.
Emergency road service: GEICO’s Emergency Road Service provides assistance in the event that you have a roadside emergency, and it’s similar to other roadside assistance programs in terms of coverage and limits. For example, it will cover jump-starts, flat-tire changes, towing (for nonaccident-related incidents) and up to $100 for locksmith services. Compared to AAA Plus roadside assistance, GEICO’s Emergency Road Service offers almost the same coverage at lower rates—not counting the discounts and rewards that AAA members can receive.
Accident forgiveness: With Accident Forgiveness, your auto insurance rates will not increase after your first at-fault accident. This coverage can either be purchased or earned, which sets it apart from similar programs at other insurers. Certain drivers—those with good driving records—will be eligible to purchase accident forgiveness. To earn accident forgiveness, you must be a qualifying driver and must be accident-free for five years or more. This coverage is not available in California, Connecticut or Massachusetts.
Glass coverage: You may be able to add coverage that will waive your deductible for comprehensive claims for glass repairs. This costs a little bit extra, but it might be worthwhile if you can take advantage of what is essentially free windshield repair.
Rental reimbursement: With GEICO’s Rental Reimbursement, you will be covered for the cost of a rental car if your car is undrivable for more than 24 hours. The amount that this coverage will pay out is based on a per-day and per-claim limit, which is selected when choosing this coverage option. For example, you might select coverage for $45 per day and $1,350 per claim.
GEICO auto insurance discounts
The discounts that GEICO offers are pretty standard across the auto insurance industry, with the majority tied to vehicle equipment and safe driving habits. GEICO will also award discounts to policyholders who are members of certain organizations and for bundling multiple vehicles under the same policy.
Federal employee discount: Active or retired federal employees can qualify for a discount of up to 8% on their car insurance. This is also known as the eagle discount.
Military discounts: Active-duty U.S. military personnel, retired U.S. military members, or members of the National Guard or Reserves could save up to 15% on premiums.
Driving history discounts: If you’ve been accident-free for five years, you may be able to save 26% on your car insurance with GEICO. As previously mentioned, having a clean driving record could make you eligible to receive free accident forgiveness, which would save you money after an at-fault accident. You can also receive up to 15% off your medical payment or personal injury protection premiums if you and your passengers always wear their seat belts.
Defensive drivers discounts: For completing an approved defensive driving course you can save on your car insurance with GEICO. The amount you could save varied by state, for the states that offered a discount for taking a defensive driving course, you could save 5%‒20% on applicable coverages. The five state that, at this time, do not offer discounts for defensive driving courses are Hawaii, Massachusetts, Michigan, North Carolina and Vermont.
Student discounts: Full-time students who maintain at least a “B” average may save up to 15% on their total car insurance premiums in some states. Drivers must be between the ages of 16 and 24 to qualify for this discount. Young drivers also might be able to receive a discount on their coverage for completing a driver’s education course.
Pay-in-full discount: By paying your entire premium for the full term of your policy, you can save money by avoiding installment expenses that GEICO charges for paying month to month.
Membership and employee discounts: You might be able to receive a discount for being a member or employee of a certain organization. There are more than 500 schools and universities, professional organizations, and other institutions included in this group.
Multicar discount: Insuring more than one vehicle with GEICO could save you up to 25% on your premiums.
Multipolicy discount: By having a homeowners, renters, condo or mobile home policy with GEICO, you could receive a discount on your car insurance.
Vehicle equipment discounts: If you have an auto insurance policy with GEICO, you can receive discounts on your premiums for having the following equipment:
|Discount||Amount it could save||Portion of premium the discount affects|
|Air Bag||up to 25% for driver-side air bags and up 40% for full front-seat air bags||Medical payment or personal injury protection coverage|
|Anti-lock Brakes||up to 5%||Collision coverage|
|Anti-theft||up to 25%||Comprehensive coverage|
|Daytime Running Lights||up to 1%||Certain coverages|
GEICO auto insurance quotes
GEICO’s rates were good to average compared to its competitors. For drivers who did not have accidents or violations on their records, the rates that GEICO provided were 19% below the average.
GEICO’s rates were fairly high for higher-risk drivers. The quotes provided by GEICO for the profiles that had an at-fault accident within the past five years were on average 13% higher than the mean for those profiles. Their quotes were especially high for our 18-year-old drivers, at almost $3,000 above the average annual rate.