Retailer gets into vehicle coverage

Wal-Mart pushes price comparison

Wal-Mart officially got into the car insurance business Tuesday.

Much like its recent foray into the money-transfer business, Walmart-2-Walmart, the global retail giant is using its reach to steer customers toward auto coverage. On Tuesday, the company announced its partnership with AutoInsurance.com, an online price-comparison firm.

Wal-Mart will be the exclusive retailer and marketing partner. AutoInsurance.com founder Joshua Kazam will maintain his current role and continue to be involved with the company, officials said.

The online service allows customers to compare premiums from leading auto insurance carriers such as Progressive, Esurance and Safeco, then buy policies directly from the website. Wal-Mart stores will provide printed materials promoting the service to drive customers online where they can receive a “true apples-to-apples comparison,” Kazam said.

The collaborative effort has been tested over the past year in Pennsylvania and is now also available in Arkansas, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. The remaining states will be added in the coming months, said Daniel Eckert, senior vice president of services for Wal-Mart U.S.

Eckert said a survey of Wal-Mart customers showed that auto insurance is one of their largest monthly expenses, even more so than health care.

“But it’s not just expense. It’s frustrating, too,” Eckert said Tuesday. “It’s hard to know what you need and don’t need in a policy, and it’s time-consuming to shop for and compare quotes from multiple carriers.” As a result, many consumers end up paying more than they want to spend, he said.

Eckert said the average American household spends $1,530 per year to insure their automobiles, and 14 percent of drivers don’t have insurance.

During the Pennsylvania test, customers who bought policies through the Wal-Mart/ AutoInsurance.com partnership and reported their savings said they saved an average of more than $1,100 on their car insurance annually. More than a third of the customers in the pilot were previously uninsured.

Drivers in Arkansas pay an average of $665.86 per vehicle annually in insurance premiums, according to information provided by the National Association of Insurance Commissioners. The Insurance Research Council said 16 percent of drivers in the state are uninsured, making Arkansas the 11th highest in the nation for uninsured motorists.

Consumers who log on to the website will be asked to provide their name, address, date of birth and contact information. They can then opt to have the site retrieve their current auto insurance policy,which allows AutoInsurance.com to automatically fill in most of the necessary coverage information and provide a direct comparison - with multiple quotes from leading carriers. They can customize their coverage, including deductibles, and those choices will be reflected in the quotes.

“AutoInsurance.com is the most recent example of how we continue to leverage the strength of our size, scale and reach to deliver products and services that not only address our customer’s needs, but also keeps our business one step ahead,” Eckert said.

Business, Pages 27 on 04/30/2014

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