Geico Home Insurance: Is It From Geico or Another Company?
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Does Geico Home Insurance Exist?
- While you can indeed buy home insurance from Geico
- Your policy isn’t actually underwritten by them
- They are simply acting as an agent for an unaffiliated company
- And reselling you a product with their name on it
A reader recently asked us if “Geico Home Insurance” really exists?
Spoiler alert! Geico does not actually “write” homeowners insurance. You may be hemming and hawing about that statement because Geico sold you a homeowner’s insurance policy just the other day…but it’s true!
Sound crazy? Well, the devil is in the details. Geico may very well have provided the insurance quotes and sold you a homeowner’s insurance policy, but they are not your insurance company, meaning they will not pay your claim if you suffer a covered loss.
This doesn’t mean your insurance claim will not be paid, it simply means the money does not come out of Geico’s pocket. What do we mean by that? Well, you must consider a little-understood facet of how insurance works. Let’s take a closer look at what we are getting at.
Insurance Company vs. Insurance Agent
- Insurance companies create and sell their own products
- An example being Geico auto insurance
- Whereas insurance agents sell insurance products
- For either one or several insurance companies
An insurance company, also referred to as an insurer, is an organization that develops and distributes an insurance product for a profit. See types of insurers for more information on this.
If the insurance product they sell is not profitable (i.e. they pay out more in claims than they generate in insurance premium dollars) they have an overall loss of income for a given time period.
An insurance agent, on the other hand, sells insurance to the public for a commission, but may not have a direct tie to the amount of money made by the insurance company they represent (see captive agent versus independent agent).
Regardless of the overall profitability of the insurer(s) they represent, the agent gets paid and is not on the hook for paying insurance claims out of the money they earn for selling the policy. Sounds pretty good, doesn’t it?
Well, that may explain Geico’s latest tagline, “More than just car insurance.”
Insurance Is a “Distribution” Game
- Because insurance is largely a commodity
- Otherwise known as exactly the same coverage from company to company
- It’s all about getting it out in front of your eyeballs
- And differentiating with clever marketing tactics to draw you in
At the end of the day, an insurance policy is a contract between two parties who exchange “consideration,” in this case a promise to pay for a covered claim (the insurer) for a paid premium (the person who buys the policy).
The types of coverage, policy limits, customer service and insurance premiums may vary widely by company, but every insurer must play by the same rules as every other insurer in a particular state.
Liability limits of 25/50/25 mean the same thing on every policy, whether it’s issued by Geico, Progressive or State Farm.
One of the only true differences between insurance companies that sell the same product, standard auto insurance for example, is how the product is marketed. Don’t believe us?
Ask yourself why many insurance companies have billion-dollar advertising budgets that bombard us with constant advertising on television, radio and through the mail.
They are trying to give us the “warm fuzzies” or connect with our sense of what’s cool in order to sell us something…it’s how advertising in a free market works. Capitalism at its finest!
What Does All of This Mean?
- Because Geico has an amazing distribution network
- They can offer other products alongside their own
- Even if they aren’t willing to make those products themselves
- Kind of like how retailers put candy and other cheap items at the checkout
This explains how and why Geico acts as an insurance agent for homeowners insurance companies.
Geico (and Progressive homeowner’s insurance for that matter) have some of the best insurance distribution channels in the United States, but are not willing, for whatever reason, to develop a homeowner’s insurance product of their own (which may be VERY expensive). There’s a reason they’re sticking to auto insurance and nothing else.
Progressive has tried it before and were not successful with the venture. Both Geico and Progressive, which are car insurers, sell you “someone else’s” homeowner’s insurance product.
That “someone else” is likely a company you have never heard of…but you don’t care because you bought a product from the friendly Gecko or Flo, who are both “people” you trust because they are funny and on television!
We all want to make purchases from people or organizations that we trust, even if that trust is based only on advertising.
Where Does Your Geico Home Insurance Policy Actually Come From?
- It could come from one of the few dozen different insurers
- That Geico seems to do business with via their insurance agency
- They are known as non-affiliated insurance companies
- And you might actually recognize some of the names
Dig out your homeowner’s insurance policy and read it carefully. You will likely see the name “Geico General Insurance Agency” or something similar on the top or bottom of the page in large letters and a different company’s name in smaller font somewhere else.
You may see the name of a familiar insurer, such as AIG, Chubb, Homesite, Liberty Mutual, or Travelers, or an unfamiliar one for that matter, which are just some of the many companies Geico Insurance Agency “places business.”
For the record, Esurance renters insurance and many of its other lines of business are also outsourced to companies like Homesite, so it’s not an uncommon practice.
You see, the fine print on Geico’s website mentions something about homeowners coverage actually being written through non-affiliated insurance companies, such as those listed above.
And Geico’s website actually has a page with all of their homeowners insurance partners should you need to pay a bill, make a change, file a claim, or gather some information. I believe there are some 30 insurers on that list.
A Geico Home Insurance Review Won’t Carry Any Weight
- If someone is attempting to review Geico Home Insurance
- They are either misinformed or simply making something up
- Because ultimately such a company doesn’t exist
- And your policy could come from dozens of different companies
If you’re looking for a Geico Home Insurance review, it’s going to be all over the place. One individual may have received their policy from AIG, while another got a policy from Travelers, even though both were sold by a Geico rep.
Obviously these are two different carriers, so the only thing you could really gauge was the customer service experience in applying for the insurance, not the actual policy experience thereafter.
How each company handles claims could be completely night and day, though you would hope each company Geico chooses to work with is of a certain quality.
When it comes to rates, that too will vary based on the company Geico places you with, which may be dependent on the state where the property is located.
This means pricing could be great for certain people in specific states, but not so good in others. The upside is that Geico might have the ability to shop your rate with a variety of carriers at once to find you the lowest price.
But even after doing this, you may still want to call up some carriers that sell homeowners insurance directly to see what they can offer. Or visit a local independent agent to see if they have access to even more carriers with discounted rates.
Geico Life Insurance and Renters Insurance Is the Same Story
- They do the same thing with other business lines
- Including life and renters insurance
- In fact, they pitch 24 different lines of insurance
- But then direct you to an unaffiliated company in which they earn a commission
For the record, Geico refers to policies from these affiliated companies as a “GEICO Portfolio Policy.” They also happen to sell life insurance, renters insurance, umbrella insurance, travel insurance, ridesharing insurance, and many other non-auto policies this way.
At last glance, Geico was pitching 24 different types of insurance on their website, which is pretty impressive. Who knew that many lines existed?
However, there’s a distinction between these policies and the auto policies Geico actually issues themselves. In reality, Geico life insurance doesn’t exist, nor does Geico renters insurance.
They simply partner with affiliated companies to get a piece of the action. That’s why you’ll also see a lot of disclaimers about not having control and not assuming responsibility for these providers when gathering insurance quotes.
Geico probably feels the companies offering umbrella insurance or travel insurance will be solid choices for you, but they have to let you know it’s a different company actually providing the coverage, or that it’s secured through the GEICO Insurance Agency.
While this doesn’t constitute insurance fraud by any stretch of the imagination, you may feel somewhat slighted, which is a common reaction when people find out they bought an insurance policy from some “no-name” insurer who doesn’t choose to advertise on television or radio.
Heck, if you end up saving money by switching your homeowners insurance to what you thought was Geico or Progressive, you can still consider it a “win,” because at the end of the day, insurance is becoming somewhat of a commodity anyway.
Even if it’s not actually Geico’s home insurance, the specific company the policy is with may provide excellent service (or even better service than what you would expect from Geico) at a decent price. And that may be all that matters to you.
We just felt it necessary to clear the air because that’s what we pride ourselves on; giving you the industry insider knowledge to help you make an informed decision when it comes to your insurance needs.
Read more: Top 10 homeowners insurance companies.