May 14th, 2012
This article first appeared on BetaKit
Car insurance is a necessary expense for drivers, who often comparison shop to get the best rates. New comparative car insurance shopping platform CoverHound, which saw its public launch this week at the Finovate conference, is trying to make comparison shopping easier by “enabling consumers to compare and buy policies from top national brands” in the U.S. The company offers an online comparison service, supported by its own full-service independent insurance agency.
Founder and CEO Basil Enan says his company is trying to eliminate the “messy and opaque nature” of shopping for car insurance. “We want to show everyone that we have the best rates; there is no transparent marketplace for insurance shopping,” Enan told BetaKit. “We publish all rates so consumers can decide for themselves.” CoverHound collects a user’s basic info and insurance needs.
After inputting vehicle and driver information, the site then presents comparisons for users to review. They have partnerships with several leading insurance carriers, and have a team of in-house insurance professionals. They’ve partnered with insurance carriers including Progressive, Travelers Safeco and GMAC, which Enan says allows them to deliver precise and personalized rates from the carrier to consumer. As part of their service, CoverHound has introduced Insurance Storefront—a customizable feature that allows financial institutions to offer the company’s insurance rate comparisons and policies to their clientele.
“It allows [credit unions, banks and personal finance websites] to offer car insurance rates and policies to their users with only a line of code,” he explained. “Partners can monetize their traffic in new and lucrative ways by offering car insurance. For example, banks now offer credit cards and mortgage loans … with CoverHound they can offer insurance rates and policies, seamlessly.”
CoverHound launched in private beta three months before yesterday’s public launch. Enan said they have thousands of beta users, but wouldn’t specify how much those users have saved. The service is available in 30 U.S. states, and the company plans to launch nationwide in the near future. Enan says CoverHound’s model is popular in the UK, with companies like Comparethemarket.com offering a similar service, but says theirs is the first to offer the same service in the U.S. The company was part of the AngelPad startup incubator, and received $750,000 in seed funding from Blumberg Capital in 2011. Enan said they are currently raising another round of capital.
In the coming year Enan and team intend to continue working with their partners in order to expand the Insurance Storefront offerings, add new partner carriers and expand into the remaining 20 states. With a solid base of early users and partnerships with top insurance providers, CoverHound is well-positioned to win over drivers. But insurance providers already have their own strong web presences, so the company’s challenge will be finding a way to find drivers before insurance companies find them directly.
CoverHound will have to compete with partner Progressive, for instance, which already offers online rate comparison tools as well as providing its own insurance coverage to consumers. And it will have to lure users away from traditional ways of finding the best deals on insurance, including brokers, who seek out rates from multiple companies and try to provide the best coverage for their needs. More users are looking online first for services and solutions, however, so the online insurance shopping market should be set to grow, good news for CoverHound and others in this space.