If you buy a new car and you don't have auto insurance,
you often have to wait for hours to get auto insurance coverage before
you can drive your new vehicle off the lot. Now, in several car
dealerships in California, you can have coverage in a matter of
minutes.
TurboCoverage,
based in Palo Alto, Calif., has launched a new auto insurance service
for car dealerships that allows uninsured car buyers to instantly
secure coverage and drive away insured. Currently, TurboCoverage is focused only on the
non-standard (high-risk) and uninsured market, but the company hopes to
expand into the standard market. Jim Grim, president and CEO of
TurboCoverage, says that the company will move into the standard market
by adding insurance companies that sell insurance to the standard
market, as well as by keeping drivers who graduate from non-standard to
standard status.
"For consumers, TurboCoverage eliminates
one of the worst parts of the car-buying experience and gives them
greater control of the process," says Grim. "For auto insurers,
TurboCoverage delivers the lowest customer acquisition costs for the
non-standard market compared to any offline distribution channel." TurboCoverage says that approximately 3 million
insurance transactions, or 20 percent of the car buyers in the 22,000
franchised auto dealers in the United States, purchase car insurance
at a dealership each year. More than 25 dealerships in northern
California are using TurboCoverage. By late summer, the company expects
to begin expanding the program into 16 additional states, says Sean St.
Clair, TurboCoverage's director of business development. Consumers can buy auto insurance in about 10 minutes
at a TurboCoverage dealership. They can select coverage from three
companies: Infinity Insurance Co., Interstate Insurance Co., and
Workmen's Auto Insurance. The company has just negotiated contracts to
sell policies from five additional carriers: Leader Insurance; two
other Infinity companies, Infinity Special and Infinity RFVP; TOPA
Insurance; Unitrin Specialty/Financial Indemnity Co.; and Western
United. TurboCoverage makes its money through insurance
commissions and splits a "car-buyer policy initiation fee" — basically
a broker fee — with car dealers. TurboCoverage installs workstations in
dealerships that allow customers to purchase the insurance on their
own. Dealerships cannot offer advice or help during the insurance
purchase. Customers can pick up a phone in the workstation and be
instantly connected with a TurboCoverage customer service
representative. The customer can either pay the insurance premium by
credit card or by an electronic funds transfer from their bank account.
Two copies are printed out in the workstation: one for the customer and
one for the dealership's finance department. If the policyholder has
future questions or needs to make changes to their coverages, they can
either call TurboCoverage or the insurer directly.
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