Auto Insurance Comparison Startup Leaky Launches Nationally, Raises $670K | Hacker News Reader

Auto Insurance Comparison Startup Leaky Launches Nationally, Raises $670K

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72 pointsjasontraff41 comments

Tried it and the lowest priced company it showed had a rate that was ~$250 cheaper than the actual quote I could get on the insurers web site. Plus my current company (Safeco) wasn't in the comparison list, which means the cheapest company (for me) isn't shown.

Not being in the US I'm not going to try it, but does this not work like the UK ones, where that's a real actual price and you click straight through to buying with the company at that quote?

--EDIT-- no I see that it does not work like this, now that I've read more about it, it predicts rates. Here's hoping they can actually integrate with insurers in future because the services like that here in the UK are pretty useful.

Try EZquo.com to get a quote from any company, including Safeco and the other carriers rated best on price and customer satisfaction by J.D. Power. It's a simple website that I built over the last few months: you enter your insurance details and get a private link that you can pass to any agent for a quote, without having to repeat your information.

This has the exact same issue that nearly all insurance companies seem to have and is the reason I'm with my current insurance company.

I have a 1978 Datsun/Nissan 280Z. Only one insurance company allowed an online/unattended quote for insuring that age car. Only one other company was able to give a quote after talking with them on the phone, all of the others didn't have the ability to do a quote, even for liability only insurance. I went in person to several places and the result was the same. The company that allowed me to get a quote online now has all my other insurance related business (renters/property/full coverage on my new car/etc.). It just so happens that they've been an amazing company to work with, particularly when we've had car related issues (getting rear-ended while stopped at a stoplight, hitting an animal in the middle of the night when there was no room to swerve/stop and rendering the vehicle undrivable, etc.).

Trying to go through the process to see what things are like, the list of makes of cars is an abomination. It tries to filter based on years the make was available, but isn't inclusive (Nissan starts at ~85, but Datsun doesn't exist for older dates, etc.) and ends up being an incomplete list for a large number of years (I sampled the most recent ~5 years and the oldest ~5 years and several major manufacturers are missing) as well as model of cars being incomplete for at least a few makes from those years as well.

On a car that age, even with the insurance comparison websites in the UK, it is often better and cheaper to go to a specialized broker who specialize in vintage/classic cars. They are often much cheaper and since they are small companies tend not to have online quotations.

The UI really isn't a problem, it just comes down to the company having the coplete set of data, which really is down to them either creating this list themselves or paying someone for it. I'm not sure of the case in the US, but if an online part company like http://www.eurocarparts.com/ or http://www.gsfcarparts.com can do it them I don't see what the problem is.

I rotate through antique/classic cars about every 5 years. I buy one in alright condition, slowly fix it up/restore it on weekends until it's in good enough condition to be a daily driver (normal commute is less than 2 miles), drive it for a while, then sell it and use some of the money to buy the next one. They're really not ready for specialized insurance until the last year or two I own them. That being said...because of the distance I drive, and the fact that it's only used for commuting/events/whatever (no out of town trips, not trips to the store, etc.) I typically have it on the super-cheap "I barely drive it" insurance and the company I'm with now (GEICO) has really good rates for antique/show cars.

That's kind of the scenario I was thinking of for the UK, where they have a very limited mileage insurance (2-3k miles per year). Typically owners of these cars only drive them rarely at the weekends, and only in the summer/in dry conditions.

There are lots of UI problems involved with car insurance - some are (in my opinion) actually fairly interesting. In established comparison markets outside the US the big players invest a lot of money in getting the user experience right so that users complete the process (there is a large drop-off).

By far the easiest way to solve this is to do a registration plate lookup: however, I don't know if this is even possible in the US, and it would be on a state-by-state level so a bit of a nightmare. In countries like the UK, where there is a single source of plates that companies can buy access to, it's a lot easier.

Leaky could probably learn a far bit from how insurance quotation engines in the EU and other less complex markets handle this. Here in the UK there are many well established players doing what Leaky do, probably with more success (which is totally down to the fact the UK insurance market is much more centralised).

Registration plate lookup would be a chicken/egg problem here in the States. You need proof of insurance in order to get your registration, so on a vehicle that has no plates, there's no number to give, so wouldn't be able to get insurance. VIN is really the way to handle it, and once you get through the "quote" stage to actually buying it, all the insurance companies can take any VIN (and your info, of course) and spit out how much it actually costs. On a state by state level, I don't imagine it would be difficult to build a system to accurately compare rates. The fact that each state has its own system of minimum requirements, as well as what can be covered, and insurance companies are isolated to a single state (the larger insurance providers are actually corporations with wholly owned subsidiaries in each state) increase this complexity when dealt with on a national level. It's extremely similar to the issues with comparing health insurance plans.

Agree - in the US, try and use the VIN and prompt the user to declare any addons outside of factory stock to be covered.

Welcome to doing something that has been done in Europe for many years now, and not just on auto-isnurance:

http://www.confused.com/

http://www.comparethemarket.com/

http://www.moneysupermarket.com/car-insurance/

to name a few...

I understand that this was a legal issue due to the insurers (but even so, they only launched a year ago...) but what is it with American companies that they just don't seem to get the internet?

Comparing price of auto-insurance is really no different than comparing the price of flights, travel insurance, cars, houses, whatever. It's a product/service and it is not going to be one size fits all. Some insurance companies will be a better fit in terms of price and options available, so insurance companies that are competitive will actually get more customers by being on the comparison sites.

This is very true, and actually had a strong influence on Leaky - especially in the early days. I spent a lot of time in the UK (and actually spoke at a price aggregation conference in London), and there are a few structural reasons for why the markets evolved so differently and have made the US much more resilient to adopting comparison services. Suffice to say, we think that's changing.

Glad to read you are launching country wide, and with over 100 companies on board. Hopefully that will be a wake up call for the remaining to get with the times and open up some services to consume.

Good luck with the venture.

There are legal reasons why the U.S. doesn't have true comparison sites, unlike the UK. Screen-scraping is illegal here, but not in the UK, so you need the cooperation of the carrier to show their quotes.

Most U.S. carriers don't cooperate with independent comparison sites, since they don't want to see their product commoditized.

It's not illegal, but it's not very strongly settled one way or another. http://en.wikipedia.org/wiki/Web_scraping#Legal_issues

There are legal reasons why the U.S. doesn't have true comparison sites

Yes, and I stated that in my original comment. My point is that these corporations need to get with the modern times. It's a global playing field these days, technology does not stand still in one part of the world whilst your (not personally) archaic thinking catches up. It's the same thinking model as the RIAA.

Replace Insurance with $Entrenched_Incumbent and you've nailed it for any industry.

Competition creates a price efficient market, which is the enemy of high margin businesses.

I take it you're not a fan "Go compaaaaare!"? (http://www.gocompare.com)

Only if you don't start singing the theme tune! :)

This is a great, much-needed product. I picked Progressive years ago because it seemed like the easiest onboarding process (and I'm lazy) -- I just didn't want to deal with the hassles of comparison shopping and negotiation. That said, I had no idea how bad I was getting ripped off until just now. Anyway, congrats on the launch. You can consider me a new, happy Leaky customer.

I plugged in my current policy (as close as I could get it) into Leaky and it got reasonably close. I have a custom policy ($200 deductible for comprehensive and $500 for collision) and higher than normal coverage for BI and Uninsured ($100k/$300k).

Leaky told me that Geico's 6 month for a policy very similar to mine would be $681. It is actually $516, but it correctly stated that Geico was the cheapest (which it was as of a month ago when I compared them manually).

Instead of an insurance comparison service, these guys should start an actual auto insurance company.

Nobody likes insurance companies, so there's certainly a market for an insurance company that people love.

Be ambitious. Build something big. Comparison sites are not a big or ambitious idea. Comparison sites are a feature of bigger platforms. If you're building a platform, call it that. Otherwise, build something bigger.

Insurance is one of the most highly regulated industries out there (even more so than banking). It's also almost entirely regulated by state insurance commissions (-> many arcane one-off regulations, and a fair amount of political games). Take the regulatory difficulties Uber, etc. are running into, and multiply by 100.

According to the article on pandodaily (also on the front page at the moment), that's part of what they are doing too.

http://pandodaily.com/2012/12/05/from-kidnapping-and-bribery...

Agreed. I thought that's what it was at first, and I got really excited :)

Me too! :(

"Empirically, the way to do really big things seems to be to start with deceptively small things."

http://paulgraham.com/ambitious.html

One tip for them would be to allow a user to upload driving record and insurance coverage information from the company a user is currently with.

My first thought is that companies would not want to forward data to a company that enables a current customer to possibly leave for better rates.

It might be boring, but affiliates make a killing with auto insurance. Just like Mint did with banks and credit cards. Killing.

Is there a place where I can compare car-insurance + house insurance + any other insurance among companies?

Most companies give discounts on bundling few types of insurances, and so it would be great if entire price could be compared. I am under impression that not all insurance companies provide full coverage for what people need, so just because car insurance is lower, total price may increase if you split the needs across few companies.

I don't think it's currently possible to do entirely online at the moment. Your best chance would be with an independent agent at the moment (though we're trying to change that).

I like that they'll monitor the profile and alert if a price drops. Even if they don't have the lowest on there, it's a good trigger for me to shop around again.

There's no way this is accurate for all locations. Some algorithms for insurance calculations are proprietary trade secrets and only the general information about them is filed with the states (not true for all states, but for many it is).

In other words, just going from the State filings is not going to take into account a lot of details that insurance companies are using to calculate your premium.

It depends on the state. If your state has crappy regulations, then you're probably right.

If you're in NY, CA, or MA, you're probably in good shape as those states have strong regulations.

Can we get congress, or at least state congresses one by one, to pass a law that says, rather than filing their rates, they must provide a web API for accessing them. That would make the records much more accessible to everyone and solve this comparison accuracy problem. It is definitely in the interests of the consumers.

Tried it, but the prices were no better than what I currently pay. Also the UI is horrible.

What language is the backend in?

Its interesting to see YC going after such a risky ideas. Perhaps its just a sign of huge cohones, which is good, or maybe just a pure desperation? I mean, they hit jackpot with AirBNB and decided to invested, despite the fact the co-founder was or still is on FBI scamers list [1] and he ran his scheme off of government servers that you and I had to paid for in tax-dollars.

But aside this, I get the deception here that they don't get pricing directly from Geico, but rather they calculate the price per Geico per State (if that is really true, because what stops them from harvesting the data off of a carrier website anyways and switch algorithm just in case they get subpoena or something - can you see a similar pattern of questionable legality of business practices with AirBNB?).

But the issue remains: what stops Geico from requesting their name to be removed from said website? After all, Geico is a protected trademark, and if Geico can prove that this website was providing incorrect information in regards to their rates, then they can claim that said misleading information is harming their business. To me, its a straightforward quick court case.

[1] http://gawker.com/5853754/the-seedy-spammy-past-of-airbnbs-c...

Side note: its really sad to think YC would go after such a business idea. Whats next? YC-founded youporn version 2.0??

EDIT: I never treated hackernews as a popularity contest. I always stay behind my word even if it may hurt someones feelings. I knew I will get heavily downvoted (which is fine) since YC is investing into this idea, but perhaps when you do so, maybe you can point out where I am being wrong, instead of just clicking down-arrow. That's kind of covardishy, if you ask me. :)

Trademarks are primarily to protect consumers, not companies. As long as you are referring to Geico, and not trying to name some other company "Geico", you cannot fall afoul of their trademark. The trademark is to make sure that you are referring to the right company, and that's all.

You're not being down voted because its a YC company, your argument just doesn't make sense as clarified by a sibling comment.

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