As someone who sells car insurance leads for a living, this is an interesting discussion.
First, Geicko isn't ranked number 1, affiliates who mask themselves as Geicko are. In high rewards markets like insurance (where 30% of the overall price of insurance goes to affiliates) it's actually about which affiliates convert the best and have the best payout. Those SERPs are dominated by black hat SEO. None of that is organic.
The larger issue (percentage of the page dedicated to SERPs vs ads aside) is that Google's formula worked best in a world where people weren't trying to game it. In the end it breaks down to relevance and links.
Relevance is based on tags and keywords, which everyone can get a perfect score on. So in the end it comes down to links.
Is a link there because someone just loves the site, or because some SEO schmuck built it? There are correlations, but there's really no way of knowing. The key to spam is mimicking a human process closely enough that a computer (or algorithm) can't tell the difference, then making that scale.
Google does manually review the SERPs for the highest grossing terms basically daily to try and find foul play, but those can be beat, too.
So why doesn't Google just manually find and serve up the best pages of content? Because you just described Yahoo.
So it's a very complex game that evolves every day as both parties advance and become more sophisticated, often in response to each other. If you think you can do better you either have to out-engineer Google or find a way to rank sites based on something other than links.