Consumer-facing financial health company Credit Karma unveiled plans for an auto insurance comparison tool. Starting today, members in California and Texas can determine if they are paying too much for car insurance based on how much similar members are paying for comparable coverage.
The move aims to help members make the best decision about their auto insurance, coverage that Credit Karma estimates Americans overspend on by $21 million each year. The new tool builds on Credit Karma’s Online Vehicle Center. Launched in November of last year, the Online Vehicle Center is an informational dashboard that helps consumers manage and organize their vehicle-related finances and information by leveraging driver and vehicle data from the DMV.
The Online Vehicle Center tool received significant traction since launching just under one year ago; more than 8 million members, 8% of Credit Karma’s total user base, have synced their vehicle information with the platform. The new comparison aspect of the tool leverages DMV information and combines it with data from credit bureaus and public insurance filings to estimate insurance quotes. Unlike traditional insurance quote comparisons, which require users to input 30 to 40 fields of data, Credit Karma generates a comparison in real-time.
“We built the auto experience to help put money back into the pockets of our members. With our refinance experience, we’ve helped our members save nearly $150 million on their auto loans in under a year,” said Kenneth Lin, founder and CEO of Credit Karma. “We plan to do the same for insurance.”
Another aspect of the new tool that’s worth mentioning is the education piece. Credit Karma will offer users an interactive experience that shows how certain factors such as moving violations and credit score can impact rates. The San Francisco-based company said that it plans to roll out the new tool to users in more U.S. states “in the coming months.”
At FinovateSpring 2009, Credit Karma CEO Ken Lin demonstrated the company’s platform, which offers free credit reports from Equifax and TransUnion, and seeks to serve as a hub for users to monitor their financial health. Since it was founded in 2007, the company has expanded not only into vehicle information management and monitoring but also identity monitoring and tax filing. Most recently, Credit Karma acquired mortgagetech startup Approved to move beyond its basic mortgage rates comparison tool.