Credit Karma announced on Tuesday (Oct. 2) that it was expanding in the insurance market, with members of the company in California and Texas able to shop for auto insurance.
In a press release, the company said customers will be able to see what they could pay in auto insurance based on what members are paying for the same coverage. Credit Karma said it is aiming to address the mispricing issue in the U.S. in terms of auto insurance policies. It plans to soon provide the ability to compare auto insurance with its more than 80 million members.
“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, in the press release announcing the new service. “We plan to do the same for insurance. We estimate that Americans are overspending on auto insurance by nearly $21 billion a year, and believe that bringing simplicity and transparency to our members will help them save.”
Currently, Credit Karma uses driver and vehicle data from the Department of Motor Vehicles (DMV) and other sources for its auto product, which aims to help members save money on auto loans, track the value of their car and check recall details. Since the launch of that service under a year ago, more than eight million members have used it. Now it is combining the DMV data with data from credit bureaus and public insurance rate filings to provide customers with insurance quotes.
“Our investment into auto has exceeded our expectations, and it’s encouraging to see such high engagement among our members,” said Rory Joyce, director of product management for Credit Karma. “Because auto insurance is a major expense of owning a car, building an insurance feature was a natural extension to help our members make financial progress.”