geico customer service

Geico customer service

GEICO (Government Employees Insurance Company) is the second largest company for car insurance in the United States. GEICO carries out its work in all 50 US states and the District of Columbia.

GEICO began its history back to 1936, when the insurance company manager for US troops USAA Leo Goodwin and his wife Lillian decided to create their own company selling automobile insurance. The target audience Goodwin chose the civil servants and their families – at the time a very profitable segment of the market and stable source of income with very high salaries. Based on these consumers it was given the name, even though it had nothing with the state and government services.

Nevertheless, the business began to grow, especially after 1937, when Leo Goodwin moved the company’s headquarters in Washington – a city that is home to most public servants. Unlike the vast majority of insurance companies use an agent for the sale of insurance, the GEICO preferred that customers turned to it themselves. To this end, it has opened a network of offices and invested heavily in advertising. The savings on the funds invested in the marketing agency fee payments. In addition, the company can offer customers a lower rate than most of its competitors. The low price was considered to GEICO major competitive advantage and differentiation from the other market players.

For 35 years the company has gradually expanded its business, and the beginning of the 70s of the twentieth century has become the fifth-largest US auto insurance company. But then the GEICO leadership committed widespread at the time the error: before the crisis in 1973 has invested too much money in the expansion. From bankruptcy in 1975, the company saved a group of friendly investors, organized by a little-known at the time, Warren Buffett. Future multi-billionaire and investment guru met with GEICO in the early 40-ies of XX century as a student. It is with investing several thousand dollars in shares of the company began to increase his wealth. Thirty-odd years later, Buffett repay GEICO good for good.

The first acquaintance of Warren Buffett with GEICO took place at a time when he was a student at Columbia University – Buffett’s mentor, Benjamin Graham was chairman of the board of directors of this company. Everyone knows the story about how Buffett as a young student, came early on Saturday morning to the office and knocked on the door as long as the doorman would not let him. The only person caught up in the day in the office, was Lorimer Davidson, Head of Investments, who later became CEO. Lorimer Davidson for five hours, said Buffett Company GEICO. Practical knowledge of the insurance business, resulting in the five hours have been very valuable to Warren Buffett.

Activities GEICO was based on two simple but quite revolutionary concepts. First, if the company insures only those drivers who rarely get into accidents, it will be offered fewer claims for payment of insurance claims. Second, if a company sells insurance policies (without the participation of insurance agents) directly to customers, it can significantly reduce the amount of wastage.

In the 1950s and 1960s the company GEICO flourished. Later, however, its leaders began to make mistakes. For several years, the company attempts to expand the customer base by creating low (below cost) prices for insurance policies, and by easing conditions for the conclusion of insurance contracts. In addition, for two consecutive years in the company admitted serious errors in calculating the amount of money required for the formation of insurance reserves (of which paid the insurance compensation). The combined effect of all these errors and miscalculations is that by mid-1970 once-solid company on the verge of bankruptcy.

When in 1976, GEICO company’s share price has fallen from 61 to $ 2 per share, Buffett began buying them. For five years, while maintaining an unwavering confidence in the internal strength of the company, which was able to maintain unchanged the main competitive advantages, Buffett invested in GEICO shares of $ 45.7 million.

When in 1965 an investment firm Buffet Partnership took control of Berkshire Hathaway company, shareholders’ equity was reduced by half, and losses of Berkshire exceeded 10 million dollars. Warren Buffett and Ken Chace, who ruled this textile company, worked hard at correcting the situation in the textile factories of the company. Nevertheless, the results were disappointing: the return on equity was barely a two-digit value.

In March 1967, the company Berkshire Hathaway for $ 8.6 million issued shares acquired two insurance companies with headquarters in Omaha – National Indemnity Company and National Fire & Marine Insurance Company. This marked the beginning of an extraordinary success story. Berkshire Hathaway as a textile company could no longer continue the struggle for survival, but Berkshire Hathaway investment company was ready for a meteoric rise.

According to data for 2004, Berkshire Hathaway owned 38 insurance companies, including the two largest companies – Government Employees Insurance Company (GEICO) and General Re, each of which, in turn, has several subsidiaries.

By 1991, the company Berkshire owned almost half (48%) GEICO capital. Buffett’s interest to the GEICO insurance company increased in parallel with the spectacular growth of its effectiveness. In 1994, Berkshire began serious discussions regarding the purchase of the entire company GEICO, and a year later it was announced the deal. By this time, of Berkshire owned a 51% stake GEICO. Berkshire Management agreed to acquire the remaining shares for $ 2.3 billion. This was the period when the insurance companies are struggling to improve profitability, and most investors could only watch from the side on their stock prices. By the time, the process of documenting the transaction occurred in 1996. This year, GEICO has completely passed into the ownership of Berkshire Hathaway and has become one of the divisions of the company, which is controlled independently of the other insurance entities Berkshire.

The company’s profitability is directly dependent on how long the policy holder uses the services of the company. That is why GEICO management works hard to form long-term relationships with clients. When in 1996, Warren Buffett took over the leadership of GEICO, he introduced a new system of material incentives, which encouraged such efforts. Half of the premium paid for the fact that employees of the company managed to keep customers at least a year. The other half of premiums paid to attract new policyholders. The same system is used in the framework of the system of remuneration of employees through participation in the profits.

GEICO average customer – a customer who has insured for at least one car each year pays premiums in the amount of $ 1,100, while drives car very carefully. As Buffett once remarked, the economic characteristics of this formula is quite simple: “The incoming cash flow exceeds outgoing.”

To contact GEICO customer service, you can dial the following phone numbers or visit the website www.geico.com

GEICO phone number (general)
1-800-861-8380 (24/7)

GEICO phone number for emergency road service
1-800-424-3426

GEICO phone number for Auto Claims (glass)
1-800-510-2291

GEICO for military customers phone number
1-800-MILITARY, 1-800-645-4827

GEICO phone number for people with impaired hearing service (TDD)
1-800-833-8255

GEICO Insurance Overseas phone number
1-800-248-4998

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