Here’s the situation: Just sold my Wisconsin home, my car in Wisconsin is about to be sold and I’ve yet to purchase a new one in my new home state. So I’ll lack car insurance. I don’t want to pay my rental car company’s expensive insurance rates. My Wisconsin insurer can’t help me – they don’t do business in California.

Who to call next? Of course! That clever Australian commonly known for his sage advice on car insurance. Never mind that he’s a lizard, and a cartoon, he’s a cracker-jack sales and service guy. I visualize his chartreuse coat and over-sized burgundy eyes first, then the name GEICO pops into my mind, true evidence of the power of effective advertising.

GEICO has more than a well-known name and brand characters. It also has a largely on-line business for selling insurance, a business model that makes sense in today’s 24-7-365 world. In far less time than it took to find a live voice at American Family on a Sunday telling me I’d be uninsured once the title is signed over to a new buyer at 8am Monday, Geigo’s telephone representative sold me the auto-insurance policy for my situation.

Sounds like another 21^st century start-up. But GEICO is no recent business model disruption. Rather, the times have caught up with it. Established in 1936, the company originally served government and military employees, recognizing they had lower risks than others and therefore warranted lower rates, rates that drew GEICO’s original customer base. Best business practices are in the company’s DNA.

In 1980 (as technology made banking possible 24-7-365 from any ATM machine), GEICO offered live, informed agents available by phone 24-7-365. I got through to a GEICO agent easily, a sharp contrast to my experience with AT&T, physician offices and other service providers. Aligned with the times, GEICO is the first company to sell vehicle insurance policies using mobile devices.

GEICO saves money by conducting its business largely on-line and by phone, competing against companies that sell through employed or independent agents. GEICO redeploys the cost savings into advertising and purportedly lower rates.

The model is working. 5 million customers in 2002 grew to 10 million in 2010, making GEICO the third largest issuer of auto insurance policies in the country. Now serving all 50 states, it’s also the fastest growing. Smart moves into adjacent vehicle markets – snowmobiles to watercraft to antique collector cars – have expanded its business. GEICO also sells life, home and umbrella insurance that is underwritten by GEICO partners. And my on-line rep was savvy enough to also suggest home rental insurance. These extensions smartly leverage GEICO’s sales and general administrative expenses, driving up its value.

The smart business model attracted Warren Buffet as an investor, whose company Berkshire Hathaway,Inc. now owns GEICO. Buffet also values the financial float that insurance companies create from premiums collected before payouts are made.

GEICO reminds us that in today’s open economy, on-line businesses can work as long as they provide stellar customer experiences and value is not lost in the absence of physical contact. GEICO must meet the experience standard on two levels – with the client when it sells insurance and manages customer service and with its large array of business partners that do the “direct” experience work – service repair, repair estimates, roadside service, etc. GEICO’s business model only works if it attracts great partners to offer GEICO customers fast and effective field service in the event of an accident or car failure, not just great service on-line. More recently, GEICO offers the opportunity to work with sales agents in field offices, a sign that it understands multi-channel marketing and the need to build additional business models (e.g., to serve business owners) to continue to grow.

I watch my 21-year old daughter’s on-line life with amazement. My intern told me she rarely shops for clothes in stores anymore, unless it’s a truly special purchase. And my move to California reminds me of how much I appreciate expeditious and effective on-line help. The 20 minutes it took on the phone to cancel my AT&T landline could not compete with this test—wonderful people backed by the worst IT systems in the world, for a company of its size. Instead of buying T-Mobile AT&T should recognize that many of their customers are wireless and internet/land-line customers and create one IT system to serve them effortlessly. But I digress…

All these observations lead me to bet on GEICO as a winning business model for consumer insurance and an example many other industries will follow in our wired around-the-clock world.