Coverage Inc., a San Francisco-based company that markets auto insurance on the Internet, is up for sale.Coverage is in active discussions with a number of companies, including several insurance companies and an "integrated financial services company," says Jon Kelly, ECoverage's vice president of marketing. The company also is pursuing talks with several software companies, but Kelly declined to identify potential suitors.

"Given the current status of the financial markets with respect to Internet companies, the private equity environment is very difficult," he says. ECoverage last year had been pursuing financing in the range of $50 million, Kelly says.

"We had a lot of interest from a number of players, but everyone was focusing on how their investment would translate into a guaranteed financial return, and that's difficult in the current environment."

Kelly declined to say exactly how many auto policies have been sold by the company, adding that the number "is in the thousands, but less than 10,000."

The policies are issued by Security Insurance Co. of Hartford, a company that's owned by Royal & SunAlliance USA.

Last year, another San Francisco-based online insurance company Esurance Inc., was acquired by Folsamerica Holding Co. Inc., when Esurance was rebuked by the lead investor of a proposed third round of venture funding.

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