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Have you ever wondered how almost every car insurance company can advertise such drastic savings over another company? Although they each have their own catchy songs, mascots, or other advertising gimmicks, the message each company leads you to believe is the same: “Switch to us and you will save!“ The ads usually go something like this…
“People who switch to us, save an average of $300 on their car insurance bill”.
Most people hearing this statement the first few times (especially when distracted by a witty skit starring an amphibian or disillusioned caveman) understand it to mean you will automatically save if you switch insurance carriers.
But how can each company promise the same thing? Couldn’t you just keep switching from one carrier to the next until your yearly premiums where $0? Of course not; it’s all about semantics my friends! Lets take a closer look at the above statement.
“People who switch to us, save an average of $300 on their car insurance bill”.
Not only or they talking about an “average” (some people save more, others save less), they are also referring only to people who have “switched”. There may have been millions of people that called for a quote and didn’t “switch”, and only 10 people who did switch and that each saved $300 “on average”.
Regardless, many of us buy into this misconception and call for a quote to find out how much we will save.
Are insurance companies being dishonest? Perhaps, but their practice is certainly not illegal (at least not yet). But it is an illustration of how easily manipulated some of us can be by unscrupulous marketing agencies and the corporations that fund them.
{ 14 comments… read them below or add one }
I wouldn’t quite call it dishonest. They are stating a fact because the people who did switch, did save an average of say $300. All they are trying to get the consumer to do is get a FREE quote. Now if they were using that pitch line and it cost $5 to get a quote, then I would think they are being dishonest. It’s just a marketing ploy that seems to work well for them. I know I get quotes every few months because they are always changing.
Would you call it misleading or deceptive? I don’t believe the marketing agencies around these ad campaigns are naive enough to not realize many people hearing these ads think they are hearing something else.
They may be slightly misleading but I still do not think it is going to hurt the consumer. The only thing they are going to be out is their time. If they get a quote through one of these companies and the rate is higher, they just do not switch. No harm done.
On the other hand, I do not agree with some of the marketing ploys of Allstate. They package their plans with terms such as “accident forgiveness”, “deductible rewards”, “safe driving bonus”, etc. This just adds more costs to the policy that people may not know about. It ends up costing them more in premiums than they save if they use these features. Not that is what I call misleading.
AIG even had a really aggressive ad campaign going a few years back. I forget exactly how the ads went but look at were they are now.
I guess we all pay in the end!
I’ve always felt this stuff was kind of deceptive. I get that facts are facts, but these companies are definatly spinning the data to make them look much better than they actually are. I’ve called most of them, and have never been able to save more than a couple of percent. I must already have a good deal or something like that.
Good post, glad to have found you site and look forward to digesting more in the future!
Best,
TAM
AIG commercial: http://www.youtube.com/watch?v=yyN8HrsAFk8
My own experience is that my current insurance company is still the lowest, and I’m happy with the service…but that doesn’t mean I don’t check occasionally to see if there might be a better deal out there.
I don’t know if I agree with this statement: “Most people hearing this statement the first few times… understand it to mean you will automatically save if you switch insurance carriers.”
Just as with anything, if you don’t do research, you won’t know. If you don’t do a quote, you won’t know. And maybe that is an accurate statement saying that of those who chose to take the time to get a quote and switch, saved that much.
I can honestly say that our insurance company does have irritating commercials… I can’t stand the cavemen ones anymore… but if it had not been for those commercials, I would have not bothered checking into it. And I’m glad I did, because we are saving about $300 actually.
“There may have been millions of people that called for a quote and didn’t “switch”, and only 10 people who did switch and that each saved $300 “on average”.”
I’m not sure what the millions who didn’t switch have to do with it. If millions DID switch, but only 10 saved, that would be meaningful. The part we’re missing from your example is how many total people DID switch. The fact that many people call, but few sign up may say more about the ineffectiveness of their sales staff than the honesty or dishonesty of their marketing campaign… and either way it has no bearing on whether 10 people saving an average of $300 is high or low based on the number who actually switched.
Thats awesome that you saved $300 Amber! Pretty ironic too!
I guess there are those who are were thankfully mislead (or not mislead) into calling one insurance company over another to find out if they will save money or not.
Would Geico be as successful as they are today if their ads said “Call us for a quote and there is a possibility that you will save money”?
Such practices should be made illegal and everyone including companies should be educated, taught and “forced” to be honest, sincere and modest.
ALLSTATE just increased my car insurance monthly premium by $3. They told me that this was caused by me losing a 18 month limited time discount of some sorts, that I have fiund NO record whatsoever when I signed up with them 18 months ago. They sent me a $18 safe driving bonus check, which, if I cash it, will mean to them I accept my new charges. I asked them to remove accident forgiveness and only leave 1 accident forgiveness, they told me that’ll save me about $10 a mont yet they started charging me still they high rate. DESPERATE!
Ha! Sounds like another suspicous tactic by the insurance companies! “Cash this check from us, but remember, if you do your rates are going to increase”!
Chadwick drop Allstate quickly!!! That is wrong what they did. I’m an insurance agent and will teach you the basic of how to save on auto insurance. Most all insurance companies have close too or same rate. You need to know what you are buying in order to save money. The more the add on’s on your policy the more commission we make off your policy. I’m more into having a happy long term customer with earning a small commission as long as my customer knows what coverage’s they are buying. This economy is tough right now and believe me I’m on your side and can help you save!!!
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I agree, automobile insurance companies are more competitive than ever to earn your business! Call around and see what you can get! Maybe you really can “save a lot of money” by switching to Geico!