…the total number of average claims that could have been paid if they hadn’t spent money on the prime time TV commercial featuring actors and pro athletes, etc
The money companies spend on advertising isn’t just thrown away. They wouldn’t be spending the money if it didn’t net them a return.
Same with charity advertisement.
That argument works for like, Pringles, not something you generally are legally required to have. If they’re required to spend money on advertising just to remain competitive, that sounds like you could severely restrict all insurance company’s ability to spend on advertising and save everyone money.
It works with things you are required to have as well.
Insurance is a varied field from legal minimum insurance to something that will actually protect your family. Since it is so varied, advertising helps being people in. I know there are a couple of car insurance companies that don’t advertise, but they are also very picky on who can get their insurance.
Exactly. They want to bring in exponentially more premiums than what they spend on advertising, and the new premiums are what provides the cash to pay other policy claims. It’s really kind of an accepted form of Ponzi scheme. They are gambling that they will find enough people who will never need to make a claim in order to afford the few that do.
You can advertise without paying millions to people who already have millions. And forcing them to reveal the cost to consumers isn’t preventing them from advertising.
This is why you should get insurance through an independent agent. There are companies you’ve never heard of that do auto/home/life insurance for better rates. The same is true of mortgages.
Be mindful that small agents can screw you over just like any insurance company.
Look out for yourself and ask questions
True, especially “agents” that only use one or two companies.
Eh… I’d be wary of small insurance companies. Sometimes they don’t like to pay. Or at least not as fast.
But if they didn’t spend money on those people how would you know they exist and spend your money on their policies?
Given that in most places in the US you’re required to have auto and home insurance, somehow I think people would find them. Knowing that some NFL player stans for Progressive doesn’t give me any information on the quality of the company.
Familiarity breeds trust. They aren’t trying to sell you insurance. They are trying to get you to think of their name when you shop for insurance. They want you to see Progressive and think, “Yeah, that’s a company I’ve heard of.” If you were choosing between two brands equivalent, and you had never heard of one of them, most people will pick the one they have heard of. That’s why 90% of insurance commercials are just repeating the name of the company and words like “trust” or “value”.
I understand how advertising works, I’m saying that I would like to choose for myself instead of having name recognition forced into my brain cells.
I would also like to have no advertising.
