I can’t watch TV without seeing another funny insurance commercial. The problem is, insurance is not that funny. And it’s way too complicated to explain in a 30 second spot.
Captive agents work for a single captive carrier insurance company, independent agents work for clients and offer products from multiple insurance companies.
Here’s what you really want from insurance:
- A program suitable for your situation
- A carrier with a current appetite for your risk
- A contract with the right limits, coverages and terms
- A carrier with quality claims performance and service
- An experienced unbiased agent who will put it together for you
For captive carrier advertisers, all that stuff is way too busy to put in an ad. In addition to the humor, they sometimes throw out a gimmick so you’ll think they’re unique. Without naming specific companies, let’s have a closer look at some of these gimmicks:
Price
Does it make any sense that all the carriers can save people $500 when they switch among each other? Of course not. But many insurance companies can advertise it that way because their footnote reads “for people who switched, saved and completed our survey.” Let’s think about that. The carrier isn’t including anybody who didn’t switch or didn’t save, and may only be sending the survey to people who saved a lot. And the survey isn’t normalized for identical coverage. So say one client moves from California to Nebraska and saves $500 when he switches from Company A to Company B. And another client saves $500 when they switch from Company B to Company A after their wild teen got his own insurance. Both companies can now run ads about saving $500 against one another, even if they both have the exact same rates for everybody!
Accident Forgiveness
In this one you pay extra for an “upgraded” policy which lets you off the hook for an accident if all the drivers on the policy have a 5 year clean record. It’s like insurance on top of insurance…it’s not clear if it’s worth the extra premium if you don’t have an accident. And in a bit of bait and switch, they do a lot of advertising for accident forgiveness in California but the little footnote reads “not available in California.”
Plug-In Device
This one gives you a discount if you agree to having a device installed in your car that lets your insurance company monitor your speed, braking, turn safety, mileage, etc…
Sounds like fun…just like having a police officer looking over your shoulder from your back seat 24/7. Seriously, is there anybody out there that wants this?
Loyalty
No company advertises this but there is a rumor floating around that carriers will treat you differently if you’ve been with them for decades because they have special knowledge about what a good driver you have been. It isn’t true. All carriers have access to the same database of claims and violations. One possible exception is for people over age 80…carriers might not write people that age as new business but might be hesitant to cancel without good cause because of age discrimination concerns.
Claims Performance Surveys
One carrier posted survey results showing 4.8 out of 5.0 satisfaction with claims. I found another survey on the same carrier showing 1.7 out of 5.0. Another carrier was sending surveys to “selected” claimants offering a nice raffle prize for completing their survey.
The reality is few clients even have claims and even fewer have claims across comparable multiple carriers, so all consumer claims surveys are suspect. Who sees a lot of claims and can make a judgement on performance across carriers? Independent insurance agents.
Experience
It’s well known in the insurance industry that independent agents have more relevant expertise than captive agents. That doesn’t stop some captive agents claiming they are “experts” who work on your behalf. Interestingly, a well-known carrier was recently fined over $25mm by the State of California for falsely claiming they worked for their clients. Captive agents work for their insurance carrier parent companies, independent agents work for their clients.
Bottom Line
Insurance marketing is intensely competitive and billions are spent on ads that can easily mislead. Ironically when consumers make a mistake it’s usually with the bullet points above and not about price. This was shown emphatically after the Santa Rosa and Paradise fires where people found their insurance limits were too low to rebuild. What happened? Somebody was looking for a low price and not asking the right questions.
My job is to get you the right insurance at the right price and get you protected. You can then feel free to ignore all the funny ads and their little gimmicks.
Make it a great day!
Carrie