# Why do insurance companies advertise so much? **URL:** \ **Category:** Cafe Society\ **Tags:** commercials-ads\ **Created:** [March 22, 2021, 5:07pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442 "2021-03-22T17:07:31Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 5:07pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/1 "2021-03-22T17:07:31Z")
I first noticed this when one company had mulitple campaigns, one of them being the caveman, which was a big deal, yet they had another one totally unrelated at the same time. A few companies have had this going on now lately. Progressive has a whole MCU level type thing going on, but they have other campaigns too that are unrelated. Liberty Mutual has the Limu, but also the statue of liberty stuff too IIRC. Is this some kind arms race in the industry? Why do they have to fight it out like that? ---
**Author:** ![Oredigger77](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/oredigger77/32/3181_2.png) [@Oredigger77](https://boards.straightdope.com/u/Oredigger77)\ **Post date:** [March 22, 2021, 5:11pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/2 "2021-03-22T17:11:13Z")
From what I’ve read very few people change their insurance company once they have one. So there is a huge battle to capture the new potential clients as the enter the market since you will basically own them for their lives. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [March 22, 2021, 5:31pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/3 "2021-03-22T17:31:05Z")
In most places insurance is pretty heavily regulated with regard to features and price and profit margin. Insurance companies _mostly_ can’t actually compete on product because to a significant extent they all provide the same product by law. When you can’t compete on product, you have to compete with advertising/brand strategies. Many industries that do a lot of advertising (cars, fast food, consumer packaged goods, insurance) share this feature: the products are really similar in most respects, so they compete on making you feel good about the product. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [March 22, 2021, 5:37pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/4 "2021-03-22T17:37:31Z")
Insurance is dependent on volume. The more young people it gets that don’t need reimbursement, the more profit. The jokey campaigns are aimed at the young to get them to sign up for insurance they otherwise wouldn’t think about. ---
**Author:** ![Just\_Asking\_Questions](https://avatars.discourse-cdn.com/v4/letter/j/ba9def/32.png) [@Just\_Asking\_Questions](https://boards.straightdope.com/u/Just_Asking_Questions)\ **Post date:** [March 22, 2021, 5:41pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/5 "2021-03-22T17:41:19Z")
> [@Oredigger77](#): > > From what I’ve read very few people change their insurance company once they have one. I’ve heard the opposite - that people change all the time. FWIW, my agent always marvels that I’ve been with Allstate continuously since 1977. Like people like me are as rare as people that walked on the moon. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 5:50pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/6 "2021-03-22T17:50:51Z")
For life Ins maybe. But Auto? Kids are surely not a prized demographic for that. And when they get in a jamup they’ll be switching companies. Well, maybe that’s it. (Just read Harpo Speaks last month) ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [March 22, 2021, 7:02pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/7 "2021-03-22T19:02:15Z")
Auto liability insurance is required in my [state](https://www.dfs.ny.gov/consumers/auto_insurance/auto_insurance_faqs). And in 47 others. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 7:12pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/8 "2021-03-22T19:12:20Z")
Still, kids are not a demo to chase for auto ins. You avoid them. ---
**Author:** ![Oredigger77](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/oredigger77/32/3181_2.png) [@Oredigger77](https://boards.straightdope.com/u/Oredigger77)\ **Post date:** [March 22, 2021, 7:22pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/9 "2021-03-22T19:22:46Z")
[This article](https://www.prnewswire.com/news-releases/average-driver-hasnt-switched-car-insurance-companies-since-2003-300115282.html) says that 7% of people stay with the same insurance company for more than 30 years so you are correct that someone with 40+ years is rare. On the other hand the article says that on average people stick for 12 years once they change companies with most people only shopping for new insurance when they buy a new car since the average person owns their car for [11.8 years](https://www.statista.com/statistics/185198/age-of-us-automobiles-and-trucks-since-1990/#:~:text=On%20average%2C%20motorists%20in%20the,from%2010.3%20years%20in%202009.) the numbers seem to line up. I was wrong that they own you for life but they do own you for a very long time. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [March 22, 2021, 7:48pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/10 "2021-03-22T19:48:58Z")
> [@drad\_dog](#): > > Still, kids are not a demo to chase for auto ins. You avoid them. There exists a premium rate for every demo that provides a profit margin. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [March 22, 2021, 7:50pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/11 "2021-03-22T19:50:39Z")
Nobody is talking about kids. The demographic is young people who either don’t have other insurance, are moving off their parents’ insurance, or are dissatisfied with their first insurance company. A group who is required to buy a product is the most desirable advertising target. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 9:08pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/12 "2021-03-22T21:08:36Z")
Young people who need insurance are not to be called kids… OK. There is a 4th category: Fired by your Ins Co. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 9:15pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/14 "2021-03-22T21:15:20Z")
> [@Exapno\_Mapcase](#): > > Insurance is dependent on volume. The more young people it gets that don’t need reimbursement, the more profit. I don’t think they look to younger people to make fewer claims. I can see the argument that they just want every young person they can get. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 9:16pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/15 "2021-03-22T21:16:11Z")
> [@FigNorton](#): > > As far as I can tell, you’re the only one who used the word “kids”. > [@Exapno\_Mapcase](#): > > Nobody is talking about kids. I’m not following your point. I was responding to someone else. ---
**Author:** ![FigNorton](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fignorton/32/5619_2.png) [@FigNorton](https://boards.straightdope.com/u/FigNorton)\ **Post date:** [March 22, 2021, 9:17pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/16 "2021-03-22T21:17:36Z")
I erased my post because it looked like an invitation to more pedantry. I wasn’t wrong. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 9:20pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/17 "2021-03-22T21:20:53Z")
I get it. You didn’t read the posts or know the context but wanted to make a snarky comment to me but it was wrong so you deleted it. ---
**Author:** ![FigNorton](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fignorton/32/5619_2.png) [@FigNorton](https://boards.straightdope.com/u/FigNorton)\ **Post date:** [March 22, 2021, 9:22pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/18 "2021-03-22T21:22:42Z")
Hardly, but this is rather more desperate pedantry so you have a good day. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [March 22, 2021, 9:26pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/19 "2021-03-22T21:26:38Z")
It’s a short thread with a factual question to knock around. I have made a few posts. In response to things. Where does this bitching at me come in? Maybe I don’t know what pedantry is for you. What is it? ---
**Author:** ![FigNorton](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fignorton/32/5619_2.png) [@FigNorton](https://boards.straightdope.com/u/FigNorton)\ **Post date:** [March 22, 2021, 9:29pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/20 "2021-03-22T21:29:39Z")
Here’s a better question: why are you dragging this out when I erased my post within 30 seconds. ---
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [March 22, 2021, 9:32pm UTC](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442/21 "2021-03-22T21:32:33Z")
Disclosure: I had one of the big “property & casualty” insurance companies as a client for several years. For purposes of this conversation, I’m talking about auto insurance, as (a) it seems to be what the OP is asking about, and (b) it’s where most of the advertising is done. Yes, younger drivers (i.e., those coming off of their parents’ insurance) are attractive, from the standpoint of they don’t necessarily have a lot of brand loyalty, and thus are more likely to be swayed by advertising. OTOH, as already noted, younger drivers tend to be expensive to insure, as they are (as a demographic group) relatively more likely to be in accidents, and get tickets. So, yes, insurance companies, _can_ offer them policies at commensurately higher rates, but a lot of those same younger drivers can’t afford a policy from a top-tier insurer at the premium cost that is offered (given their relatively high actuarial risk), so many of them wind up with a lower-cost company. And, yes, broadly, all auto insurance offers the same benefits, so the advertising tends to focus on a couple of side benefits: - Cost (i.e., “People who switched to us saved an average of $xxx”) - Customer service - Ancillary products and services (like Progressive’s Snapshot, State Farm’s Discount Double Check, Liberty Mutual’s Accident Forgiveness, etc.) - General imagery advertising – either trying to make the brand seem cool and non-stodgy (e.g., Geico, Progressive), or trustworthy (e.g., Allstate) [Next page](https://boards.straightdope.com/t/why-do-insurance-companies-advertise-so-much/938442.md?page=2)