The Ranting Man

July 26, 2010

Auto Insurance Discounts are a Total Lie

Filed under: economics — therantingman @ 8:23 pm
Tags: ,

What is all this shit about saving money on car insurance? From the sound of the ads every time you switch you can cut your bill in half. What about the coverage? Does anyone even care about the SERVICE they are supposed to be buying?

What they don’t tell you in the commercials is that you don’t get discounts every time you switch. They also don’t tell you that every year your premiums usually increase anyway. You may get discounts and teaser rates, but the insurance companies build in ways to offset the discounts they have to give. Most, if not all insurance companies are public, and they are beholden to shareholders. Cutting into profits is frowned upon.

And you ‘may’ save up to X%. MAY being the key word. Most people don’t save the maximum. In fact, they try and give just enough to get you to switch. The issue is growing their customer base, and selling insurance is HARD. The high cost of acquiring new customers with the service makes cost savings an easy marketing crutch.

The truth is that you can save MORE money by developing a history with a company. I have had car insurance with Allstate for years, and when it came time to get home insurance I got a BIG discount on that. I also got great discounts for adding another car. This was because I was a REPEAT customer, not because I switched from elsewhere.

I want companies to sell me on what they actually do. I also want people to understand that the money you pay for something is NOT the actual cost. But that requires people to think, and I’m not sure people want to think.

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