Decepticons: Auto insurance

This is the first in a series of posts about marketing claims that are true, but misleading.

You’ve heard the ads:

Drivers who switched [to Allstate] saved an average of $396 a year

Well, yeah. Why else would they switch?

The marketers want you to misunderstand the statement and think that if you call up Allstate and get a quote, you’ll save $396 a year, but that’s not the case. The statistic tells you nothing about the average savings (if any) of people who consider Allstate.

If you call an insurance company for a quote, and their quote is $200/year more, would you switch? Of course not. If it was $15/year less, would you switch? Probably not, unless you were already unhappy with your current company. The only people who switch are the people who are going to save a substantial amount of money by switching. That might be 90% of the people who call, or it might be 5% of the people who call. But those lucky people are the only people who make it into the statistic quoted in the ad.

All of the insurers could make a claim like the one quoted above, and they’d all be right. But that doesn’t mean they’re all cheaper than everyone else.