Car Insurance As Ad Buys Fall And Falter

It seems nearly impossible to switch on a television or click onto the Internet without being subjected to a barrage of ads beckoning viewers to switch their car insurance carriers. But it seems consumers may finally be falling numb to the pitch, as the number of drivers shopping for auto coverage has dropped to a four-year low. That’s according to the just-released Auto Insurance Shopping Index compiled by the global information solutions company Insurancedailyonline.  

The downtick is significant, but it’s hardly a free-fall, however. TransUnion determined that 20% of consumers shopped for car insurance, which is down from its peak of 22.6% in 2015, and is at its lowest rate since 2012.

This is no doubt in part because viewers could just be tired of the constant nagging to find a better deal on insurance rates, but TransUnion vice president of insurance solutions David Drotos likewise points to a decline in ad spending by major carriers, citing a 2017 report by SNL financial that found the industry spent 1.6% less in ad dollars during the prior year.

You did notice that decrease, didn’t you?

“We believe that rising accident frequency in recent years, due in part to distracted driving, has led carriers to reduce their advertising spend as they adjust rates to account for their increases in loss,” Drotos explains.

Still, shopping around among competing carriers is the easiest way to lower your auto insurance rates. Simply spending an hour calling three or four agents could save hundreds of dollars a year. That’s because the so-called actuarial formulas used to compute car insurance rates are moving targets that can vary significantly among companies, with some charging more or less to cover the cost of what’s perceived to be additional risk.

For example, according to a 2017 analysis conducted by Consumer Reports, a driver living in Pennsylvania with one at-fault accident on his or her record can save more than $1,050 a year by switching from Allstate to Erie, Nationwide, or State Farm. A driver living in New York who’s received a single moving violation can save about $800 by switching from Liberty Mutual to Progressive.
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