Why do car insurance companies advertise so much?

Eeezee

Diamond Member
Jul 23, 2005
9,923
0
0
It's marketing. It's supposed to work... I don't know if it's that effective, but I'm sure they make more money from marketing than it costs to have a marketing department.

Insurance companies are businesses, they want to make money. Businesses advertise to increase revenue. It's as simple as that.
 

rockyct

Diamond Member
Jun 23, 2001
6,656
32
91
I think it has to do with the fact that car insurance commercials are either low budget or just bad in general, so you notice them more. I hate those stupid cartoon ones.
 

Nitemare

Lifer
Feb 8, 2001
35,466
3
76
Originally posted by: OdiN
They have to do something with all that extra money you're giving them.

my monthly premium is almost as much as my car payment and I've had no at-fault accidents or moving violations.

Sad thing is it is still the cheapest
 

Modeps

Lifer
Oct 24, 2000
17,255
44
91
Because there's a lot of competition?

PS: Esurance commercials are stupid.
 

imported_glacier

Junior Member
Dec 3, 2007
20
0
0
Insurance companies need to attract more business as part of risk diversification i.e. "the law of large number".

Some companies may even depend on 'cash flow underwriting' to survive.
 

Lonyo

Lifer
Aug 10, 2002
21,939
6
81
Originally posted by: Nitemare
Originally posted by: OdiN
They have to do something with all that extra money you're giving them.

my monthly premium is almost as much as my car payment and I've had no at-fault accidents or moving violations.

Sad thing is it is still the cheapest

Presumably either your car is cheap, or high risk.
If it's the latter then you should have gone for a different car, if it's the former than it sucks, but that's the way insurance companies work unfortunately. Luckily mine is dropping pretty quickly. 39% drop after the first year, then a 33% drop after the second, woo.

I'm looking forward to hitting 25 and hopefully having cheap insurance on almost anything.
 

Xavier434

Lifer
Oct 14, 2002
10,377
1
0
Cut throat industries are like this. It is all about competition. It is the same reason why you get so much credit card junk mail.
 

Anubis

No Lifer
Aug 31, 2001
78,716
417
126
tbqhwy.com
Originally posted by: Nitemare
Originally posted by: OdiN
They have to do something with all that extra money you're giving them.

my monthly premium is almost as much as my car payment and I've had no at-fault accidents or moving violations.

Sad thing is it is still the cheapest

OUCH

i enjoy my 22$ a month car insurance payment

WOOT GEICO
 

Nitemare

Lifer
Feb 8, 2001
35,466
3
76
Originally posted by: Lonyo
Originally posted by: Nitemare
Originally posted by: OdiN
They have to do something with all that extra money you're giving them.

my monthly premium is almost as much as my car payment and I've had no at-fault accidents or moving violations.

Sad thing is it is still the cheapest

Presumably either your car is cheap, or high risk.
If it's the latter then you should have gone for a different car, if it's the former than it sucks, but that's the way insurance companies work unfortunately. Luckily mine is dropping pretty quickly. 39% drop after the first year, then a 33% drop after the second, woo.

I'm looking forward to hitting 25 and hopefully having cheap insurance on almost anything.

car was relatively inexpensive, a 5 year old used Civic. I've gotten in two accidents both totals, neither one was my fault(ex-wife was 50% liable once and the other driver was 100% liable, but both are on my record, so I get raped in premiums.

The way I figure it is excluding the interest on the car, I will have paid more on insurance than I did on the car.

Mine is with Geico as well and I chose the highest deductibles that the state would allow on collision and comp..
 

FoBoT

No Lifer
Apr 30, 2001
63,089
12
76
fobot.com
churn
people do switch , back and forth, apparently

i have been with Geico since 1987 and have no intention of switching
 

alkemyst

No Lifer
Feb 13, 2001
83,967
19
81
unlike homeowners insurance where people tend to keep it perpetually due to it being escrowed most of the time and a PITA to change...car insurance is actively shopped by many people sometimes every 6 months or more.

I knew a couple of people that were always telling people to switch to this or that company every couple of months.

Most people shop price in insurance, you needs to know the rating of the company they are getting if they hope to have a need to actually use the insurance.

For some they choose the worst company because they don't intend nor care if they have coverage.