Insurance Advertising: Your Premium Dollars at Work

Insurance advertising gives insurance companies a chance to convince you that they are the best.

Like it or not, you may have paid for part of that terrible insurance advertising commercial you just watched.

In many states, it is said that there are two seasons: winter and road construction. With road construction season in full swing right now you may have seen the signs that pop up on the side of the road. The signs that give you the details of the project, and then includes the phrase “Your Tax Dollars at Work”.

You can see the very same message with insurance companies; they just don’t broadcast it as plainly. But each time you see an insurance commercial, that’s your insurance premium dollars at work.

Insurance Advertising Over Time

Car insurance companies have been around since the late 1800s. The very first insurance company to sell insurance was Travelers Insurance Company in 1897. Back then there was little competition in the car insurance field though, for two reasons.

First, there were very few drivers on the road at that time, so there weren’t all that many car insurance companies anyway. Second, drivers weren’t forced to purchase car insurance until 1927 and many didn’t.

Today, the car insurance scene is much different. Now, we have insurance companies practically tripping over each other in the race to get your business. They rely heavily on insurance advertising to convince you that they are better than the other insurance company and hope that you will believe them.

Then once they have you as a client; they take part of your insurance premium and pay for more insurance advertising to try and convince more drivers to buy insurance from them.

Who Spends the Most on Car Insurance Advertising?

GEICO, by far, spends more on car insurance advertising than any other company out there. Per SNL Financial, GEICO spent 993.8 million dollars on advertising in 2011. This is an increase of 10% over the 902.7 million that was spent in 2012.

Compared to the other insurance companies, GEICO alone spends 1 out of every 6 dollars spent in the insurance industry on advertising (onlineautoinsurance.com). With how frequently GEICO churns out new commercials the amount they spend is not surprising.

Does the Insurance Advertising Make a Difference?

For some companies it does and for others it doesn’t. GEICO is the top insurance company on the Fortune 500 list, and they are also the insurance company that spends the most in insurance advertising.

On the other hand, some insurance companies can spend millions on insurance advertising and see very little increase in business. For example, $45 million was spent on advertising for Esurance in just the first quarter of 2012. When the growth numbers came out, there was barely a difference between this year with the large advertising push, and the same time the year before (SNL Financial).

Leave us a comment and tell us if your insurance company is putting your premium to good work or not on their insurance advertising.