Saving the Insurance Consumer.

• Position: [GUEST FEATURE]

INSURANCE CONSUMERS DESPERATELY NEED TO BE SAVED... Saved by those of us who care about their engagement with our industry.

As the world has changed, more direct advertising to consumers is occurring in multiple media forums. Self-service engagement has been touted as having the advantage of an investment of "15 minutes or less." Price is often portrayed as the ONLY important criterion in the insurance purchase decision. Many direct advertisements (on-line, television, and radio) tout the four pillars of easier, faster, cheaper better. These are all misleading to the consumer in one way or another. Examples of price driven purchasing:

* Progressive's Flo "Name Your Price Tool" allows the consumer to pick the price they want to pay first and see the coverage after the fact. Moving along the price bar does not display changes in coverage until the price is selected by releasing the mouse thereby clearly making price the primary decision criterion.

* Online quoting systems gather basic information then simply produce a listing of insurance companies and premiums, the implication being that there is no difference between the policies and practices other than price. One such online vendor included a statement that appears to be a violation of most Unfair Trade Practices laws: "All auto insurance is exactly the same. It doesn't matter what company you get it from. It's just a question of finding the lowest rate. But the reason these companies spend so much on advertising is that there are millions of idiots in this country who actually believe that there is not a difference between different brands of auto insurance. These people have not yet figured out that they are being lied to, that all auto insurance is the same."

* Insurer advertising often centers on catch-phrases that mislead consumers into believing that coverages are identical between products when the reality is, as explained below, coverage variations among policies are often significantly different. For example:

- "You get the SAME COVERAGE, often for less."

- "SAME COVERAGE, better value."

- "SAME COVERAGE, more savings."

Consumers do not have an opportunity to see the coverage contract form of insurance until AFTER making a decision. Consumers should have the opportunity to see the actual contract of coverage for transfer of risk before the purchase decision is made.

The failure of these self-service models and misleading advertisements is to not provide the consumer adequate...