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Insurance involves having a large pool of good drivers to subsidize the bad drivers. So the money they spend to make the pool larger could make things better f
by jrockway 3y ago
Insurance involves having a large pool of good drivers to subsidize the bad drivers. So the money they spend to make the pool larger could make things better from you; more good drivers, they pay out less claims, they charge you less. It's one business where the "network effect" really matters, and so it's not a guaranteed waste of money like advertising other products is.
(For example, it really doesn't matter whether you drink Coke or Pepsi. Those ads are just inflating the cost of the product; there are no more efficiencies to be had in the production of sugar water.)
- gosub100 3y agoI assume there's some regulation against only insuring drivers with perfect records? Otherwise I think I would have heard of it by now. I see the logic you're using, but considering that almost nobody would have insurance if their lender/state didn't force them to, the same number of people would have insurance regardless of whether they advertised. It's a zero-sum game, no? Separately, the same ads that might attract good drivers to my pool could also attract bad, and sadly I suspect that the people who are persuaded by ads are slightly less intelligent and more risky behind the wheel.