Insurance ad review series: Liberty Mutual
I wouldn't call it
"false" advertising. Liberty
Mutual Insurance Group launched a nationwide TV ad campaign which appears to be
well-intentioned. It even attempts to
inform, cluing potential car insurance shoppers to compare policy and claim
service features before price. As the
old cliché warns: Not all insurance programs are created equal… despite state
Department of Insurance attempts to standardize and regulate. Peek at this
video to see what I mean:
After all, however low
the price, that shiny car is hardly worth its new smell when the buyer
discovers it delivered without standard components. Imagine learning afterward
that there is no spare tire and no jack, no owner’s manual, and no remote to
disarm the hypersensitive alarm. Yeah, that’s going to cost $500 extra, says
the dealer; and to get one, you have to drive fifty miles to visit the closest
service department. Once there you discover that the warranty actually covers
the Drive Train only. No wonder it
was advertised so cheap. Look out, because many low-ball insurance plans are proven
similar.
Full disclosure: I am a
longtime agent for Safeco Insurance who was recently adopted into the Liberty
I used to like Safeco's advertising content
and style. Though segments from my favorite Safeco campaign are no longer to be
found.
I might have given
Safeco TV ads gold stars for being informative, entertaining, and relevant.
Even their newest crop of Marty & Edna ads are better than most. Problem was then as now: Their TV spots are hardly aired
anywhere.
Marty & Edna's kitchen
Marty & Edna's beds
Liberty Mutual's media
promoters have decided (rightly) not
to make impossible promises price-wise.
There are simply too many variables and numerous value differences for
general price comparisons to serve as any shopping guide. Liberty
The obvious problem for
me as a California-licensed agent is this: Little of these breaks are actually
available for customers in my state. Proposition 103 rules (1988 state ballot
measure) continue to trump such dispensations. For instance, if you are legally
liable for accident-caused damages or injuries, your California insurance
premiums must be surcharged to differentiate you from statutory "good
drivers"… at least until the
incident is three years past. No break for the guilty. No forgiveness. Nor is there such thing, anymore, as a simple
unintended accident.
Independent Agents
Second problem, again
with Liberty Mutual's accident
forgiveness strategy: Who empowers my insurance company to grant
forgiveness? Have insurance underwriters been drafted into some sort of vehicular
priesthood? Are they become superior justices? I don't think so… And underwriters that I know (independent
insurance agents are honored to work with many), they don't want that role or
responsibility.
Truly, this approach
plays into the bias of many a reluctant insurance shopper. Typically, insurers are viewed as arrogant;
displaying a high-and-mighty attitude
about the funds that they manage on behalf of risk-sharing pool contributors.
Yet another cliché, but yes: Perceptions matter. Everybody knows that premiums
collected aren't actually the Insurer's to keep. It's only borrowed money, so
to speak, to hold in trust; their compensation being the interest earned while
shared funds remain in their care. Who thinks of his insurer as “on my side” anymore?
Hardly anyone.
Third catch: This waiver of premium surcharge for a
"first" accident is nothing new or unique to Liberty Mutual. It has been common practice for decades among
Preferred-Risk insurers; that being those whose guidelines always did select
for good drivers from households which are less prone (statistically) to
generate auto accident losses. Set aside the argument that no underwriter
really has a crystal ball revealing my future of profit or loss. (One can wish!)
But this practice of legal discrimination and preference was standard for
Safeco Insurance Company and its direct competitors. It saved policyholders a
lot of money… even in California
ACV vs RC
Other benefits promoted
by Liberty Mutual Insurance present similar credibility problems, if taken too literally.
Such as a new driver discount: Means lower expense, right? Maybe less than
it might have been (though not in California
Consider the promise of no incriminating questions at claim time… How is that supposed to work? Can there
really be such a thing as full value
replacement for vehicles? And new car gap coverage is again nothing
new or particularly unique.
Yes, I can hear my
clients now:
"What about all the
money I put into my car… new tires, rebuilt transmission, custom rims? Do I get
replacement credit for all that?"
Answer: Hardly.
"I thought my rate
would go down when my boy started driving.
That's what the advertisement promised."
Did it really?
"Sure, I rear-ended
that car. It stopped for no reason, just
when my cell phone started ringing. Was that my fault? The TV guy implied that my insurance company
would take my side. It's what insurance is supposed to do."
Yes, yes and sort of yes…
depends.
Even in states where Liberty
So buyer beware! Read your policy
and look out. You know, if it sounds too
good… And all that jazz.
Some clichés are good
reminders after all.
TN tornado claim 2008
