Why are there so many ads for car insurance?

There’s money to be had in many places.

The insurance company does make money on your premiums by actually “insuring you”. But they really get serious making money by investing all those premium payments (current market freefall notwithstanding).

There’s also ridiculous money to be had by acting as a search engine middle man. Try googling for insurance and besides the name brands you recognize, you’ll also see links/ads to sites like CarInsuranceQuotes [dot] com and NetQuote [dot] com.

Those middle man sites collect your personal information and then promise that one of “their representatives” will contact you shortly. What really happens is that they sell your personal info as a “vetted customer reference” for like $5 a pop (or more depending on the line of business, like annuities or mortgages) to the real insurance company agents. They make money simply pretending to be agents, and then help real agents find you.

Geico changed the game by marketing direct to consumers (as opposed to using agents/brokers). They killed the competition for a while, so other companies had to follow suit. Geico originally stood for Government Employees Insurance Co, so probably the direct marketing model was precipitated by a change in their mission from serving g-men to the public at large.

Also, the inter-webs.

I think it was Progressive that really started to market to consumers directly. In those days, around 98/99 you’d actually still go to an “Insurance Broker Office” if you intended to shop around.

Gosh, how only a few years of fully commercialized internet have turned the world upside down….