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The third thing you never knew about insurance:

3. The statistics in those commercials? Totally manipulated.

I’m sure you’ve seen claims like this: “customers save an average of $428 by switching to Company X”. It’s true that you can save a lot of money by switching insurance companies. But there are some big problems with the statistic.

  • It only includes customers who switched. People only switch if they have an incentive to. So, it doesn’t include the people who would have paid more with Company X.
  • It doesn’t say what the customers who switched were switched into. Were they switched into plans with lower coverages? Is the comparison based on coverages which Company X had the cheapest rates for? Were they given a temporary ‘teaser rate’ which will expire in two years? Every company can “save you money” this way.
  • Every company targets a different demographic at a different time, and offers them lower rates, but not everybody else. That’s why every other company can make the same claims on TV as Company X does.

It takes a lot of research to find the company with the lowest rates for you. It helps to have an independent agent to do it for you!

Read on for the fourth thing you never knew about insurance.

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