Should You Buy Insurance from Big-Name Advertisers? 

Do massive ad budgets help you — or cost you?

Everywhere you look, big insurance companies are advertising — TV, radio, YouTube, streaming services, social media.

But is all that marketing really in your best interest?

It’s a question we hear often: should you buy insurance from heavily advertised brands… or are there better options?

Let’s break it down in plain English.

The Cost of Advertising: Who Really Pays for It?

In 2022 alone, the five largest auto insurers in the United States spent more than $5.8 billion on advertising. GEICO topped the list at around $1.5 billion, followed by Progressive, State Farm, and Allstate.

That is a massive number.

So where does that money come from?

Industry data suggests that approximately 3% to 6% of every premium dollar goes toward advertising costs. When you factor in broader marketing expenses, commissions, and brand campaigns, the percentage can be much higher — particularly on personal lines like home insurance.

In simple terms: advertising is built into the business model.

However, it is important to keep perspective. Even when advertising spending dropped significantly in 2023, premiums still rose. Why? Because larger forces — such as severe weather events, higher repair costs, medical inflation, and accident severity — are major drivers of rate increases.

Advertising is not the only factor. But it is part of the overall cost structure.

Potential Drawbacks of Heavy Advertising Models

1. Higher Overhead

Large advertising budgets create higher fixed expenses. While that does not automatically mean higher premiums, it can reduce pricing flexibility.

2. One-Size-Fits-All Policies

Many direct-to-consumer insurers are designed for simplicity. That works well if your situation is straightforward.

But if you own rental properties, have a classic vehicle, run a small business, or need layered liability protection, a standardized policy may not fully address your needs.

3. Centralized Service Models

With national carriers, you often interact with call centers rather than a consistent local advisor. Some customers appreciate 24/7 access and mobile apps. Others prefer having a dedicated advocate who understands their full insurance picture.

4. Market Withdrawals

In recent years, some large insurers have limited new business or exited certain states following heavy losses. When that happens, customers may need to find new coverage quickly — sometimes at a higher cost.

How Independent Agencies Compare

As an independent agency, Trailstone works with over 40 carriers — many of which spend little to nothing on national advertising.

That does not mean they are lesser-known because they are weaker.

Many of our carriers are rated A or better by A.M. Best and have strong financial positions. They simply allocate capital differently.

Instead of focusing heavily on brand marketing, they focus on underwriting niches and targeted risk segments.

This can create more flexibility and, in many cases, more competitive pricing for the right client profile.

What Do Reviews Tell Us?

Large national insurers often receive positive feedback for:

• User-friendly mobile apps
• 24/7 claims access
• Fast online quoting

However, online reviews frequently mention:

• Unexpected rate increases
• Long hold times
• Limited flexibility at renewal

Independent agency clients often highlight:

• Personalized advice
• The ability to re-shop coverage at renewal
• A single point of contact who advocates for them

There is no universal right answer. It depends on your situation and preferences.

Is Advertising Linked to Better Value?

Research does not show a strong correlation between advertising spend and customer value.

In many cases, highly rated regional carriers — companies you may not see on television — offer competitive pricing and strong service.

The key difference is access. If you only shop one brand, you only see one pricing model.

When you work with an independent agency, you compare multiple models side by side.

Bottom Line

Big advertising budgets are not inherently bad. They create brand recognition and convenience.

But they are not the only path to strong coverage.

If you want to explore options beyond the brands you see on television, Trailstone can help you compare multiple top-rated carriers — without sacrificing financial strength or service quality.

We teach before we sell. We explain your options in plain English. And we help you find coverage that fits your situation — not just a marketing campaign.

If you are curious whether you are paying for the brand name or for the protection itself, let’s talk.