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Is Insurance a Commodity?

“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”  - John Ruskin
All insurance policies are not the same, regardless of what the media or TV commercials say and insurance is not a commodity where the only material difference is price.
Stay tuned to this page for information and tools to help Big "I" members combat the low-cost advertising that results in consumers buying inferior products.

Related articles to "Is Insurance a Commodity" from the Big "I" Virtual University 

I just read this article [‘Price Check’] and jumped out of my chair and cheered!! The points you made were spot on and I can’t wait to get the info out over my social media outlets. Your thoughts echo what I wrote about in my book and on my blog. Great work and thank you, I thoroughly enjoyed reading this today!”
Brian Flood, CPCU, ARM
The Flood Group
Floral Park, NY

"I think the 'commodity' in insurance is the 'consumer expert.'"
Mike Edwards, CPCU
REAL Insurance Expert and Member, G5


How to Compete with Direct Writers in Personal Lines 
Download for free. (2 hours)
Click here to download the webinar handout
Presented live on March 12, 2014
This webinar is designed to assist insurance agents in explaining to insureds why insurance is not a commodity, why price should not be the determining consideration in choosing an insurance company/policy, and why they cannot rely on insurance advise from consumer websites and publications and, in all too many cases, from within the insurance industry itself.. Related Article

Competing with Direct Sales & Captive Agency Insurers in Personal (and Commercial) Lines

Purchase for $79 (3 hours)
Presented live on March 25, 2015

Are you tired of all the insurance commercials that shout “Price! Price! Price!”? Are you sick of the silly claim that someone’s exposures to loss can be analyzed and priced in 15 minutes or less? Are you really, really, really ticked off about losing business to someone selling an inferior product yet claiming, “SAME COVERAGE, Better Value”? If so, you don't want to miss out on this webinar.


IIABNY is pleased to offer “Value Added Agency Model: How to Take Back Market Share.” This two-part webinar series will highlight weaknesses of the Direct Response Internet sales models and demonstrate how agents and brokers can improve their agency and increase sales by bringing value to the entire process.

  • In Part 1, instructors Edgar J. Higgins, Jr., CPCU, and Jamie Deapo, AAI, AINS, take agents and brokers through a review of current market conditions and show you flaws in the competition’s model.  Purchase for $25

  • In Part 2, the elements of a value-added agency model will be explained in detail including: how to create a well-trained staff; developing operational efficiency; maximizing technology; proper customer selection; effective communication; and more. Purchase for $25.
The theme of these on-demand webinars is to take a positive, pro-active approach to regaining market share.


More Info:


This page was last updated on 12/1/16.
Google has launched its “Google Compare” auto insurance comparison web site for California consumers, perhaps Google’s first step towards a deeper immersion into the multi-billion dollar auto insurance marketplace. Right now, nothing really differentiates Google Compare to the many similar comparative rating web sites, but it adds to the illusion that consumers really can compare insurance products and reach purchasing decisions online. Caveat emptor anyone? [more]
Neither the ISO personal or business auto policies have a “crime” exclusion per se. Both have a racing exclusion, though how it applies is significantly different between these policies. But if you’re talking about non-ISO auto policies, the differences can be even more pronounced. [more]
A recent McKinsey report concludes that personal lines insurance, by and large, has become a commodity. It also questions the viability and value of the agent. This article excerpts one post from a LinkedIn discussion about this report and provides three vivid real-life examples of why personal auto insurance is NOT a commodity. [more]
Recently I received an email from a member who was alarmed at the rapid proliferation of exclusions in auto policies. These are exclusions that may not be readily apparent to insureds and they’re certainly not coverage deficiencies that are revealed in the heavy advertising of some of these carriers, including those that tout that their coverage is the same as everyone else’s. This competitive pricing race to coverage oblivion should cause concern to agents and consumers alike. [more]
Recently, we have been contacted by a number of industry reporters with questions about our specific response to companies like Walmart and entering the insurance marketplace and our general response to the whole “Is Insurance a Commodity?” issue. [more]
Walmart recently announced its entry into the auto insurance marketplace via online sales and store kiosks in selected states. may even sell small BOP policies. Have some types of insurance become commodities? Or is the problem that consumers see a mirage and think they can see the sand, as one fictional U.S. president put it? [more]
At a rapidly accelerating rate via TV advertising, online “ease of use” promotion and proliferating media articles, consumers are being duped into believing that personal lines insurance is a commodity, with the only significant difference being price. Nothing could be further from the truth. While a lower price doesn’t necessarily imply lesser coverage, that is often the case. [more]
This article is a wake-up call from consultant Chris Burand: “The independent agency system constantly emphasizes how important agents are to clients in choosing the right coverage. While agents can definitely offer crucial and important education to consumers, in both personal lines and commercial clients, they too often choose to not offer any education, any coverage reviews, nor even review the insureds' true coverage needs. As a result, touting these advantages of an independent agent are hypocritical. This hypocrisy is a fact. I am not offering an opinion, but an absolute fact. Hide and deny the fact if you want, but when you put your head in the sand, a prominent body part is made available for a painful whipping.” Read on if you dare…. [more]
This article is about leadership. When it comes to policy limits, forms and coverage, being a leader pays off for you and the client! Are you leading your clients so they understand that not all insurance is equal? [more]
What does buying running shoes have to do with buying insurance? Keep reading for an excellent analogy of why online buying of certain “products” is often a big mistake. [more]
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