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Car Insurance Junk Mail

Written by Todd Clay. Posted in Research Last Updated: 01/18/2011

How auto insurance companies market through the mail -

Junk Mail Card from Allstate

This one came in my junk mail pile courtesy of Allstate.

Ever since I started writing for businesses, I’ve been intrigued by “junk mail”. The industry calls it direct mail, but consumers don’t seem to care.

Much of it ends up in the trash before any envelopes are opened. One industry-famous direct mail writer, Gary Halbert once said, “I am incessantly preaching the people of America sort through their mail while standing over a wastebasket?” Just think about how that makes the writer feel about their work.

Lots of Insurance Junk Mail

In 2007, according to the Direct Marketing Association (DMA), insurance companies spent $6.81 billion in insurance advertising through the mail. Not only that, but expenditures were expected to grow in the 7.6% per year through 2012. The few letters you saw was just a sample of the literal tons of paper, ink, and trinkets sent by insurance companies every year in an effort to gain your business.

So why do they do it? The DMA reported that insurance companies get back $8.15 for every dollar they spend through their junk mail campaigns. That means if Allstate sends out $1 million in direct mail, they expect to get back $8,150,000 in revenues from their efforts. That’s not a bad return on investment.

The Culprits, er, Insurance Direct Marketers

Most insurance direct mail comes from auto insurance companies. Think about it. For those of us who check our mailboxes, how many packages did you see from XYZ Life Insurance Company versus GEICO? If you think about it, auto insurance companies sent many more packages compared to any other type of insurance.

I’ve saved most of my insurance junk mail since starting this website (I know I’m a nerd). Granted, I’m only providing my anecdotal experience. However, from what I’ve seen, GEICO is the biggest direct mailer of the industry. I probably receive two pieces of GEICO mail for every one piece of mail from other insurance companies. I’m even getting stuff from GEICO after switching to their policy. (Someone needs to update their database.) Other companies I’ve seen in the mail were Progressive, Allstate, AAA, AIG, Farmers, and Countrywide.

What’s the Pitch?

There are several pitches insurance companies use in their direct mail campaigns. Typically, the value centers around price. After presenting the lizard or the cavemen, GEICO pushes savings more than anything else. The standby “15 Minutes Can Save You 15% on your Car Insurance” is always popular. Or the latest I saw from them “Millions of consumers will lose hundreds of dollars this year by failing to shop around for a better value on auto insurance.” also pushes their price over any other benefit.

Allstate recently sent this piece to me. “Your Enclosed Instant Access Savings Card Can Be Worth Hundreds of Dollars To You” was the teaser text on the front of the envelope. When I opened the letter, they enclosed a mock-credit card with a 1-800 number embossed on the front. Next to the attached card, a big font read “Average Annual Savings $353.00.” Again, price was the big draw.

Farmers tried a slightly different approach. Just under return address read the words “Do you love your agent?” But the primary teaser text was “The ‘Middleman’ could save you hundreds of dollars a year on your auto insurance.” Again, Farmers says I can save a few hundred bucks by going with them, but they pushed the agent relationship as well. They could be right. I haven’t received a Farmers quote for a few years.

Despite the success of the internet, direct mail is still alive and well. As long as insurance companies get an 8-1 return from their junk mail advertising, expect to see more lizards and good hands in your mailbox. As you recycle or chuck those annoying letters, keep this in mind. Those bold-lettered packages are subsidizing the relatively cheap letters you send via snail mail. See, junk mail is useful after all. Thanks, GEICO.

Do you have any thoughts about insurance junk mail? If so, leave a comment.

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Todd Clay

Todd Clay is a former insurance agent with the largest insurance company in the United States. He earned his Bachelor’s from the University of Texas. He's worked in several fields but has specialized in insurance, financial-related information, and technology. He blogs at Car Insurance Guidebook. Connect with Tood on Google+

Reviews (4)

  • Ashley

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    I just called 1-888-559-1922 which was their Tech Support. I asked if she could help me be removed from their pre-sorted mailing list I seem to have gotten on? She immediately transferred me to Diandra in Customer Service who filled out an electronic form to be sent to the marketing department. She asked for our names and our address and said that the Marketing Department would be contacting the individual agents assigned to our region. I asked for a confirmation number or a copy of the electronic form, but she said the form is “in-house” and she could not send it to me. It was a very easy and painless process, and we hope the 20 State Farm mailings a month will come to a stop :)

    Hope this helps anyone else!!

    Reply

    • Todd Clay

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      Thanks for the info, Ashley!

      Reply

  • Mary

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    How to opt-out of postal mail solicitations from the following insurance companies:

    Farmers Insurance Group
    Call 888-327-6335

    State Farm Insurance
    Write a letter to:
    Customer Mail Response Center
    State Farm Insurance Company
    P.O. Box 1800
    Aurora, IL. 60507-9862

    Geico
    Go to:
    http://optout.geico.com/marketing/

    Please continue to share other opt-out information!

    Reply

    • Brandon Clay

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      Thanks for the info, Mary!

      Reply

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