Esurance Assumes We're Stupid

Maybe I’m just a grumpy old economist, but I was struck just how misleading a recent commercial from the Esurance auto insurance company is.

It suggests that there are real savings, economically and ecologically, associated with the fact that Esurance provides only online proof of insurance cards. Since states still require you to have a paper proof of insurance in your car, all this amounts to is transfer of the transaction costs associated with printing a paper proof of insurance from Esurance to the customer. That’s hardly a savings to the customer.

What’s worse is that the claimed ecological savings is complete bunkum. If Esurance provided the paper proof of insurance, it could ensure ecological benefits by a corporate policy of printing them only on recycled stock. By forcing the customer to print it, Esurance virtually guarantees that only customers who assume the transaction costs of obtaining recycled stock to use with their own printers provide the promised ecological savings. Esurance’s policy virtually guarantees that the vast majority of its paper proofs of insurance will benefit the environment not a whit.

Just for the misleading economic and ecological claims I’d be inclined to give Esurance a thumbs down, but the assumption that people are too stupid to think this nonsense through really seals the deal.