4:59 a.m.

That’s when my blood began to boil.

That’s when I woke up this morning with my iPod Mini earbuds delivering me a radio commercial for Gabi, an online insurance quoting service that claims to be able to provide 40 or more insurance quotes for auto and home.

According to their web site, users “Save on average $961 per year.” Their YouTube channel cites savings by some users of close to $2,500.

I found the following statements on their web site:

“Gabi uses the account credentials to your current insurance account (or a PDF of your policy declarations page) to learn about your current coverage details, so you don’t have to input them manually. We use those details to get you APPLES-TO-APPLES comparisons for the SAME COVERAGE from other insurance providers to find the best rate. If you don’t want to use this feature, you can manually enter your information and select coverages to get a quote.” [EMPHASIS added]

“Gabi is an online insurance broker and agent. We don’t replace the insurance company, we just help you shop. Our product is a free tool that helps you compare auto and home insurance rates across top providers and finds you the cheapest rate for YOUR EXACT COVERAGE.” [EMPHASIS added]

According to the “Gabi Personal Insurance Agency” YouTube channel:

“Americans overpay for car insurance by over 37 billion dollars a year.”

And, according to a user:

“Gabi came back with some quotes for the EXACT SAME car insurance.” [EMPHASIS added]

Hanno Fichtner, Founder & CEO of Gabi says that Gabi:

“…ANALYZES your existing policy and finds you the best rate for the SAME COVERAGE.” [EMPHASIS added]

A YouTube review from” Common Cents Mike” includes these statements:

“They’re gonna do an ‘apples to apples’ comparison of your existing policy by one of two ways….”

“You can give them access to your online information or you can provide a copy of your declarations page and “…they have all the information they need to do an ‘apples to apples’ comparison for your policy.”

These types of quoting services are all over the internet and are a complete waste of time. More important, they are dangerous to consumers. They mislead the public into believing that the only difference between insurance policies or insurers is the price. I’ve blogged before that I believe these types of advertisements and claims violate the Unfair Trade Practices of most states. For example, according to the law in my state:

False Information and Advertising Generally. Making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published disseminated, circulated, or placed before the public…an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance…THAT IS UNTRUE, DECEPTIVE OR MISLEADING….” [EMPHASIS added]

Exaggerated advertising or false meritorious claims are often considered by courts to be “puffery” and not civilly actionable. Statements like “Better Ingredients. Better Pizza.” In the Pizza Hut, Inc v. Papa John’s International, Inc., 227 F.3d 489 (5th Cir. 2000) case have generally not been considered false advertising or violations of fair trade laws. In this case, the court referenced the Lanham Act (15 U.S.C. § 1125) and opined that:

“A prima facie case of false advertising under section 43(a) of the Act requires the plaintiff to establish:

“(1) A false or misleading statement of fact about a product;

“(2) Such statement either deceived, or had the capacity to deceive a substantial segment of potential consumers;

“(3) The deception is material, in that it is likely to influence the consumer’s purchasing decision;

“(4) The product is in interstate commerce; and

“(5) The plaintiff has been or is likely to be injured as a result of the statement at issue.”

I believe that statements that insurance quotes are based on an “apples to apples” comparison for the “same” or “exact” coverage go far beyond simple bloviated puffery and constitute fair trade laws. They endanger the financial well being of consumers.

Insurance policies are legal contracts. Many are dozens of pages long. You cannot make an “apples to apples” coverage comparison with only a Declarations page. This also does not tell you anything about the insurer’s claims service.

Insurance is not a commodity differentiated only by price. In a 50+ year career as a P&C insurance professional, I’ve seen so many people buy cut-rate auto insurance and then suffer uncovered losses. Here’s an article from my blog giving over a dozen examples of coverage differences and claim denials and you can search the blog for “commodity” to find other examples:

Auto Insurance Is Not A Commodity

Is it time that insurance regulators put a stop to this kind of destructive misinformation? Does anyone care? Is anyone listening?

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information