Over the years, I have subscribed to many insurance-related newsletters and blogs. Needless to say, you could spend hours daily just reading the probably hundreds of such publications. So, over the years, I’ve culled my daily/weekly/monthly reading list to just a handful of essential newsletters and blogs. In the next few weeks, I’ll post a list of them. In the meantime, one such daily blog I examine when I boot my PC is from a plaintiff’s lawyer.

The Merlin Group is a Florida-based law firm that represents policyholders in multiple states. Chip Merlin’s daily blog is on my must-read list (and not because they featured my blog in a recent post of their own). The reason I follow Chip’s blog is because it’s not devoted to slamming the insurance industry like much of the attorney advertising we see on TV (especially on the Jerry Springer show…not that I’ve actually watched that show ;-). His blog is truly educational and devoted to examining case law and issues that policyholders can learn from, whether the decision was in favor of insurers or policyholders.

In Chip’s post about my blog, he quoted an excerpt from a post that discussed insurance industry advertising and questioned whether the unfair comparison of dissimilar insurance products might constitute “twisting” under some insurance laws or regulations. I myself have asked the question whether some industry advertising might constitute an unfair trade practice, something prohibited by pretty much every state.

For example, one insurer has used advertising catch-phrases like “SAME COVERAGE, Better Price” and “You get the SAME COVERAGE, often for less.” If you agree with the premise that “coverage” is determined largely by policy form insuring agreements, exclusions, and conditions, along with carrier claim practices, do insurers actually offer the “SAME coverage”? I don’t think so. For examples of auto policy form coverage variations, check out this article. For more information on the commodity myth created by this advertising, check out this area in the Big “I” Virtual University.

But this question is, does this type of advertising rise to the level of an “unfair trade practice” under state insurance laws and regulations? I can’t answer that because it’s a legal question. In my state, this is what the law says:

Misrepresentations and False Advertising of Insurance Policies. Making, issuing, circulating, or causing to be made, issued or circulated, any estimate, illustration, circular or statement, sales presentation, omission or comparison that…

  • Misrepresents the benefits, advantages, conditions or terms of any policy…
  • Uses any name or title of any policy or class of policies misrepresenting the true nature of the policy or class of policies

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….

So, is saying your policy provides the “SAME coverage” as everyone else if it really doesn’t an unfair trade practice? If the purpose of the law is to protect consumers from being misled by misrepresentations to their detriment, there’s an argument that it is. But, again, I’m not a legal expert and have no knowledge of whether this premise has been legally tested. But it sure looks misleading, if not deceptive, to me as a layman and I’m convinced it has contributed greatly to the public’s (and too many in our own industry) erroneous perception that personal lines, especially auto, insurance is a commodity distinguishable only by price.

Are you an insurance attorney? If so, what is your opinion? Feel free to Comment below.

Photo by Brett Jordan

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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

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