Dozens Advertise Misleading Auto Insurance Rates

May 24, 2011

Think you’re getting insurance for $12/mo? Think again!

The BBB serving Northeast California is warning consumers to be leery of advertisements offering auto insurance for very low rates, some as low as $12 per month.

Last month, the BBB conducted a local advertising investigation to establish whether consumers could trust ads in local newspapers, Penny Savers, money-mailers, yellow pages and websites offering auto insurance for rates between $12-$19/mo.

We wrote advertisers requesting that they either substantiate the advertised rate or discontinue the low rate ads.

“What we found were dozens of companies advertising auto insurance for low rates and further claiming that ‘DUIs, foreign licenses, and poor driving records’ were no problem,” said Gary Almond, President of the BBB serving Northeast California. “After reviewing policies provided as substantiation, we found that the low rates were for classic, RV, motorcycle, and pleasure vehicles, liability coverage only, multi-car policies and typically only for individuals with good driving records. The ads are clearly misleading and harm the industry as a whole.”

As a result of our challenging the ads a few of the companies modified them or discontinued the unsubstantiated and misleading ads.

The companies that failed to modify the claims were forwarded to the Department of Insurance and had custom text placed in their BBB reports warning consumers about their deceptive advertising.

“Advertising of this sort hurts the insurance companies who refrain from advertising misleading offers,” said Almond. “We are happy to see the benefit of voluntary self-regulation when it is actively engaged and will continue to monitor the marketplace to promote fair competition.”

For reports on businesses and for information about BBB services, visit our website at or call (916) 443-6843.

See the BBB and CBS investigation here