Are insurance mailings promising to cut homeowners insurance a bait and switch? (2024)

Every year around this time, I get mailings from insurance agents I don’t know. They all have a few things in common. Their letters include my home address and sometimes even a photo of my house (which is creepy).

Most importantly, they brag that they can cut my homeowners insurance in half or even by two-thirds.

This reminds me of the famous line, “There’s a sucker born every minute.”

Putting aside how unfair this is to babies, the line is attributed to circus showman P.T. Barnum. But as I demonstrated in this space three years ago, it was actually said by a Barnum competitor who couldn’t get the foot traffic that Barnum was getting.

Barnum biographer Candace Fleming says a more accurate phrase uttered by Barnum would have been, “There’s a customer born every minute.”

True insurance savings?

In my case, regarding these insurance flyers, this story is about suckers and customers.

I first spotted this many years ago on the anniversary of my house purchase. That’s how insurance agents know that my homeowners insurance is about to expire. Public land records show the purchase date, which is usually when the new policy kicks in.

The first time I fell for this ruse, I called and an agent took all my personal information. My proposed insurance bill was a lot higher than what the flyers indicated.

I felt like a sucker — but not a new customer.

An annual annoyance

Now every year, when the letters come in, I get aggravated. I want to call the agents and scold them for their trickery.

This year, I finally did.

A half-dozen insurance agents all suggested to me in unsolicited written proposals that arrived in the mail that my insurance could be drastically cut.

Once some of them realized I wasn’t calling for a quote but for journalistic purposes, they didn’t want to talk to me. A few were pleasant but unhelpful. One, fortunately, was especially candid, and I’ll get to him in a moment.

But first I want to tell you how I organized this. I created a spreadsheet with price comparisons with my insurance costs. I looked for patterns.

My study wasn’t scientific. I didn’t take into account the discounts you get for bundling homeowners with auto insurance. The numbers also didn’t include what level of deductible is used.

However, all the agents stated in their flyers that they would come in at a much lower price than my existing premiums.

I found it especially outrageous that two agents wrote that they could get my annual premium under $2,000. In this day, in this state, with hail, windstorms and tornadoes, it’s hard to remember what a $2,000 annual policy even looks like, especially if you want to insure for full replacement value.

Looking for patterns, I saw that most agents robbed Peter to pay Paul. What I mean is an agent might quote dwelling replacement $247,000 more than what I pay. But the personal property is $184,000 less.

Another agent teases me with a $2,530 premium. But his personal property coverage is only $303,000, compared to the $535,000 I currently have coverage for.

Big differences in coverage

The candid insurance agent in Spring, Texas, Luis Hernandez, says he blankets the state with his flyers. His mailing to me listed the year, make and model number of all of our cars, too.

“That’s just a sample quote,” Hernandez told me. “There’s no way for us to legally run a firm quote on anybody that didn’t request a quote.”

When people call, he says “in some cases the rates come back about the same — a little bit higher or a little bit lower. Sometimes it’s just a whole lot higher. It’s just a computer-generated quote. That’s it.”

The mailings, he says, “are just an attention getter. … I just hope to catch somebody.”

Not bait and switch

Why isn’t this considered a bait and switch where a salesperson lures you in with a low price but actually the cost is greater?

Gardner Selby of the Texas Department of Insurance looked at my 2024 flyers and said, “Each of the flyers you shared has a disclaimer that basically says the advertised premium isn’t necessarily what they’ll charge. No price is guaranteed.”

Sure enough, in a super small font size these flyers back off from their suggested numbers.

“Sample quote is based on public information as well as certain assumptions made about you,” states one disclaimer.

“Premium amounts are for illustration only,” goes another.

“This is merely a proposal and is not a policy of insurance or offer to insure,” warns one more.

All that is overshadowed by the big-font bold numbers showing you the inaccurate teaser rate. Sometimes it’s circled so you can’t miss it.

As TDI’s Selby suggests, “Our consumer advice is to get premium quotes from multiple companies. Also, make sure you compare similar levels of coverage.” TDI sponsors an insurance shopping website — www.helpinsure.com

My spreadsheet shows huge differences in coverage and costs, company by company. It’s eye-opening.

A sucker and a customer? Only be the second.