Pondering #1 - Car Insurance

It is difficult for me to always look at life through a "serious" lens. Many of my ponderings in life add no value to the society around me, but merely entertain me (and sometimes others). Such a pondering follows....

So it feels like every other commercial I hear on the radio, and maybe every third commercial I fastforward through on my TV, is about car insurance. Geico will save you 15% if you spend 5 minutes of your time with a gecko. Progressive will compare their quote with all the others to guarantee savings. I always hear AIS on the Mikey Show and how they will save you hundreds, if not thousands, a year. Then there is All State, State Farm, and Farm All (it’s only in Lancaster County…. Ok, ok, I made it up).

Here is the logical conundrum I find myself in. Every car insurance company is promising the lowest price on car insurance. At least way lower than the price you are paying right now. How can every car insurance company be offering the lowest quote at the exact same time?! There are only a few possibilities.

My first thought: The insurance companies will continually beat each others prices, since they desire to be true to their word, and the trajectory of this glorious reality is we will all eventually have free car insurance!!! This is awesome! (Dear economy wiz: don’t test my logic, just get excited)

Second possibility: There is a devious, and quite shrewd, car insurance company out there, that remains a mystery, but has somehow convinced the great masses to buy their overpriced car insurance. And now that the internet has finally taken off in the past year, people are starting to realize how much money they can save with these other companies. But don’t worry overpriced car insurance company who is losing all their clients….. I’m sure the government will bail you out (political stab with no willingness or ammunition to back it up).

The third possibility: the car insurance companies are promising things they cannot follow through with, or they are saving their money in customer service and/or shoddy policies. I just fell asleep writing this “Hey, let’s approach this realistically” option, so let’s rule it out.

I’m personally subscribing to possibility number one, and have adjusted my budget accordingly. Any votes or proposed possibilities?