Dr. Roy Spencer notes:
Allstate Should Pull this Ad and Apologize for Misleading the Public
I’ve been meaning to comment about this TV ad for Allstate insurance, which enraged me the first time I saw it. Allstate knows better (the insurance business deals with probability and statistics) and they knew this was a lie when they put the ad together:
In the ad, actor Dennis Haysbert says:
“A once-in-500-year storm should happen once every 500 years, right? The fact is, there have been 26 in the last decade.”
Setting aside the fact that we don’t have enough statistics to say anything meaningful about what happens over 500 years (hydrologists prefer to stick to 100 years as justified when talking about rare events), Allstate knows very well that such statistics refer to the repeat period for the same location… not for (say) the whole United States. It is not unusual for once-in-100 year weather events to occur more than once, maybe several times, each year somewhere in the U.S.
I consider this false advertising because Allstate knows better, and is purposely misleading the public to make more money
Here is the text of the ad, from AllTVSpots.com
“A once-in-five-hundred year storm should happen every five hundreds years, right? Fact is, there have been twenty six in the last decade. Allstate is adapting. With drones to assess home damage sooner. And if a flying object damages your car, you can snap a photo and get your claim processed in hours, not days. Plus, Allstate can pay your claim in minutes,” Haysbert says while sitting in an armchair on a field and a storm is about to begin. As he mentions the ways Allstate has adapted, the clouds vanish and a rainbow appears behind him. “Now that you know the truth… are you in Good Hands?” Haysbert asks at the end of the spot.
The 500 year storm claim may have come from this article about Hurricane Harvey in the Washington Post:
Houston is experiencing its third ‘500-year’ flood in 3 years. How is that possible?
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Bottom line , fear is good for business in an area where people buy something not because they know they will need it. But because they fear what may happen if they do not have it..
For many people, fear has nothing to do with it. The fact that they have a mortgage, or a HELOC, or some other credit attached to their property requires that they have it insured.
(If the rate is reasonable, it is actually not a bad idea, unless you live well above any possible non-Biblical flood level. I’ve been through three “century” floods here in Arizona – and have done a fair amount of research on “The Big One,” when Confederate Army scouts were convinced they had sighted the Pacific Ocean when they were still about 300 miles away from the Colorado River.)
Talk up alarm then profit from it. Sounds like fraud to me?
Allstate should tell it like it is, as does Warren Buffett:
https://www.cnbc.com/video/3000596552
the level of statistical abuse is unprecedented, except for all those other times they occurred.
Just to make things clearer…a 500 yr storm is NOT a 500 yr flood event.
A 500 yr storm event is a given amount of rainfall over a certain duration. This duration can be 1 hr, 2 hrs, 4 hrs, 6hrs…24 hrs, 48 hrs, 72 hrs, etc.
So not only can there be 1/500 probability storms at multiple locations across the country, there can be multiple 1/500 probability storms at a SINGLE location but of different durations. An intense 1 hr deluge can be a 500 yr storm but is obviously a much different entity than a 500 yr 24 hr rainfall from a slow-moving tropical storm or something.
A 500 yr flood is theoretically a flood elevation with 1/500 chance of occurring. Obviously a short-duration 500 yr storm won’t generate that for a large watershed. It may not take a 500 yr storm, either. It could be two back-to-back 100 yr storms of long durations with a short period of no precipitation in between, for example.
Australia eventually resolved this problem with a Royal Commission
https://www.abc.net.au/news/2018-09-21/banking-royal-commission-live-blog/10289592
Just a gem
‘Allianz’s misleading and deceptive insurance websites
Allianz may have engaged in misconduct through each of the 39 misleading and deceptive statements about travel insurance on its website, each of the 14 representations related to home insurance, each of the 4 representations related to car insurance, 3 related to life insurance and one about boat insurance.
Allianz also failed to report these breaches to ASIC in a timely way, and in fact decided not to report these breaches.
The insurer may have also engaged in misconduct through poor risk and compliance management.
Allianz’s behaviour fell below community standards by:
Not removing the misleading statements from its websites immediately;
By not being frank and open in its dealings with ASIC, in particular by failing to inform ASIC of similar breaches or of how far back some of the misrepresentations dated;
By seeking to manipulate the content of an independent report commissioned by Allianz that was intended to meet a regulatory requirement and be provided to APRA.
Ms Orr says it is open to find that these problems were caused by the following deficiencies:
Allianz had inadequate processes to monitor its own and partners’ websites.
The insurer had inadequate processes for monitoring and closing compliance problems. Monitoring and supervision remains an issue at Allianz.
Until July this year, Allianz had inadequate oversight of its travel insurance partner AWP.
The insurer’s culture does not prioritise compliance and risk management.’
Heavy penalties and governance are in the pipeline.
This company needs to be Trumped.
There are 3,147 counties or county equivalents in the US. In 7 years, we should expect 500 year floods in 44 of them.
https://en.wikipedia.org/wiki/County_(United_States)
This is not simple to calculate. I don’t know if you can even decide if an event is a 500-year-event, in fact.
Doesn’t the US have advertising regulators like they do in Europe?
EVERY storm is a “50yr event,” at a minimum.
When SA went black they blamed a 50yr wind event. By my count, the highest wind speed recorded in DPR SA had been exceeded at 57 weather stations, and presumably more than once at some. A peak of 105km/h (not knots) wouldn’t be noteworthy anywhere except perhaps indoors.
Insurance companies, banks, Governments, the UN, UNICEF, the EU, the environmental movement, the WMO, they’re all in on this crazy scam. It doesn’t matter if we win or lose the climate debate. It won’t stop them as their real objective is a Global Power Grab.
https://youtu.be/e8JRCoSgsUU
We’re beyond the point where we take aim at an insurance company paying lip service to the Climate Change Scam:
https://youtu.be/e8JRCoSgsUU
And while we turn in circles the real assault on the free world takes place at our schools and universities: https://youtu.be/ACYRaNvTN2w
And the Angel tree is not the oldest living thing East of the Mississippi. There are Cyprus trees way older.
Cypress?
It appears that the ad company has accomplished it’s goal. Everyone is talking about Allstate Insurance.
All under state costumers intelligence.