Testimonials have turned into an integral component of the success of a business. Think about how important a Google or Amazon review is to a business. If you are anything like me, the first thing you do when you are thinking about buying something is to look up reviews to see what other people said about it. Those reviews are testimonials, and they are persuasive. Given the power of a positive (or negative) review, it may be tempting to utilize positive reviews in advertisements for your agency. However, since this is the insurance industry, there are rules (of course) that you need to be aware of before you utilize testimonials in your advertising.
The three rules
The good news is: There are only three rules to using testimonials in advertising, and I can fit them all into one sentence (but not this one).
Testimonials used in ads must be: 1. genuine; 2. represent the current opinion of the person giving the testimonial; and 3. be applicable to the policy being advertised.
The bad news is: This simple rule makes it difficult to know if you are complying with it. Let’s use an example:
Sidious & Apprentice Insurance Agency is based on the planet of Coruscant, which remarkably shares the same insurance laws as the states of Northeastern America.
It decides to run an ad campaign on Instagram—yes, it exists in a galaxy far, far, away—using the following testimonial:
“Sidious & Apprentice helped me save over a hundred credits on my speeder insurance! I recommend them to all my friends.”—General Grievous
Is this testimonial genuine? Does it represent the current opinion of the person (droid?) giving the testimonial? Is it applicable to the policy being advertised? In other words, is the testimonial legal or illegal? I have no idea. There is almost no way of knowing if a testimonial is legal or illegal on its face. You need background facts.
Is it genuine?
What if General Grievous didn’t exist? Siths are going to be Siths, so if Sidious & Apprentice made up the testimonial to build itself up, then that is clearly illegal—and hopefully you knew that. An ad is either genuine or it’s not. It will not change over time. Unfortunately, that is not the case for the rest of the requirement, which complicates matters further.
Does it represent the current opinion of the person giving the testimonial?
What if the testimonial was entirely accurate and legal at the time it was made? Can you guarantee that the testimonial always will be accurate and legal? Nope.
The requirement that a testimonial ad represent the current opinion of the person giving the testimonial, and that the ad be applicable to the policy being advertised can change over time. If two years after making this statement, General Grievous ends up switching agencies and recommends that new agency to all his friends … well, that means that Sidious & Apprentice can no longer use that testimonial in its ads.
Is it applicable to the policy being advertised?
The same is true for the requirement that an ad be applicable to the policy being advertised. Agencies add and subtract carriers frequently. Carriers add and subtract coverages and products frequently. In short, the insurance products and carriers that an agency offers are going to change over time—even if the customers and their opinions remain the same.
If an agency no longer writes coverage with the carrier referenced in a testimonial, then that ad is no longer legal. That is true even if you don’t mention a carrier in the advertisement.
Let’s return to our example. What if Sidious & Apprentice stopped representing the carrier that insured General Grievous? Well then, the testimonial would no longer be legal. Right now, you probably are thinking: “But wait the testimonial didn’t even mention a carrier!” You are right about that, but at least one insurance department in the Northeast has stated that when a testimonial refers to a specific amount saved, it is clearly referring to a specific insurer—even if the insurer is not named in the ad. (Don’t believe me? Check it out yourself.)
I feel like I write the phrase, “this isn’t meant to scare you” too often in my articles. But, this isn’t meant to scare you. I just want to make you aware of the hidden pitfalls involved with testimonial advertising. To bring the scare factor down a little, here are some best practices to keep in mind to avoid some of these issues.
Best practices
Keep things general. When utilizing testimonials too many details can be a bad thing. Avoid any mention of carriers, and as hard as it might be, avoid statements like, “Agency X saved me Y amount of dollars on my insurance.”
Don’t recycle. To be clear, in real life you should absolutely recycle. We only have one Earth! But, when it comes to testimonials, they should be thrown in the trash after a few uses. The longer it has been since the testimonial was made, the more likely it is that something has changed. Cycling in new testimonials for the old will help to avoid this issue.
Bradford J. Lachut, Esq.
Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.
