That argument works for like, Pringles, not something you generally are legally required to have. If they’re required to spend money on advertising just to remain competitive, that sounds like you could severely restrict all insurance company’s ability to spend on advertising and save everyone money.

Exactly. They want to bring in exponentially more premiums than what they spend on advertising, and the new premiums are what provides the cash to pay other policy claims. It's really kind of an accepted form of Ponzi scheme. They are gambling that they will find enough people who will never need to make a claim in order to afford the few that do.

It could just be for reducing churn and keeping the status quo. It's a prisoners dilemma, if geico spends a million on advertising then they might gain some customers from say progressive. Progressive would then also also have to advertise to attract customers back so they will spend a million on advertising too, now both are spending a million to keep the status quo. If you take a step back and look at the big picture it's basically everyday people paying higher premiums that go to the advertising company, celebrity etc.

The car insurance market is pretty static, there's no opportunity to expand the market outside general population growth since everyone already has a car and has car insurance, so expansion is difficult especially since there arent many differentiating factors, so companies tend to advertise to just keep there current market share. Charity on the other hand has plenty of room for expansion, it can be as much as the disposable income of the country, if you watch an aspca ad and donate your likely to keep donating to the other causes you support, assuming you have the disposable income.

You can advertise without paying millions to people who already have millions. And forcing them to reveal the cost to consumers isn't preventing them from advertising.