Our first stop for fact checking: Snopes. Here we learn that the island is a real place. Sure, it was edited for the ad to give it a “cleaner” look, but you can actually go there and not just in your dreams. Located in Norway, the island is called Ona. A visit just requires a hop on one of many ferries or your own boat.
Ona is famous for its historic fishing village and its lighthouse, Ona Lighthouse (which you will see the next time you watch the video). As NewsinEnglish.no points out, image editing is not the only change that Allstate has made to the reality on the island. People who tend to speak a local dialect (not English as portrayed in the ad), and the glorious weather may be a bit hyperbolic. You are more likely to run into a storm than a bright, sunny day while you are there. But hey, perfection is overrated, right?