State Farm Insurance Summary
State Farm Mutual Automobile Insurance Company (State Farm) is headquartered in Bloomington, Illinois and currently employs over 60,000 people. They offer insurance policies in all 50 states, and are the largest insurer of automobiles in the country. They have over 17,000 agents that are licensed to sell their products, and they recently started offering banking services, mutual funds and retirement products. They are in the top 50 of the Fortune 500.
The company is structured as a mutual, which means they do not technically have shareholders. They are instead owned by the policyholders. In 2007 they issued a dividend payment to auto insurance customers, and the total payout was over $1 billion. There are nearly two dozen subsidiary companies owned by State Farm Mutual Automobile Insurance Company that manage everything from their life insurance business to their banking products. As with most of their competitors, they have an aggressive marketing campaign. As of this review, their spokesperson is Aaron Rodgers, an NFL quarterback for the Green Bay Packers.
State Farm auto insurance policies come with a standard set of protections, including bodily injury and property liability. This protection kicks in when you are found at-fault for an accident that causes damage to another person, vehicle or property outside your car. In addition to their standard liability protection, drivers can add optional coverage types to protect their own assets. Comprehensive coverage can be added to protect your car from natural disasters and theft. Collision coverage can be purchased to repay for damage suffered by your own car when you are involved in an at-fault accident. Uninsured and underinsured motor vehicle coverage can help offset costs after an accident with someone who is not adequately insured.
Discount Double Check® – State Farm spends a lot of money on their marketing, and most people have seen their Discount Double Check® commercials with NFL QB, Aaron Rodgers. So what exactly is a Discount Double Check®? According to State Farm, it is a tool that helps customers find all the potential discounts they qualify for and help them save money. In reality, it’s a marketing tool like Nationwide’s Vanishing Deductible®. Just about any agent that does their job correctly will find you all the discounts you qualify for. Even direct-to-consumer companies like GEICO and Esurance will do a good job of finding all your eligible discounts when getting a quote on their website. The Discount Double Check® is a marketing tool designed to grab attention and get more customers, in our opinion.
State Farm offers homeowners insurance, renters insurance and condo insurance across the country. Each of their policies provides protection for the home itself, as well as the personal belongings found inside the house. In some situations, items outside the home are covered as well. For example, an item stolen out of your car is more than likely covered under your State Farm home insurance policy. In addition to protecting the structure and personal property, their home insurance policies can also cover liability that arises on the property. If someone were to slip and fall while at your home, they may be able to sue you for damages. A good home insurance policy can help pay for both legal costs as well as any settlement that is due.
Discounts available for State Farm home insurance policies include:
- A claims-free past
- Fire sprinklers
- Roofing upgrades
- Multiple policies with State Farm
- Security devices installed in the home
In addition to auto and home, State Farm is a large supplier of life insurance products throughout the United States. Sold under the banner of State Farm Life Insurance Company, their product lineup covers the most popular types of life insurance:
Term Life Insurance – State Farm offers four different types of term life insurance. Select Term is a standard policy that provides coverage for a specific amount of time at a fixed premium. Return of Premium is similar to Select Term, but your premiums are returned at the end of the policy if you are still alive. This costs more, and due to the time value of money, the returned premiums will probably be relatively insignificant. Mortgage Life (commonly referred to as decreasing term) mirrors your home mortgage and offers a death benefit usually equal to the remaining balance. Over time, as your mortgage goes down, so too does your death benefit. 5 Year Term Life provides a basic level of coverage that is renewable until 85.
Whole Life Insurance – State Farm’s whole life product is just about the same as any of their competitor’s. You pay a premium that in part goes toward life insurance protection, and in part goes toward an investment. Whole life insurance plans can be cashed out or borrowed against, and are subject to market risk.
Universal Life Insurance – Universal life operates closer to whole life than it does term insurance, and acts as a permanent life insurance solution. You have more flexibility over the premiums and benefits than you do with whole life, and you can also borrow against the value if needed.
In addition to property and casualty insurance products, State Farm is also a full-service business insurance provider. They offer commercial auto, workers compensation, professional liability, inland marine, surety and fidelity bonds, as well as business property and liability protection.
State Farm Insurance Price (Rates)
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According to our auto insurance rate quote test, State Farm lands right at the average mark when it comes to their premium cost. To be exact, they were 2.2% above the average, and is well within any margin of error. This price is to be expected with a company as large as State Farm, as their business model is very similar to other large insurance companies. The use of third-party agents as a primary method for selling policies generally drives prices up, since commissions must be factored into the overall premium. But with State Farm’s size, they are able to keep costs reasonable due to their overall volume.
Filing a claim for an auto accident or loss can be handled in a lot of ways with State Farm. Once the claim has been started you will be assigned a specialist who will be your main point of contact and work with any other parties directly.
To begin a claim, you can:
- Report it online
- Call the State Farm claims hotline (1-800-782-8332)
- Contact your actual agent
- Use the State Farm Pocket Agent App on your smartphone
State Farm uses a network of repair centers (referred to as the State Farm Select Service® program) and encourage policyholders to get their damaged vehicles fixed through them, though it is not required. By using a repair facility within the network, State Farm will guarantee the completion date and provide a limited warranty for as long as you own the vehicle.
Consumer Research and Complaints
According to numerous consumer surveys performed by both Consumer Reports and JD Power, State Farm consistently ranks “above average” in customer satisfaction.
In 2010, a reader survey was performed by Consumer Reports that polled them based on claims-related problems, non-claims-related problems, and timely claims payments. State Farm received 89 out of 100, putting them in the top 10 of all insurance companies surveyed. In 2011, the US Insurance Shopping Study was completed by JD Power, in which State Farm scored 4 our 5 and classified them as “better than most.” An auto claims survey performed by JD Power in 2012 awarded State Farm 4 out of 5 in overall satisfaction. A similar result was received in 2013 in a survey about the overall shopping experience.
State Farm is not accredited with the Better Business Bureau, and currently rates them a B. In the past three years there have been 1495 complaints filed with the BBB, and 598 in the past 12 months. The vast majority of the complaints filed were labeled as Problems with Product / Service.
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State Farm offers just about any type of insurance an individual or small business would need. Their rates are about average for the industry, and their financial strength is superior to most of their competitors. They have received high marks from consumer satisfaction studies, and they operate across the entire United States. State Farm is a good choice for anyone with complicated insurance needs or someone who prefers working with an agent.
For a list of companies that we recommend, visit our Best Insurance Companies page.
Best Insurance Quote Providers:Auto Insurance - Liberty Mutual
Home Insurance - Liberty Mutual
Life Insurance - QuinStreet Life
Health Insurance - eHealthInsurance
Business Insurance - Hiscox Insurance
About the Author
I am a former insurance agent turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.