State Farm Insurance Review

RATINGS BY CATEGORY
Premium Price
Claims Process
Consumer Feedback
Financial Strength
OVERALL
Products  |  Price  |  Claims  |  Complaints  |  Financials  |  Bottom Line

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.

 
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Insurance Products

Auto Insurance

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.

Home Insurance

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

Life Insurance

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.

Additional Products

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)

Quote Test Results
+ 2.2%
Rate Test Details

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.

Claims

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.

Financial Strength

Rating CompanyGradeFinancial Outlook
AM BestA+Stable
FitchN/AN/A
S&PAAStable

Bottom Line

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.


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About the Author

Eric Stauffer

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.


Comments

  1. Richard E Grimes says

    We have a justified complain against State Farm Insurance and the agent that we’ve had to deal with. After many calls to him and receiving a different story about why we hadn’t received the check for the damage done to our property by one of State Farm’s insured customers. We were told the check was mailed on 5th of July and as of 7/11/14 we hadn’t received. My husband called the agent on the 11th and he upset my husband so much with an additional lie he told us. At that point I ask my husband to let me talk to him, I told him we had been told so many lies and he told me he wasn’t a liar and hung up on me. I’ve never had a experience like this before. We had nothing to do with the damage done to our property but we are the ones that are having to deal with an agent for State Farm that is rude, and could care less, the situation he has put us in. The insured that is insured with State Farm knocked down our brick mail box and a retaining wall. There is a police report that shows he was ticked for failure to maintain his vehicle. I don’t understand why we are the ones suffering from this damage and have not had anyone to try and help us out with this claim. Insured’s Name-[Redacted], claim #[Redacted]. Our Property address: [Redacted]

  2. Joseph Larry says

    I am a customer of State Farm and I’m thinking about going to another company. The reasons are as follows:

    A rock hit and broke my vehicle’s fog light. I called my agent. We talked on the phone for quite a while and was given all kinds of bad information. After answering all the questions, we were told that we could go and get it fixed, but it was recommended by the agent that we go to one of their listed businesses to get an estimate, and we will also told that we could go to a place of our choosing, which is not really true based on the experiences that I had with them. We informed them that we were going to North Point Toyota on Landers Road in North Little Rock, and also gave them the ZIP Code. This started on a Friday. They said they would call and inform North point Toyota of this, but it didn’t happen. They called another company and deliberately tried to guide us to where they wanted us to go. We arrived at North point Toyota Tuesday, and we asked had State Farm called as a salesman scrambled around China sign information about our claim. we decided to call State Farm again. We were put in contact with another agent, and then were told at that time that we had to go to a claim office in which they located for us that wasn’t too far away. I was baffled because I thought this would be a short easy process for something this minor. And so we are constantly losing time because each time we talked to State Farm we were given a little bit more of the information instead of us getting everything on the initial phone call that we made about our claim. So after arriving at the next claim station, we were told that they couldn’t do anything for us until a claim adjuster showed up and he wouldn’t be in until tomorrow. We had already located the part at North Point Toyota, and gave that information to [Redacted] the Collision Repair Coordinator on Landers Rd., Sherwood, AR 72117. He told us what it would cost to get it repaired, which was cheaper than North Point Toyota, but they could not get the part until State Farm sent them some type of correspondence. But this is beginning to be too long to process. Bottom line, we were not given all the information needed to process this claim, we were guided to a company that we had no interest in after being told we can go any place that we wanted to go, and our time was wasted, which we know will not be able to get back because of this process.

  3. says

    Hello,

    One incident among many so my one experience does not mean much in the “scheme of things.” However, my tale is better than none at all.

    Large tree branch fall upon my nearly-new pick-up truck. Thud. Hood and grille and fender crunched. Luckily, only sheet metal damage. I followed that offering of using a repair facility approved by State Farm. It was a local Chevrolet dealer body shop at the dealership. The work was done quickly but not so fast as to indicate slip-shod work. The truck looked like new when finished. That was eight years ago and the repair job, including the new paint, has held up so that there is no indication that repair work had ever been done.

    Having a top-notch repair facility on State Farm’s go-to list suggests to me that State Farm cares about its customers.

    And, my dealings with the several agents across the land as I moved to and fro, has led to my remaining with State Farm for decades. I feel confident referring the firm to those seeking insurance.

    I also have home owners insurance but never any need to file a claim.

    Thank you for this site that offers useful information!!!

    Have a great week!!!!!!!!

    • Eric Stauffer says

      Hi Obbop,

      Thank you for taking the time to leave your feedback. Usually when people are satisfied, they are less likely to hit the internet to share their experience. Good to know there are some agents and companies out there doing their job correctly!

      Best,

      Eric Stauffer

  4. Ron says

    My State Farm homeowners policy was just cancelled because as their letter stated, “The risk is no longer acceptable to State Farm Fire and Casualty Company due to your loss history.” We had ONE, yes I repeat, ONE loss, the result of water damage from the apartment above. The cancellation letter further references New York homeowners whose properties is located in or around coastal areas. I live on the 8th floor of a 14 story high rise coop apartment building located NO WHERE near the coast.

    Why have insurance if when you file ONE CLAIM, your policy is cancelled and the “risk no longer acceptable.?”

    State Farm ought to be put out of business.

    • Will says

      Ron,

      It’s not like State Farm is the only company that you can buy insurance from, so it sounds like you are more “hurt” that they are dropping you. You fail to realize that it may have nothing to do with “your one claim” and more to do with the building you are living in / area. Every property is getting looked at, and you having a water damage from leaking pipes or upper stories may just be a red flag.

      You also fail to mention how much you were paying in premium and how much State Farm acutally paid out in the claim. Did you have the policy for a year, two, five, ten? What was the total premium paid in and how much did State Farm right you a check for?

      As you state New York Costal areas are being reviewed and State Farm may just be pulling out to lessen their exposure. This is not criminal, this is just a company choice.

      In close State Farm is a MUTUAL company so they have a duty to ALL policyholders ALL over the United States, not just New York. If Florida, California, and New York are deemed too risky you may just be caught in restructuring of risk.

      Risk and Risk Management is what insurance companies strive to do most effectively. In insurance a good rule to live by is: Don’t use for the Inconveniences, Use for the Devestations.

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