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Farmers Insurance Group Overview
Farmers Insurance Group is one of the most recognized brands when it comes to personal insurance in the United States, and for good reason. They are one of the top 5 largest auto insurance companies, with around 6% of the entire market.
A lesser known fact is that Farmers is actually a subsidiary of a much larger organization, Zurich Financial Services. Zurich is a multinational firm that has a footprint all across the globe. Farmers serves as its United States arm for property and casualty insurance, and well as life insurance products.
Moving another level down the organization chart, there are a handful of fairly popular insurance companies that ride under the Farmers banner. They include:
These additional brands give Farmers Insurance agents more flexibility when it comes to writing policies.
Why is this important to you?
Farmers’ sales force is primarily made up of what are called Captive Agents. A captive agent is an insurance salesperson that is only allowed to sell products for a specific company. That means they cannot go out and get appointed from multiple firms, thus limiting their options when providing coverage for clients.
Each brand that Farmers owns and operates has a unique set of underwriting guidelines and risk profile. So that means premiums will vary from company to company. Because of this, you may walk into a Farmers Insurance agent’s office, but walk out with a Bristol West policy because it can provide better coverage at a more affordable price.
The bottom line is it gives Farmers agents more flexibility and options when it comes to writing policies.
Products and Services
Farmers is truly a one-stop-shop when it comes to personal insurance. That means for the vast majority of individuals and families, they will be able to get all the coverage they need under one roof.
Does that mean Farmers is the best choice?
We will figure that out in the rest of this review. But for now, let’s take a look at their extensive list of product offerings. Below the list you will find my thoughts.
- Car Insurance – Like most large consumer insurance companies, this is their bread and butter. Whether you are looking for a state minimum liability or full coverage policy, Farmers can make it happen.
- Home Insurance – Homeowners insurance and condo insurance fall under this category. Customers can get standard coverage options, as well as popular add-ons like scheduled personal property and identity theft protection.
- Renters Insurance – Similar to home insurance policies, except they do not cover the structure. Farmers’ renters insurance policies are fairly standard compared to competitor’s offerings.
- Life Insurance – These products are not technically sold under the primary Farmers Insurance brand, but rather a subsidiary. The usual suspects are available: term life insurance, whole life insurance and variable life insurance.
- Business Insurance – Although typically thought of as a personal insurance company, Farmers does offer a number of business insurance products such as workers compensation, business liability, business auto, and commercial property.
- Motorcycle Insurance – It’s easy to assume that GEICO is the only company that sells motorcycle insurance, since they seem to be the only one advertising it. However, Farmers offers basically the same coverage.
- Recreational Insurance – Farmers offers coverage for RVs, boats, off-road vehicles, motor homes, travel trailers, and 5th wheels.
- Umbrella Insurance – This serves as an extension of auto and home insurance policies, by adding a sizable amount to the overall liability coverage. It also can fill in the gaps where a typical home insurance policy may fall short. For example, if you are sued for libel or slander, umbrella policies can often pick up the attorney fees and/or judgment costs.
As you can see, Farmers offers a number of insurance products and makes it possible for many people to solve all their coverage issues with one agent.
Here are my thoughts:
There has been a trend lately among large insurance companies, where they try to differentiate themselves by offering ridiculous insurance add-ons that ultimately just cost customers money.
A prime example of this is the magically disappearing deductibles. Companies like Safeco and Nationwide heavily promote these features, which in my opinion, act as nothing more than a way for insurance companies to drive up rates.
The current state of the insurance industry (especially auto insurance) is not so much companies trying to provide better products and services at a lower price, but rather trying to win over customers by using gimmicky products (like vanishing deductibles) or rebranding a standard coverage option as something unique to them. (I am specifically looking at you Nationwide, and your Brand New Belongings add-on.)
The good news here is Farmers doesn’t participate in this as much as some other companies.
It’s refreshing, to say the least, that one of the five largest auto insurance companies is not jumping on the magic deductible bandwagon.
That being said, Farmers is not without their gimmick add-ons.
The summary of this add-on is that Farmers will forgive one accident within a three year period. What that means for you is an accident will not be factored into your rates, as long as it qualifies.
I have gone back and forth on this over the years, but now I am pretty set against it. Here is why:
Insurance companies base just about everything off averages. They know, on average, X amount of people will do this, so they charge $Y to cover the cost. In addition to covering the cost, they also need to earn a profit, otherwise the entire option becomes pointless.
That means on average, drivers that purchase this add-on will end up paying more into it than they will receive back over a driving lifetime.
Let me be clear, some people will benefit from having this and may actually come out ahead. But most people will not. It’s like an extended warranty.
We already pay more into insurance than most of us get back in our lifetimes, so why add to the deficit?
There is nothing overly concerning or that stands out when it comes to Farmers life insurance products. However, I do want to add a bit of my personal opinion as it relates to life insurance as a whole.
I am a strong believer that most people can benefit greatly from a properly structured term life insurance policy and investment portfolio over a permanent life insurance product like whole life. In fact, I even wrote an entire post about it with examples:
The 30,000 foot view of the article as that the cost difference between a term policy and similar whole life policy is so dramatic, that you can invest the difference and almost always come out ahead long term (with appropriate investments).
As the customer, you should be aware that insurance agents make huge commissions on permanent life insurance products, and that is a big reason why they are sold as “great investments.” Most financial advisors that are not paid by life insurance commissions agree they are not.
So what does this have to do with Farmers Insurance?
It really doesn’t, beyond the fact that their agents do sell term and permanent life products. I just want to make sure you are armed with this knowledge before sitting down with someone who has a vested interest in selling you a permanent life insurance product.
Ready for a break? Watch my video review of Farmers Insurance.
Farmers Insurance Rates and Premiums
Until a few years ago, the only way to get a quote from Farmers was to work directly with an agent. Now you can start a quote (and see a rate) on their website, and then have it forwarded on to a local agent in order to finish the process.
The quote process is quite simple on the website, and the flow is pretty clean. I mention this because some insurance companies make getting a quote online very clunky, and/or require way too much information just to see a price.
But the good news stops there.
The results of my quote test showed Farmers is pretty expensive. In fact, they came in almost 15% above the average (14.36% to be exact).
This is the thing about agent-driven insurance companies; they have to pay pretty large commissions to their agents for each new policy and renewal. This differs from direct insurance companies like GEICO, Progressive and Esurance, who can often skip the middleman in these scenarios.
Farmers Insurance does not target low-cost shoppers. And with good reason, given how expensive our test came back.
Advertising and Media
I have to admit, I personally like Farmers’ ad campaign showcasing Professor Burke (J.K. Simmons) as an all-knowing insurance guru. My current favorite is this one with the Lamborghini.
The gist of the campaign is that a Farmers agent will help you find where there are coverage gaps, as well as show you where you are over-insured.
The message is actually good advice, which is that many people just buy insurance and then forget about it. Instead, it should be actively monitored to make sure no gaps in coverage arise.
There is another marketing gimmick appearing in the insurance industry and it revolves around the idea that a particular company is able to better find coverage gaps and missed discounts because they offer some special “second check” of your policy.
You may have heard of them:
- Discount Double Check (State Farm)
- On Your Side Review (Nationwide)
The reality is every insurance agent should be doing that anyways.
Whether you are buying an insurance policy from them for the first time, or you are an ongoing client, a good agent should be reviewing your coverage on a somewhat regular basis to ensure you are adequately protected.
Farmers Insurance Claims
For many people, the two most important aspects of an insurance company are rates and claims. Unfortunately for Farmers, their rates are not that great. What about their claims handling?
Let’s start by looking at how you can file a claim:
- Phone – 800-435-7764
- Online – Claims Center
- Smartphone App – Farmers iClaim
Once the claim has been filed, a representative will contact you in order to fill out the rest of the request. This part is important because the agent will use your answers in determining coverage, fault, payout, etc. They may also schedule an in-person interview if needed.
After the pertinent information is gathered, the covered item will be inspected for damage and a loss total will be established. Farmers has a network of repair facilities they prefer their customers use, but you are not required to.
Farmers provides a pretty useful outline for their claims process on their website, and you can view it here.
The process seems pretty boilerplate, but how does it stack up against their competitors?
As previously discussed, Farmers Insurance is huge. Therefore, their claims process is quite efficient. They have a number of preferred repair shops throughout the country, and they have a large number of claims agents that can be mobilized to just about everywhere.
Because of their size, they can also set up mobile claims centers in certain disaster areas after a major incident. For example, if a flood or hurricane hits a location, they can send a number of people to that specific spot in order to help with all the claims processing.
While that all sounds good in theory, how do customers actually feel about Farmers’ claims process?
Customer sentiment about Farmers claims handling is not as positive as one might hope. When researching for this review, I came across a lot of complaints about the results of Farmers claims. These complaints came from people insured with Farmers, as well as those involved in an accident with a Farmers insured customer.
This leads us to our next section – Customer Feedback
Complaints about Farmers can be found all over the internet, even right here on this page. Below this review you will find other people who have taken the time to share their experiences with Farmers in the comment section.
Here are a few complaints that stand out:
With farmers close to twenty years, car and home. Rates just kept climbing for no reason. Had hail damage to roof. They sent an inspector (came from Wisconsin. I live in Illinois). He did not even have a ladder to get on the roof. Expert denied my claim. Would never recommend Farmers to anyone.
I’m an attorney representing a client whose car was destroyed in a massive front end collision by a Farmers insured. After my client was hauled away in an ambulance to an ER with a concern about a head injury, this [Farmers] schmuck had the gall to ask, “if it was necessary to activate the whole trauma team for a diagnosis of abrasion.”
Now, if you’re a Farmers insured, you might think this is what you want your insurance company to do. But here’s what’s likely to happen. I’m going to have to sue the Farmers insured because her insurance company isn’t evaluating the claim fairly. She paid premiums not to have that happen…
A covered Farmers vehicle rear ended my car on 11-29-2012 in Tucson AZ. The man gave me his insurance information and i called almost right away. I went to an emergency room for my neck pain and ran up a $6000.00 bill. The Farmers agent from Washington State was rude. He took my statement and i submitted my bills to the claim center in Oklahoma City… I have had to do this more than once and on the website it shows open, Medicare paid but i have no proof that Farmers did a darn thing. And no documentation comes in my mail or email. I WOULD DIE BEFORE I PAID FOR FARMERS INSURANCE AND IF I EVER GET IN AN ACCIDENT I PRAY THE OTHER CAR DOES NOT HAVE FARMERS!
I kept farmers insurance after my husband got Alzheimer’s. I bought an investment property to pay for his care, and i sold my house to do it. Anyway, a tenant’s son who moved away, got drunk and fell… Broke a window. I called farmers to fix the window and they declined.
The comments on other websites do not look much better:
According to a person on Pissed Consumer, Farmers questioned their claim because the insured did not have a lot of money in the bank and had a bad credit score. This individual felt as if the Farmers adjuster was accusing them of stealing their own stuff (or faking it) in order to receive an insurance settlement.
Another individual declared on the same website that Farmers low-balled their settlement after being hit by Farmers insured driver. According to them, both drivers had Farmers insurance, and they have been fighting over their settlement for a long time.
Low-cost insurance shoppers and DIY people will probably want to look elsewhere.
Insuring with Farmers is probably not going to get you the best deal, unless you can bundle a lot of products together and get some good discounts. They are best-suited for individuals, families and businesses that have complicated insurance portfolios and need the help of an agent to get adequately protected. But even in that scenario, I think there are better options out there.
While researching for this review I came across a lot of complaints about Farmers’ claim process. (Some of which can be found in the comments section below.) While it is not unusual to find a large number of complaints for an insurance company this size, the ones I found were overwhelmingly about claims-related topics.
For a list of companies that we recommend, visit our Best Insurance Companies page.