Federated Insurance Review

Federated Insurance
Financial Strength

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Federated Insurance targets its niche of the insurance world by focusing on a specific list of businesses and specialty products. The Minnesota-based company also has personal lines products, most of which are only available in their home state.

Federated Insurance Summary

Federated Insurance was founded in 1904 as Minnesota Implement Mutual Fire Insurance Company, and went through a series of name changes before settling on Federated Mutual Insurance Company. Their initial products were aimed at implement dealers, as it was from this industry that the company was born, but they soon expanded to offer products to other types of businesses.

In 1948 the company began offering both fire and casualty insurance, adding accident and health insurance policies, and in 1959 opened the life insurance branch. Today, the company operates in 49 states and the District of Columbia, and specializes in business insurance for specific industries. Group health and life products are also available in some states.

The company does write auto insurance, home insurance and umbrella insurance for individuals, but only in the state of Minnesota at the time of this review.

The company’s headquarters is located in Owatonna, Minnesota, with another regional office in Phoenix, Arizona and branch claims offices throughout the country. Representatives sell Federated products individually in each state.

Insurance Products

Federated writes mainly business insurance products, but does offer a limited selection of personal insurance as well. Their products are mainly aimed at businesses of a small to medium size that fit within certain niche markets.

Property & Casualty

As Federated’s biggest product, they write a wide variety of specialty property & casualty products for a wide range of industries.

Their areas of specialty include:

  • Auto service centers
  • Building materials dealers and wholesalers
  • Custom woodworking and cabinetmakers
  • Contractors in various fields
  • Equipment dealers including dairy, agricultural, and more
  • Franchised auto and truck dealers
  • Jewelers
  • Machine and tooling shops
  • Motorcycle dealers
  • Petroleum marketers, convenience stores, and transport
  • Printers
  • Retail operations in the areas of farm, hardware home supply, and more
  • Tire dealers
  • Wholesalers

Coverage is available for a long list of business needs, including various types of liability, Worker’s Compensation, Ocean Marine, Foreign Exposure, and many more. Policies are custom-designed to meet the needs of each business.

Group Health

Federated has group health insurance plans designed for small to medium-sized businesses. The plans, known as Federate Health Choice, are available in about half of the states the company serves.

Group plans include:

  • Medical
  • Dental
  • Disability
  • Life
  • Prescription Drug Benefits

Life Insurance

Federated has been writing life insurance for over 50 years and writes for both individuals as well as group life programs for businesses. They offer a range of products in a number of states.

Financial Products

In addition to basic life insurance, they also write disability income policies for individuals and businesses, and offer individual retirement plans. Among these are various types of IRAs and annuities.

Auto Insurance

Federated’s personal auto insurance program is available only in Minnesota. They write a range of coverage with their “driver’s choice” program, which allows drivers to tailor the policy to their particular needs In addition to basic liability, available features include 24/7 roadside assistance, rental car reimbursement, and full glass coverage.

Federated also offers a good lineup of discounts, including deductible reductions and other special discounts rewarding drivers for years of safe driving.

Home Insurance

Like the auto program, home insurance is only available in Minnesota. Federated writes both standard homeowner’s, for single-family dwellings with replacement cost structure coverage and more, as well as renter’s insurance.

Umbrella Insurance

Federated writes umbrella insurance policies only in Minnesota, offering individuals expanded liability coverage up to $5 million.

Prices and Premiums

Federated offers online quoting for their car and home insurance programs for Minnesota residents only. Since these policies are not available nationally, it is difficult to compare rates. Their quoting system requires a fairly extensive amount of information, making it hard to get quick comparisons.

Federated is mostly a business insurance company, and rates for this sort of policy are not easy to compare given the nature of business insurance. As a major competitor in this market, particularly the specialty areas the serve, Federated can be expected to have competitive rates.


Federated has claims branches in several states to allow for faster and easier processing of business and life insurance claims. These claims can be reported following the easy instructions provided on the company website. The website also offers downloadable forms and resources to assist with understanding the claims process.

Since business insurance claims can be very complex, it’s difficult to determine any sort of length of time on claims processing.

Federated personal lines claims go through the same claims line as the business policies use. There is also an online claims form that can be used to submit certain types of claims, including auto.

Consumer Feedback

Federated is not BBB accredited, but has an A+ rating. There are only 15 complaints against the company in the past three years, six of which were closed in the past 12 months. That’s a very small number for so large a company, although this may reflect the focus on business rather than personal insurance, as personal lines policies tend to attract more reviews and complaints overall.

A search returns very few complaints against the company overall, and nothing else of major concern in terms of company reputation.

Financial Strength

Rating Company Grade Financial Outlook
AM Best A+ Stable
Fitch N/A N/A

Bottom Line

Federated Insurance is mainly a business insurance company, and for those running small to medium-size companies that fit into Federated’s niches, they are likely a good choice to consider. They also have a strong life insurance program, both for businesses and individuals.

When it comes to personal insurance, it’s only available to Minnesotans, who may want to consider a quote from the company especially if they are looking to select a homegrown insurer over a national one.

For a list of companies that we recommend, visit our Best Insurance Companies page.

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Review Information

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Federated Mutual
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  1. Catherine Johnson says

    We were just given the rates by Federated for family medical insurance from a new employer. Of course you have 3 choices all with different deductibles, co-insurance and coverage. The deductibles range from $2000 family to $12,000 family. The rates are calculated per person according to our ages. We have a family of four. ( 2 adults, 2 children )To choose the plan with the lowest deductible $2,000 would include an out-of-pocket cost of 20% co-insurance plus co-pays. The plan with the highest deductible at $12,000 has a 0% co-insurance. Mid-range plan is $6,000 deductible for family with 0% co-insurance. All of these quotes are in-network providers only. For our family to choose the lowest deductible $2000 with 20% co-insurance is $1517.76 per month for premiums plus co-pays. For the highest deductible plan at $12,000 for a family of four with 0% co-insurance would cost $1130.52 plus co-pays. Tell me, please. Which would you choose? Paying $18,213.12 per year for premiums to get the lowest deductible of $2000 plus 20% co-insurance and co-pays or would you pay $13,566.24 per year for premiums but have the highest deductible at $12,000 with 0% co-insurance plus co-pays. Keep in mind, we also would need to add $1599.36 for Dental and $409.80 for Vision per year, as well. Or would you take your chances, pay the fines required for being uninsured with the Affordable Care Act laws, and possibly still be able to keep your house as long as no one got sick? Because these health care costs are higher than my $1355.58 mortgage payment. Also, I would need us to get sick enough to reach our deductible for you to cover any costs at all. So please tell me, what would you do?

    • Eric Stauffer says

      Hi Catherine,

      It looks like you have a good grasp on the actual costs from health care, and are at the point of determining whether to take the risk or not. I can assure you that you are not alone, since I sit down and do this calculation almost every year.

      I can’t tell you what to do here, since there are way to many variables and your risk tolerance may be different than mine. All I can do is mention how I like to do the math.

      First, I calculate the total cost of the premiums. You have already done this, so that is good. You will be out this cost, regardless. Its your fixed cost.

      Second, I calculate the worst-case scenario for each plan. Basically pretend you have a $100,000 bill that will max your annual out of pocket. This gives me the most I could be on the hook for.

      Third, I calculate the total cost for each plan at various expense levels. What if I have $1,000 in bills? $5,000? $10,000? This will reveal the break even points for each plan as they are compared to each other.

      What I generally find at this point is one plan usually has a much lower fixed cost to the tune of thousands of dollars. As a rather healthy family, I tend to lean toward these ones, especially if I can contribute to an HSA in the process.

      As far as forgoing insurance altogether – That is something you will need to determine for you and your family. I certainly understand the situation, given the ridiculously high cost of health insurance these days.

      Eric Stauffer

  2. Curtis W says

    I have a claim with Federated Mutual insurance. I feel as though they are doing everything possible to make my life miserable. They have never even returned a phone call.

  3. randy says

    i have federated heath and they don’t want to pay for a medication i NEED to get better. Please help.

    • Eric Stauffer says

      Hi Randy,

      If you are having a problem with your insurance company and believe they are treating you unfairly, I would recommend filing a formal complaint with the insurance commissioner’s office in your state. If you want to post which state you are in, I would be more than happy to find the contact information for you.

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