We Recommend Liberty Mutual
Liberty Mutual recently passed the century mark, and it’s been a good hundred years. Since their beginnings selling worker’s compensation policies in 1912, the company has grown to be the second largest property & casualty insurer in the U.S. as well as one of the top ten auto insurers.
Liberty Mutual Summary
While Liberty Mutual has a long history, it’s not quite as confusing as that of many other large insurance companies, without a lot of name-changing and major mergers.
The company did start out under another name, Massachusetts Employees Insurance Association in 1912 to provide the worker’s compensation polices that had just become legally required. It was only a few years later, in 1917, that the name changed to Liberty Mutual Insurance Company and auto insurance became their major product.
The company has acquired several other small insurance companies over the years, moving on to larger acquisitions as the company grew, most notable Safeco Insurance in 2008.
Since 2002, Liberty Mutual has been structured as a mutual, giving policyholders an interest in the company. They now sell a full range of insurance products both directly and through a network of independent agents across the country.
Liberty Mutual’s headquarters is in Boston, MA, where they constructed Liberty Mutual Tower in recent years, a large sign of a booming business that has landed them at number 76 in the Fortune 100. In the 2014 FIO report (PDF), Liberty Mutual took the second place spot among the largest property and casualty insurers in the nation.
A few of Liberty Mutual’s notable subsidiaries are:
The company also has global holdings in countries such as the U.K., Spain, India, China, Poland, and more.
Liberty Mutual’s Insurance Products
Liberty Mutual writes all of the basic lines of personal insurance as well as a variety of business insurance products. Their main focus is on the big three – auto, home, and life, but they also offer some specialty products, creating a good one-stop shopping choice for most people.
Here’s a breakdown of their products:
Liberty Mutual is among the older car insurance companies in the U.S. and one of the top ten, although they have a long way to go to catch up with frontrunner State Farm. Their auto insurance policies provide all of the basic coverage you would expect, with a number of options and add-ons.
Liberty Mutual has some of the extras you would expect from a major car insurance company, such as Accident Forgiveness, and also offers specialty coverage and add-ons such as:
- New Car Replacement
- Better Car Replacement, a benefit that provides an upgrade after a loss
- Unlimited Rentals
- Lifetime Repair Guarantee
- Teacher’s Insurance, which provides special coverage for teachers
In my opinion, these add-ons are used more for marketing rather than actually providing value. They ultimately drive up costs for the product as a whole, and provide negligible benefits. Unfortunately, nearly every major insurance company plays this game now.
Liberty Mutual offers a lot of discounts to make insurance rates more affordable, some of which are not found at their competitors.
- Affinity discount for affiliated groups
- Preferred payment methods discounts for paying in full or using automated payments
- New to Liberty discount
- Vehicle safety discounts
- Hybrid vehicle discount
- Teen driver and Good Student discounts for young drivers
- New Graduate/Newly Married/New Move Discount/Newly Retired Discount, all aimed at providing discounts for people experiencing life changes
Liberty Mutual has a good range of home insurance products to cover a variety of types of structures. Their standard homeowner’s policy covers everything you would expect, including replacement cost coverage for the home itself, personal property coverage, and liability.
Additionally, Liberty Mutual offers some added benefits with their homeowner’s insurance policy, some of which are uncommon. Like with their auto policies, Liberty Mutual has a loss forgiveness program with their homeowner’s policies to prevent rate increases from certain types of claims. They also offer emergency repair services and coverage for additional living expenses when a home claim forces homeowners to live elsewhere.
Discounts on homeowner’s policies include multi-policy, new home, home renovation and more.
In addition to standard homeowners, Liberty Mutual writes policies for a number of other types of homes:
- Condo Insurance, to provide for the specific needs of condo owners
- Landlord Insurance, which covers homes that are not owner-occupied and provides specific protection for the risks of being a landlord
- Mobile Home Insurance, which provides coverage for structures, liability, and more to protect mobile home owners
- Renter’s Insurance, which covers personal property for tenants as well as providing other protection
Liberty Mutual has a solid motorcycle insurance program that offers all of the basic coverage along with plenty of added benefits. Riders have a good range of discounts available to them that includes:
- Multi-policy and multi-bike discounts
- Safety course discount
- Experienced rider discount
- Safety features discount
Benefits include many of those available to drivers, such as New Bike Replacement. Coverage for motorcycle accessories is also available.
Specialty Vehicle Insurance
Liberty Mutual covers a good range of specialty vehicles so that you can have all of your toys covered in one place. Policies are available for:
- Boats and Watercraft
- Classic Cars
- ATVs and Off-Road Vehicles
- Recreational Vehicles
We should note that in order to take out a specialty policy with Liberty Mutual, the company requires that you have an underlying auto or home insurance policy first, depending on the type of specialty vehicle. Boat and watercraft policies require that you have home insurance with Liberty Mutual, while the rest require auto.
Liberty Mutual has been writing life insurance since 1964, and it’s a big line of business for the company. Life insurance products from the company fall into the basic categories you would expect:
- Term Insurance in a variety of term lengths
- Whole Life
- Universal Life
- Annuities, which are offered in four different products, Builder, Balance, Foundation, and Flexible Payment, all of which offer differing payment and interest options
Liberty Mutual writes a lot of business insurance, ranging from small up to the large businesses in a variety of industries.
Liberty’s small to mid-sized business coverage is offered to companies with fewer than 1000 employees, and coverage is also available for large businesses over that threshold. Among Liberty’s options for business coverage are:
- Commercial Auto Insurance
- Business Owner’s Policy, which combines liability and property coverage
- Employee Benefits including disability, life, and leave of absence coverage
- General Liability
- Group Programs
- Commercial Umbrella
- Worker’s Compensation
- Specialty Programs
Additionally, large companies have access to further coverage for the needs of larger business activities, including:
- Excess Liability Insurance
- Multinational Coverage
- Surety Bonds
Liberty Mutual Prices and Premiums
In price comparisons, Liberty Mutual comes out looking like a very good value for auto insurance customers.
Rates for auto insurance fall well below the average using our sample test information, which is surprising for a company of this size that writes a lot of policies through agents. Commissions have a tendency to drive prices up, but in this case Liberty Mutual manages to keep rates low in spite of that added cost. It also helps that the company doesn’t exclusively sell through agents, allowing the option to buy direct and cut out the middleman.
Part of the reason for the lower rates may well be a good selection of discounts, which is one of the best ways for auto insurance customers to bring down their rates. Liberty Mutual offers many ways to do this, with discounts applying to all ages.
It’s worth noting that the test sample is for a driver with a good record, and drivers with tickets and accidents often find the big companies to be expensive. However, with rates for good drivers on the low side, odds are good that many drivers will find rates competitive from Liberty Mutual.
Quoting is available online on the company’s website, which makes it easier to compare when shopping for insurance.
Liberty Mutual has a great claims section on their website, with easy access to contact information and a rundown of the claims process. Claims can be reported in multiple ways:
- Through the mobile app
- Over the phone at 1-800-2CLAIMS
The claims process is clearly defined, and customers can track their claim easily online through the customer portal, through the mobile app, and even through text notifications sent directly to a mobile phone.
After the original claims report, there are several ways to proceed with estimates and repairs. Liberty Mutual’s Express Estimate option allows claims for minor damage to be handled quickly, with photos sent through a mobile app and an estimate usually available in one business day. Customers can also bring their car to:
- A Liberty Mutual Drive-In facility, if available in your area
- One of Liberty Mutual’s Guaranteed Repair Network repair shops
- Any repair shop of your choice
Liberty Mutual will then review the coverage and the estimate, and in most cases pay the repair shop directly, less a deductible if applicable. Liberty Mutual will guarantee any repairs done at a shop in their approved network for as long as you own your car, which can take some of the worry out of having repairs done and also addresses common fears that approved shops are cutting corners to save the insurance company money.
Total loss claims are paid out depending on what policy options you may have chosen, so those with New Car Replacement or Better Car Replacement can expect to take less of a hit for depreciation.
Overall, Liberty Mutual appears to have put a lot of thought into the claims process and makes it very easy to report claims – which may be why they have a better rating in that particular category.
In the J.D. Power 2011 Insurance Shopping Study, Liberty Mutual ranked fifth overall. It earned 851 out of 900 points and a four-star rating. In the 2012 Customer Satisfaction Study, it ranked three stars out of five, with 770 points out of a possible 900.
A 2013 J.D. Powers study titled Auto Insurance Purchase Experience survey, ranked Liberty Mutual at four out of five stars overall. It earned a five-star rating in policy offerings and local agent quality, with four stars for price and three stars for call center representatives and insurer website.
Liberty Mutual once again received high ratings for its customer experience with the process of quoting and purchasing insurance in 2015. Another J.D. Power survey gave the company a 4 out of 5 rating for the overall purchase experience.
Liberty Mutual has been Better Business Bureau accredited for a long time – since 1931 in fact – and currently carries an A+ rating. There are 1251 complaints lodged against the company in the past 3 years, with 415 closed in the past 12 months. Those numbers are pretty high in comparison to other companies of a similar size. Here’s a look at the three insurance companies closest in auto market share and their BBB numbers:
- Nationwide has 443 complaints in the last three years
- Farmers has 400 complaints in the last three years
- USAA has 972 complaints in the last three years
That puts Liberty Mutual at the top of the list for complaints. Other sources online offer much of what is expected for negative reviews against a large insurance company, with few positive reviews – something that is common because most people only write a review when they are dissatisfied.
On ConsumerAffairs.com, there are 166 ratings of Liberty Mutual Auto, and 142 of them are negative, one-star reviews. There are only 5 positive reviews. Overall though, it’s a low number of ratings, with other similar companies having many more complaints filed on this site.
As for what the reviews say, customers cite premiums changed without warning, problems with the company being unresponsive, and refusal to pay claims.
Of these complaints, the raising of rates is something of a red flag. When you have a company performing well in original quote comparisons and then multiple reports of rates being raised by large amounts on renewal, it impacts the positive view of those low rates. A good rate that only stays good for a year or two is not as good a value in the long run. On the other side of that coin, however, there are many reasons for rates to increase, and it’s difficult to judge from reviews whether the increases were warranted.
Advertising and Media
Liberty Mutual’s symbol is the Statue of Liberty, which for most people is not only a patriotic symbol, but also one of that represents strength and justice. It’s certainly a powerful choice for the company and serves them well.
Unlike a lot of insurance companies, Liberty Mutual doesn’t lean towards a lot of gimmicky, amusing advertising intended to entertain; instead their commercials are simple and informative.
The current advertising approach from the company is incredibly simple – the Statue of Liberty in the background while the benefits of Liberty Mutual coverage are explained. They don’t lean towards the dramatic, either, with the possible exception of this spot, which features a junkyard full of cars to illustrate just how common accidents are.
In an approach similar to Allstate, Liberty Mutual refers to “cut-rate” insurance companies frequently and leans on the idea that saving money on car insurance isn’t worth it if the coverage doesn’t do you any good when you need it. In this case, however, we’re talking about a company that performs well in rate comparisons, which makes the “you get what you pay for” approach to advertising an interesting choice over touting their lower rates.
Overall, Liberty Mutual’s advertising is unobtrusive, but that has a tendency to make it less than memorable as well. Certainly the commercials don’t stand out like the GEICO gecko or Flo from Progressive, but there is an argument for this type of uncomplicated approach as well: just the facts, without the show.
Like most big insurance companies, you’ll see the Liberty Mutual name in the sponsorship game. Most notable, the company is a sponsor of the Team U.S.A for the Olympics and Paralympic teams. They are also involved in numerous charitable organizations.
An overview of Liberty Mutual wouldn’t be complete without a look at recent controversy over the handling of company funds by top executives. The Boston Globe wrote a series of scathing articles, including this one regarding the $4.5 million renovation of a single office in the company’s headquarters. The articles accused the top officers at the company of using money from a mutual company – in which the policyholders are meant to be mutual owners of the company – for extravagant lifestyles. It also points to the tax breaks given to Liberty Mutual for construction of their new headquarters.
In the meantime, Liberty Mutual had also been fighting for years in court in a case dealing whether certain employees should receive overtime pay.
While it’s certainly not uncommon for executives at large companies to have big paychecks and plenty of benefits, these stories can have a negative impact on public opinion. These issues have no direct impact on the company’s ratings in terms of products and services, but they are well worth mentioning, as they are part of the whole when it comes to how a company presents itself to its current and potential future customers.
Liberty Mutual has a long history with excellent ratings, and is praised for their communication with customers through the purchasing process. They are a solid company, financially stable, and offer an excellent range of products at a good price. For most people they are a one-stop shopping opportunity and they offer a really impressive list of discounts.
Liberty Mutual is likely to offer good rates for auto insurance over other major insurance companies, putting them high on the list even for budget shoppers who still want to buy from a major company. They are a top choice for both auto and home insurance.
For a list of companies that we recommend, visit our Best Insurance Companies page.