Kevin Mercadante |
- State Farm is the number one auto insurer in America
- State Farm offers rideshare insurance, which can be added to a personal auto insurance policy, keeping their customers safe during work and pleasure.
- State Farm offers programs like the Steer Clear driving course for drivers under the age of 25 as well as Drive Safe and Save, which is a device that awards you for good driving.
- The company provides a long list of discounts to help get the lowest rates for policies, as well as a mobile app that allows you to shop for insurance, pay bills, and file claims right on their mobile app.
We all know about Jake from State Farm, wearing khakis at three in the morning, and the famous motto, “like a good neighbor, State Farm is there”. Those famous commercials have built a strong following for State Farm, but commercials aren’t the only reason State Farm is the number one company for auto insurance. State Farm offers a large selection of products and services, all sold by the company itself, as well as a wide range of discounts to help you get the best rate.
About the Company
State Farm is the largest auto insurance provider, based on direct premiums written, with 16.2% of all auto insurance in force in the U.S. The company has more than 83 million accounts, with over $40 billion in direct premiums written.
Although the company offers a large variety of other services, their main product is car insurance. In this review, we’re going to focus on State Farm car insurance, and also spend some time on their home insurance offerings.
State Farm Car Insurance
Basic features of State Farm car insurance are as follows:
- Availability: All 50 states, plus the District of Columbia
- Covered vehicles: Autos, classic cars, snowmobiles, motorcycles, RVs, recreational vehicles, ATVs/UTVs, campers, dune buggies, golf carts, trailers, mobile homes, and boats
- Customer support: 24/7, 365 days a year by phone
- Claims satisfaction: According to the JD Power 2020 US Auto Claims Satisfaction Study (released in October, 2020), State Farm ranks #6 out of 24 companies providing car insurance nationwide. They score 881 out of a potential 1,000 points, which is above the industry average of 872.
- Financial strength rating: A++ (Superior)
- Better Business Bureau ranking: Not Rated
How to Sign Up with State Farm Car Insurance
Signing up for State Farm can be done online or by phone, as well as finding your local State Farm office and getting a quote in person.
Much like other insurance quotes, State Farm’s application requires basic information as well as your driver’s license number or social security number to get a quote. The application will also require either an email address or phone number from the applicant.
If you prefer live contact, State Farm has a network of offices and agents across the country to walk you through the application process.
State Farm is number one for a reason, and although they don’t always have the lowest rates, they do offer a long list of discounts as well as great customer service. Here’s what makes State Farm so great:
- Large number of discounts: State Farm offers many discounts for any policy.
- Accident-Free Discount: Discounts can be applied to your policy if you go three or more years without any accidents or claims.
- Accident forgiveness: Offered to customers who’ve been with the company for 9 years and have no accidents.
- Drive Safe and Save: A device in your car that allows you to keep track of your driving through the State Farm app, savings vary based on how well you score.
State Farm Auto Insurance Coverage Options
State Farm offers standard auto insurance coverage provisions.
- Bodily injury and property liability coverage.
- Collision and comprehensive coverage.
- Uninsured and underinsured liability coverage.
- Medical payment and personal injury protection coverage.
Optional coverage provisions include the following:
- Rental car reimbursement and travel expenses: Your car must be undriveable in order to qualify, and you’ll receive reimbursement for a rental car while your vehicle is in the shop being repaired as well as up to $500 in travel expenses.
- Rideshare coverage: Extends from your regular auto insurance policy and provides coverage when you’re logged into your ridesharing app and waiting for a trip request or if you’re a driver waiting for a customer.
- Roadside assistance: Includes towing, lockout service, delivery of gas, oil, battery, or a flat tire change, and up to one hour of mechanical labor at the breakdown site.
- Drive Safe and Save: Provides a score of how well you drive and discounts your premium based on your score.
NOTE: State Farm does not offer GAP insurance however, they do offer a Payoff Protector. If you have an auto loan through State Farm, the benefit covers the outstanding principal balance if your car is totaled or stolen. Otherwise you will need to obtain gap coverage from the dealer or lender on your vehicle.
State Farm Discounts
State Farm offers one of the most extensive lists of discounts in the auto insurance industry.
Below is a list of the discounts they offer, and the average premium savings you can expect:
- Passive Restraint: varies (airbags, seatbelts, etc.)
- Anti-Theft System: varies
- Drive Safe and Save: up to 30%
- Drivers Training: varies (under age 21)
- Good Driver: varies (three or more years accident- and claim-free)
- Defensive Driving: 10-15%
- Good Student: 25%
- Multi-Vehicle: 20%
- Multi-Policy: 17%
- Student Away at School: varies (under age 21)
- Steer Clear: 15% (under age 25)
To provide reasonable estimates of State Farm car insurance premiums, the table below presents semi-annual premiums for four drivers under six scenarios each. We’ve obtained these through direct quotes from the State Farm website.
Three quotes are based on liability amounts. Liability limits are expressed in a three-number sequence that looks like XX/XX/XX. The first number in the sequence is the amount of coverage for an injury to one person in an accident that’s determined to be your fault. The second number is the coverage limit for all injured parties in a single accident, while the third is coverage for property damage to other people’s property.
The limits we’ve used in our table are as follows:
1. 30/60/25 (the minimum coverage allowed in Texas)
In addition, the table also presents each liability coverage amount with uninsured and underinsured motorists, as well as collision and comprehensive coverage added to the basic liability policy.
We got quotes for four individual driver profiles, including a 23-year-old male, a 23-year-old female, a 53-year-old male, and a 53-year-old female. All four live in suburban Houston, Texas (Zip Code 77009), and drive a 2018 Toyota Camry 12,000 miles per year. None of the drivers has a moving violation or at-fault accident claim in the previous three years.
For simplicity’s sake, each driver is single, rents their home and has a college degree.
Here are the results:
|Coverage / Driver Profile||Male, 23||Female, 23||Male, 53||Female, 53|
|Rate for State Minimum –30/60/25 – Liability Only||$434||$360||$273||$274|
|With Un/Under-insured Motorist and Collision & Comprehensive||$1,083||$922||$685||$685|
|50/100/50 – Liability Only||$472||$391||$297||$297|
|With Un/Under-insured Motorist and Collision & Comprehensive||$1,189||$967||$724||$724|
|100/300/100 – Liability Only||$512||$423||$322||$322|
|With Un/Under-insured Motorist and Collision & Comprehensive||$1,199||$1,024||$772||$772|
NOTES: These are simplified quotes. For example, each driver’s credit history is not considered. Neither are certain optional coverages, like car replacement rental, roadside assistance, or GAP coverage for the payoff of a loan or lease.
Who State Farm Is Best For
Driver profiles and situations will vary, but State Farm may be the right choice for you if any of the following apply:
- State Farm is the lowest-cost provider in your state for your driver profile.
- You participate in ridesharing activities.
- You have multiple drivers and vehicles that will qualify for several volume discounts.
- You prefer dealing with a live agent, rather than an all-online experience.
- You need multiple insurance policy types that you want to keep with one company.
State Farm vs. Other Car Insurance Companies
The table below compares State Farm with three of the most popular auto insurance providers in the country: Progressive, Geico, and Allstate. We’ve used side-by-side comparisons of three popular coverage levels, as well as the claims satisfaction and financial strength rating for each company.
|Category / Company||State Farm||Progressive||Geico||Allstate|
|Average Annual Premium: State Minimum||$500||$516||$464||$756|
|Average Annual Premium: 50/100/50 with Collision & Comprehensive||$1,190||$1,106||$1,006||$1,754|
|Average Annual Premium: 100/300/100 with Collision & Comprehensive||$1,380||$1,346||$1,222||$2,140|
|J.D. Power Claims Satisfaction Rating||881/1,000||856/1,000||871/1,000||876/1,000|
|A.M. Best Financial Strength Rating||A++ (Superior)||A+ (Superior)||A++ (Superior)||A+ (Superior)|
The company that you feel will work best for you will depend on your own driver profile, your state of residence, and the specific needs and preferences you have for your policy.
SOURCE: Average Cost of Car Insurance in 2021 from The Zebra
What To Know About Auto Insurance
You’ll want to make sure that the coverage you carry matches your net worth. Cutting corners on price and coverage can leave you in financial ruin. If you find yourself in an accident, a lower premium may not provide you with enough coverage. Below are some things to look for when shopping around for a premium.
- Keep sufficient coverage: State minimum may not be enough coverage, especially if you’re a higher risk driver or you drive a newer, more expensive car.
- Clean credit: Insurers will look to your credit score when it comes to your premium. If you have a higher score, it’s more likely you’ll get a lower rate.
- Add important coverage options: Although most states require insurance, some people still drive without it, or an insufficient amount of it. Optional provisions like uninsured/underinsured motorists can protect you if you’re in a situation with either type of driver.
- Deductible: Larger deductibles will lower your rate, but don’t choose a deductible unless you’re sure you can pay it upfront for a claim.
- Discounts: Most insurers offer discounts, find out from each company about any and all that apply to you.
- Shop around: Get quotes from several companies to compare coverage and premium.
State Farm Home Insurance
State Farm ranks Number 1 in homeowner’s insurance. Although the company has fewer discounts than other home insurers, they still offer the same types of coverages.
- Availability: all 50 states
Basic Home Insurance Coverage
State Farm home insurance policies provide the following basic homeowner coverage types:
- Dwelling: Covers damage to your home as well as loss of your home in the event of an incident.
- Personal possessions: Protects against damage, theft, and destruction of your personal items.
- Loss of use: Provides coverage for living expenses, like lodging, if you’re unable to stay in your home.
- Medical Payments: Covers medical bills for someone injured on your property.
- Liability: Much like auto insurance, this provision offers protection for bodily injury and property damage against someone that you’re at-fault for.
Home Insurance Discounts
State Farm’s home insurance discounts are similar to those available for car insurance, and include:
- Bundle home and auto
- Sprinkler system discount
- Security device discount
- Damage resistant roofing material discount
State Farm Home Insurance Ratings & Average Premium
You can save up to 25% when bundling Home and Auto Insurance.
Make sure that both investments are protected at all times while you save money. Click below to get a free quote.
How to Sign Up with State Farm Home Insurance
Much like a State Farm car insurance quote, you’ll complete the application process for home insurance online. If you prefer, you can call a toll-free number or go to a local office.
Other Services Offered by State Farm
Listed below are the other products and services that State Farm provides.
- Pet insurance (through Trupanion)
- Disability (long and short term)
- Life insurance (term, whole, universal, change policy and beneficiary)
- Small business insurance (owner, commercial, contractors, workers comp., liability umbrella, bonds)
- Liability (business, professional, personal)
- Health insurance (individual, supplemental, Medicare)
If any of the above situations apply to you, you may want to discuss it with a State Farm representative when adding it to your auto insurance policy, or if you already have a policy with them.
The Bottom Line
State Farm covers more than 16% of all drivers in the country, as well as being number one in life insurance and homeowner’s insurance. With such high ratings in customer satisfaction and customer service, it’s hard not to give them a chance. When searching for any kind of insurance, State Farm should be among the companies you look to for a quote.
State Farm FAQs
Is State Farm good car insurance?
State Farm is the biggest auto insurer in the country. Customers are typically drawn to a company by a combination of quality and affordability, so this speaks volumes about State Farm. They offer a wide range of insurance policies, including life, health and business insurance, which makes it easier for consumers to keep all their insurance coverage with the same company.
Is State Farm the cheapest insurance?
State Farm is not always the cheapest, though they are the lowest in some states. But car insurance should never be purchased based on premium alone. You need to evaluate the cost of a policy against the quality of coverage being provided. State Farm comes up strong in those comparisons.
Is State Farm good at paying claims?
State Farm ranks sixth in the nation on customer claims satisfaction, according to the J.D. Power 2020 US Auto Claims Satisfaction Study cited earlier. That’s no small advantage, given the large number of auto insurance companies in the country. You can generally expect a good claims experience with State Farm.
About the Author
Kevin Mercadante is a professional personal finance writer. He has extensive backgrounds in both accounting and the mortgage industry. In addition to writing for Good Financial Cents, Kevin’s work can be seen on Dough Roller, Money Under 30, Investor Junkie and Wallet Hacks. He also blogs at his site, OutOfYourRut.com. Kevin and his wife live in New Hampshire.
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