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UPDATED: Apr 8, 2020
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When shopping for car insurance, it can be hard to decide which companies are better. Auto insurance is a highly competitive industry, and a small number of companies hold the majority of the market share. Bigger doesn’t always mean better in the insurance world, but large companies are often more financially secure and have high rates of customer satisfaction.
How Big is State Farm?
State Farm is the largest insurance company in the country, and the largest property and casualty insurer in the world. It ranks in the top 50 Fortune 500 companies in the world and employs over 67,000 staff members plus 17,000 agents. The company currently maintains 18% of the overall market share for auto insurance.
Of its 77 million policies, around half are for auto insurance. Other types of policy include homeowner’s insurance and life insurance. Although it does not always offer the best prices, it is very competitive in the market and many people get the best quotes from State Farm. As a massive company, it can afford to offer discount premiums to individuals within its preferred demographics.
How much does State Farm Insurance cost?
Auto insurance rates vary from one state to the next, and different individuals will pay different rates. The average cost of State Farm coverage in California is around $1,600, while coverage in Texas costs an average of just $681. Some insurance companies may offer lower rates in various states than others, so you may save money by switching insurance companies when you move.
The ideal State Farm driver is at least 21 years old with three years of accident-free driving history and three or fewer points against their license. People who fall outside of these parameters may have substantially higher rates or might not qualify for coverage at all through the standard-risk policies offered by the company.
What Makes State Farm Unique?
There are several features that State Farm offers that other insurance companies do not. Depending on your needs, these additional features may be worth more to you than low premiums. The cheapest insurance policy is not always the one that provides the best coverage.
One of the key factors that makes State Farm stand out among its competitors is a heavy reliance on agents. As evidenced by its sales model and even its advertising strategy, State Farm fosters close business relationships between customers and agents. Policies are purchased through agencies, and all claims are filed through agents. This differs from other insurance companies, which utilize a central toll-free support line to field insurance questions or handle claims.
The reliance on agencies is both a positive and negative trait for State Farm. On one hand, it allows customers to feel that they are getting exemplary personalized service. State Farm consistently ranks highly for customer service, and this may be due in part to the quality of the agency staff.
On the other hand, it requires the company to maintain massive amounts of staff, which can be expensive. It also becomes inconvenient to file claims during nights or weekends when agents are unavailable due to the lack of a single central phone number for the claims department.
State Farm is working to rectify that situation by utilizing smart phone apps and other technologies to report claims. Compared to other insurance companies, however, State Farm appears fairly reluctant to embrace technological advances; the company as a whole seems to favor an interpersonal touch that attracts older customers.
How can I save money with State Farm?
In addition to very competitive pricing and exceptional customer service State Farm also offers several discount programs which many smaller providers do not such as:
— Good student discounts of up to 25%
— Multi-car discount of up to 20%
— Multi-policy discount of up to 17%
— Safe driving discount of up to 10% for three years of accident-free driving
— Defensive driving course completion discount of 5%
There are also two programs that insureds can enroll in that will reduce the cost of insurance. The first is aimed at young drivers. It’s called “Steer Clear” and it helps drivers under 25 learn and implement safe driving skills. After completing the course and maintaining three years of safe driving, insureds will save around 15% on insurance.
The other program is State Farm’s solution to pay-as-you-go auto insurance. It’s called “Drive Safe & Save” and it monitors a driver’s habits by installing a device in the vehicle. People who drive low annual mileage or engage in various safe driving practices will save 5% on insurance.
Depending on your situation, you may qualify for additional discounts. For example, you might save money on insurance if you install an anti-theft device on your vehicle or keep the car parked in a garage at night. Always be sure to ask your agent if there are any additional discounts you may qualify for.
Ultimately, the question of whether State Farm is the best insurance company for you will depend on how you feel about its customer service, whether you can get the best rates and if there are any companies that offer better features. The only way to know for sure whether a certain company is ideal is to comparison shop between multiple insurers. Only by obtaining numerous quotes and speaking with a variety of representatives can you make an informed decision about your insurance needs.