State Farm Review
Our State Farm Review
State Farm is backed by strong financial ratings and high claims satisfaction that emphasize the insurer’s dedication to its customers. But State Farm isn’t perfect. It’s lacking in supplemental coverage options that would otherwise separate it from the pack, and its comparatively short list of discounts limits the company's ability to offer you the lowest possible rate.
State Farm does a good job with the policies it offers, combined with service availability that won’t leave you in the dark. We’re confident it will be able to satisfy your insurance needs whether you’re a first time car owner or just looking for choices beyond your current provider. But the coverage and discounts it doesn’t offer hinder our overall assessment. Our biggest complaint? There’s just not enough to make us choose State Farm over other insurers.
State Farm claims that it can provide extensive coverage with personalized service unrivaled by other insurers. That means around-the-clock support and policies that will protect you and your assets in the event of an accident.
Is it True?
State Farm is the largest auto insurer in the country, with nearly 18,000 agents located in all 50 states (plus Washington, D.C. and three provinces in Canada). Thanks to 24/7 support and the ability to file claims online or through State Farm’s mobile app, the “good neighbor” insurer will be available when and where you need it. But that doesn’t necessarily mean you should choose it as your provider.
Make no mistake: State Farm is a strong insurer, with high financial solvency ratings from three different credit agencies and the second-highest claims satisfaction score of our contenders. But when it comes to actual coverage, State Farm does little to distinguish itself. It performs well on standard protections — but so does just about everyone else. We did like rideshare coverage that’s available in 37 states and Washington, D.C.; by comparison, Travelers’ rideshare option is only available in Colorado and Illinois. But without any other exceptional choices, State Farm has fewer total coverage options than our other top picks and lands squarely in the middle of the competition.
State Farm’s scores in claims satisfaction shouldn’t be overlooked: The J.D. Power evaluation is a good representation of customer service, and State Farm performs very well. When you’re dealing with the aftermath of an auto accident, this can make a big difference. But other areas of State Farm’s general service are flawed. Its mobile app has faced some persistent challenges, including issues with connectivity, that could make a bad situation worse when you’re stranded on the side of the road. We don’t think this is sufficient reason to rule State Farm out, but it’s important to consider what your needs will be at the time of an accident.
For many auto insurance customers, discounts can make the difference between a great provider and a good one. Unfortunately, State Farm’s discounts were largely the same story as its coverage. Multi-policy and multi-car discounts reward loyal customers, and deductions for anti-lock brakes, airbags, and daytime lights mean owners of newer cars may be able to find lower premiums from State Farm than those driving older vehicles. But all of these deductions are fairly common among our top contenders. As with supplemental coverage, State Farm ended up with fewer deductions than many of our other contenders.
Ultimately, the number of total discounts may not matter as much as the number for which you qualify. And given its strong performance in areas like claims satisfaction, you should absolutely get a quote from State Farm when you’re shopping for auto insurance. If you’re eligible for the discounts it does offer, you may be able to find a rate that’s competitive with even the most discount-heavy of insurers.
A Closer Look at Features
|Price||Quotes will differ from person to person|
|In Business Since||1922|
|Best For||Drivers of newer vehicles or rideshare employees|
|Not For||Shoppers looking for budget auto insurance|
|JD Power Insurance Shopping Rating||846 out of 1000 (Above industry average)|
|JD Power Auto Claims Satisfaction Rating||865 out of 1000 (Above Industry Average)|
|A.M. Best Financial Strength Rating||A++ (Superior)|
|Moody’s Rating||Aa1 (Excellent)|
|Standard and Poor’s Rating||AA (Very Strong)|
Our Deep Dive
- Rideshare coverage: As more and more people begin to work for services like Lyft or Uber, insurance companies will likely begin offering more policies catered to the needs of these drivers. But for now, State Farm is one of only a few insurers to provide coverage specifically for these employees (though this option is currently only available in 37 states and Washington, D.C.). Still, compared to the cost of commercial auto insurance, which is generally more expensive than personal coverage, State Farm’s rideshare option offers necessary protection for a group of drivers that will only continue to grow.
- Student discounts: State Farm offers a range of discounts to help keep premium prices down for students in school. This includes a good student discount that can save policyholders up to 25% for maintaining a B average or higher, as well as a deduction for students away at school who will only be driving when home on breaks or holidays. Plus, any drivers under 25 without at-fault accidents or violations in the past three years can save up to 15% for completing State Farm’s Steer Clear program.
- Safety discounts: State Farm places a high premium on driver safety, with multiple deductions for vehicles that come equipped with safety features. If your vehicle was produced in 1994 or later, you can earn up to 40% savings on medical-related coverage; if it was made prior to 1994, you can still see the same savings if your car comes equipped with factory-installed airbags or other passive restraint systems. And vehicles that include alarm systems will benefit even further from a discount for anti-theft devices. Many of these features come standard in newer models, which means if you recently purchased your vehicle, you’re likely to see significant savings on your annual insurance costs.
- Perks for loyal customers: Policyholders who use State Farm to insure more than a single vehicle can see significant savings thanks to deductions that reward commitment to the company. If you or a related individual in your household own multiple vehicles, for example, you can save up to 20% on your policy; if you use State Farm for other forms of insurance in addition to your vehicle coverage — like homeowners, renters, or life insurance — you’ll save up to 17%.
- Accessible agents: State Farm has more than 18,000 agents available in all 50 states, plus a 24/7 support line for filing and managing claims (or to just learn more about policies). And with a claims satisfaction rating above the industry average, you can feel confident knowing that a helpful representative will be available and ready to guide you through every stage of the insurance process.
- Extensive resources: State Farm’s online resources provide comprehensive information on everything auto-related, not just insurance. This includes articles on topics ranging from responsible financial planning to what you should do in the event that your car is totaled, as well as practical tips for the day-to-day responsibilities of owning a vehicle like how to jump-start a car, how to properly use driver-assist safety features, and how to protect your vehicle from sun damage.
State Farm vs. The Competition
State Farm vs. GEICO
There’s no reason to dance around it: GEICO is our favorite overall auto insurer. It offers an impressive range of discounts and supplemental coverage choices, and strong financial solvency guarantees the company’s ability to pay out your claim. Plus, it had the highest claims satisfaction of any of our top competitors, as well as a highly rated mobile app. GEICO doesn’t have everything we’d like to see from such a prominent insurer: It’s missing GAP coverage to pay the difference between your wrecked vehicle’s value and the amount owed on its loan, as well as new car replacement, but so is State Farm. And the supplemental coverage options GEICO does offer are solid. Add to that the second most discounts of our top picks and GEICO will be able to provide coverage at rates that will fit most car owner’s needs.
What Others Are Saying
The New York Times suggests State Farm’s rates — and insurance prices as a whole — may rise in storm-affected states like Texas.
Following the devastation from hurricanes in 2017, insurance companies recorded large underwriting losses paying out claims in affected states, including nearly $5 billion in insured losses on personal and commercial vehicles from Hurricane Harvey alone. State Farm took the biggest hit of all major insurers, with an operating loss of $1.7 billion. State Farm’s other operations, including homeowners and life insurance, help offset these losses, but according to a Fitch Ratings analyst quoted in The New York Times, “losses in Texas could drive up rates in the state” in an attempt to account for the unexpectedly high amounts paid out in claims. This won’t affect national premiums (“rate-setting is handled state by state”) but customers in states like Texas will likely face higher rates in the future, particularly if the policy is held with State Farm.
The Bottom Line
State Farm will likely have a policy that fits your needs and it’s wholly worth getting a quote to see how your premium stacks up against its competitors. If you opt for coverage, you can breathe easy knowing you’re backed by strong financial solvency and claims satisfaction that will help you handle the stresses of an accident no matter when life strikes. But if you’re looking for outstanding coverage options and exceptional discounts, you’re probably better off looking elsewhere.