State Farm Auto Insurance Review
Pros Explained
- Rideshare insurance available: Existing policyholders may be able to add rideshare coverage if they drive for Uber or Lyft.
- Large network of agents: The company claims it has a network of more than 19,000 agents nationwide, so you can find an agent to get the coverage you need.
- Multiple policy discounts available: State Farm offers many discounts which may lower your insurance premiums. Discounts include safe vehicles, teen drivers, safe drivers, and multi-policy discounts.
Cons Explained
- Must buy through agent if you have more than four vehicles: Would-be policyholders who have more than four vehicles or drivers may not like the fact they’ll need to work with an agent to purchase a policy.
- Reports of higher premiums: Premiums for State Farm auto insurance policies are reportedly higher compared to its competitors, even with discounts.
Introduction
As one of the oldest insurers in the country, State Farm offers auto insurance with many discount options available. Parents of teen drivers may be especially ecstatic that safe driver programs and discounts are available for this demography.
Even with the variety of discounts available, State Farm may offer higher premiums than other car insurance companies. Still, it may be worth taking a look, especially if you have an existing policy elsewhere within State Farm.
Company Overview
G.J. Mecherle founded State Farm in 1922 and first sold auto insurance policies. Headquartered in Bloomington, Ill., the company focuses on basic policies, as well as ones for rideshare drivers and owners of luxury vehicles. State Farm is available in all 50 states, and Washington, D.C.
Types of Coverage
State Farm offers the following coverage options:
Collision
State Farm collision insurance coverage is limited to the actual cash value of your car and requires a deductible before policyholders receive benefits. You’ll only be covered if your vehicle was hit (including single-car accidents), but not when it involves falling or flying objects.
Liability
Most states will require you to carry this type of coverage, which helps pay for the costs of another driver’s medical injuries or property if you’re found at fault or legally responsible for an accident. You’ll need to get the minimum amount required by your state.
Comprehensive
Comprehensive coverage protects your vehicles from losses such as your vehicle being hit by an animal, car theft, fires, explosions, and extreme weather conditions—but not by other vehicles. Some auto loan lenders require this type of coverage.
Car Rental and Travel Expenses
With this coverage, State Farm will pay for or reimburse you for rental car expenses after a qualifying accident. The company may also pay for travel expenses like meals and lodging if you can’t drive your vehicle due to damage. To qualify, you’ll need to have existing comprehensive or collision insurance.
Uninsured and Uninsured Motor Vehicle
If an uninsured or underinsured driver hits your vehicle (and you’re not deemed at fault), State Farm will pay for things such as your medical expenses, car damage (in some states), and even lost wages.
Medical Payments
Sometimes referred to as Med Pay, a covered person—either you, passengers in your car at the time of the accident, or your immediate family members—are covered for medical and funeral expenses if they’re hurt in an auto accident. You can add this coverage only if it’s available in your state.
Rideshare Driver
Policyholders who use their car to drive for rideshare companies can purchase additional insurance to cover themselves in case of an auto accident or a passenger files a claim against you due to an injury. According to State Farm, coverage usually costs an additional 15% to 20% on top of your auto insurance premium.
If you’re unsure of the types of coverage best suited for your vehicle, speaking to a State Farm agent may be able to help you with picking the right policy.
Discounts
State Farm offers many discounts to help you lower your premiums, including the following:
Bundle Discounts
- Multiple line discount: Policyholders can save if they bundle their auto insurance with other State Farm insurance products such as homeowners, condo, renters, or life insurance.
- Multiple car discount: Buy ensuring more than one car with State Farm, policyholders can save up to 20%.
Driving Habits and History
- Good driver discount: If you go three years or more without an accident, State Farm will offer you savings on your premium.
- Drive Safe & Save discount: Drivers who enroll in the program and record trips on the Drive Safe & Save app may earn a discount.
- Steer Clear program: People under 25 years old who successfully watch videos, complete quizzes, and record driving trips within six months on the Steer Clear app may qualify for a discount.
- Defensive driving course discount: Drivers who successfully take a driver safety course can save on their policy.
- Good student discount: Teens can save up to 25% for getting good grades.
- Student away at school discount: If a student under 25 only uses the car during holidays and vacations when they move away for school, a discount may apply.
Vehicle Equipment
- Anti-theft discount: You could save money if your vehicle has an approved anti-theft device or car alarm.
- Passive restraint discount: Vehicles 1993 or older with a factory-installed airbag or other approved passive restraint system can receive a discount on medical-related coverage.
Payment Options
State Farm allows policyholders to pay for their premiums via credit or debit card, money order, or check. Customers can also set up automatic payments using their bank account, credit, or debit card.
Discounts are a great way to save as much money as possible on insurance premiums. Make sure you contact State Farm to ensure you receive all the discounts you can qualify for.
Loss Ratio
State Farm has a loss ratio of 70.72%, slightly higher than average compared to its competitors. Based on this loss ratio, the company’s slightly higher-than-average premiums reports are being measured fairly.
Other Features
State Farm also offers emergency roadside assistance coverage. With this coverage, State Farm will pay for services such as mechanical labor at the site of the breakdown, towing to the nearest repair location, and delivery of gas or batteries.
Customer Service
State Farm customers can contact the company by calling 1-800-782-8332, secure messaging online or via State Farm’s app, or by speaking with their local State Farm agent.
Customer Satisfaction
Satisfaction Ratings
State Farm offers different ways to purchase insurance policies and make claims and customers seem satisfied with their processes. The company ranked second out of eight insurers in the J.D. Power 2021 U.S. Insurance Shopping Study and it scored 872—one point above the average of 871. The insurer also ranked sixth out of 18 insurers and scored 892 out of 1,000, twelve points above the industry average of 880 in the J.D. Power 2021 U.S. Auto Claims Satisfaction Study.
State Farm’s financial stability will help you feel confident that the company will have available funds when you file a claim. AM Best—an organization that rates insurers on their financial strength—rated them an “A++” (Superior), the highest rating available.
Complaint Index
Understanding how many complaints are filed against an insurer can be helpful to get a sense of what an insurance company is like. The National Association of Insurance Commissioners (NAIC) is an organization that collects consumer complaints about insurers to compare against the industry average. State Farm has a complaint index of 1.18, higher than the industry average of 1.0.
Account Management
State Farm customers can manage their account by logging into their account online, through the State Farm, or speaking with their local agent. Customers can also use the app to review benefits and pay their premiums.
How State Farm Compares to Other Auto Insurance Companies
State Farms average premiums are slightly higher than companies operating in the same states. However, depending on where you live, premiums may be lower than other insurers. It’s a good idea to shop around for the best rates and terms.
Final Verdict
As one of the oldest and largest auto insurance companies in the U.S., State Farm offers a myriad of discounts, including ones for teens, rare in the insurance industry. Coverage is also widely available and offers personalized service with a network of more than 19,000 agents.
However, State Farm doesn’t necessarily offer the best prices compared with its competitors, and their NAIC complaint index is worse than average. Still, State Farm is a good option for those who want to insure their teen drivers, attempt to get a lower premium through multiple discount options, and have easy access to online tools.
How We Review Auto Incurance Companies
Investopedia is committed to providing readers with unbiased, comprehensive reviews of auto insurance companies. All of our reviews are based on extensive research and analysis of each company’s coverage, customer service, pricing, years in business, accreditation, and more. To rate providers, we developed an auto insurance review methodology that compares the auto insurance coverage types, additional features, discounts, account management, and other features.