State Farm Insurance Review 2021: Popular With High Customer Ratings, But Lacks Competitive Discounts

A photo to accompany a review of State Farm insurance Illustration/NextAdvisor
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State Farm is a household name in the insurance industry, insuring more cars and homes than any other insurer in the U.S. Founded in 1922, State Farm is the second most popular insurance provider in the United States; nearly 60% of Americans have a positive opinion of the company, according to a YouGov survey. 

Originally a single-line auto insurance company, State Farm now offers about 100 products and services in five different lines of business,  including home, life, and health insurance. On top of that, the Illinois-based insurance company provides other financial products, such as loans, estate planning, and investment accounts.

NextAdvisor named it one of the best car insurance companies because of its affordable pricing and customer satisfaction ratings. Here’s what else you need to know about State Farm insurance. 

State Farm Auto Insurance

State Farm is a giant in the auto insurance industry. As of 2019, it has 44 million active auto policies in the U.S and over 19,000 agents who can assist you during the process of buying auto insurance.

Types of Coverage

State Farm offers all the standard car insurance coverages and then some, including rideshare insurance, car rental, and travel expenses coverage. The company doesn’t offer gap insurance but has a similar feature called Payoff Protector for anyone who gets a car loan from a State Farm bank (in alliance with U.S. Bank). 

  • Liability coverage (bodily injury and property damage)
  • Comprehensive and collision coverage
  • Personal injury protection and medical payments
  • Uninsured/underinsured motorist coverage
  • Car rental and travel expenses coverage
  • Emergency road service coverage
  • Rideshare insurance

Cost of State Farm Auto Insurance

State Farm doesn’t have the lowest rates, but they do fall below national averages. According to the latest Bankrate data, the national average full coverage policy costs $1,674 per year. The national average minimum coverage policy costs $565 per year. Compare those figures to the cost of State Farm’s average full coverage policy and minimum coverage policy, which are $1,457 per year and $539 per year. That means the average American could save more than $200 per year by insuring their vehicle(s) with State Farm. 

State Farm Auto Insurance Discounts 

With State Farm, you may be eligible for one or more of the 11 auto insurance discounts it offers. You could get discounts for being a safe driver, student, or insuring multiple cars. State Farm auto insurance discounts vary by state—here’s a list of them:

  • Accident-free discount
  • Defensive driving course discount
  • Good student discount
  • Good driving discount
  • Driver training discount
  • Student away at school discount
  • Vehicle safety discount 
  • Passive restraint discount
  • Anti-theft discount
  • Multi-vehicle discount
  • Multi-policy discount

State Farm Home Insurance

You likely know State Farm because of its auto insurance, but it’s also one of the largest homeowner insurance companies in the U.S. It sells homeowners insurance in all 50 states and Washington, D.C.

Types of Coverage

State Farm offers standard coverage that’s part of most homeowners policies, such as liability for weather-related damage in the home and coverage for personal belongings. 

  • Weather damage including storms, wind, hail, lightning, freezing, ice, snow, or sleet
  • Damages resulting from fire, theft, or vandalism
  • Accidents caused by water from plumbing or artificially generated electrical current
  • Covers certain types of items such as jewelry, collectibles, pictures, cameras, musical instruments, sports equipment, appliances, furniture, clothing, electronics, lawn decorations, swing sets, and tools

Cost of State Farm Home Insurance 

According to the latest data from Bankrate, State Farm has the priciest homeowners insurance rate for a $250,000 dwelling compared to its competitors. The average home insurance policy with State Farm costs $1,503 per year — $191 more than the national average of $1,312 per year. 

State Farm Home Insurance Discounts

When it comes to homeowners insurance discounts, State Farm offers fewer compared to its competitors. These are some of the home insurance discounts it offers:

  • Multi-policy discount
  • Home alert protection discount
  • Roofing discounts

State Farm Life Insurance

In addition to auto and homeowners insurance, State Farm offers three types of life insurance coverages to people of all ages. Within those three buckets, you customize your policy to fit your needs. For example, you can get term life policies with an online application and instant response, term life policies that return your premium if you outlive the term, final expense insurance, and options for joint and survivorship life insurance. The company offers life insurance in all states except Massachusetts, Wisconsin, and New York.

Types of Coverage 

The life insurance policies available with State Farm are:

  • Term life insurance
  • Whole life insurance
  • Universal life insurance

State Farm Life Insurance Cost

The average cost of life insurance is nearly $23 per month for a 35-year-old woman looking for a 30-year term policy with a death benefit of $250,000, according to the latest Bankrate data. NextAdvisor tried to pull a State Farm quote for life insurance coverage starting at $250,000 for a 35-year-old woman who’s healthy, living In California, and looking for term life insurance, but wasn’t able to get a quote online and was asked to speak to an agent.

State Farm Life Insurance Discounts

There aren’t any discounts available for life insurance with State Farm. But, you could see savings if you bundle life insurance with another policy like home or auto.  

State Farm Ratings, Customer Satisfaction, and Complaints

State Farm’s ratings, financial standing, and customer satisfaction are relatively positive across the board. State Farm also holds an A++ from AM Best, the strongest financial rating a company can have. That rating expresses an insurer’s financial stability, which influences its ability to pay out claims.

The National Association of Insurance Commissioners (NAIC) reports above-average customer complaints. Still, over 1,000 reviews from Consumer Affairs show that many people like how easy it is to file a claim online or through the mobile app. Others like that there’s the option to speak to a local agent. Many also talk highly of State Farm’s discounts for safe drivers, including teen drivers. 

State Farm offers a lot more peace of mind for families than many insurance providers, says Jake Hill, the founder of DebtHammer, a debt relief company.  His company worked with a family whose 17-year-old daughter wrapped a car around a utility pole. State Farm did an excellent job handling the situation, says Hill. Their claims were covered and met without hassle. 

Below are ratings from leading market researcher J.D. Power. State Farm earned some of the most significant gains in customer satisfaction ratings for auto insurance in 2020. It’s ranked the highest auto insurance brand in the Mid-Atlantic and New York regions and scored high for customer satisfaction in several other parts of the country. According to the latest data from J.D. Power, State Farm is ranked in the top 10 for auto insurance claims satisfaction. As for homeowners and life insurance, State Farm ranks high. State Farm ranked sixth for customer satisfaction in the homeowners insurance segment and took the top spot for individual life insurance in J.D. Power’s 2020 life insurance study.

2020 J.D. Power Study Rating
State Farm Auto Insurance837/1000
State Farm Home Insurance829/1000
State Farm Life Insurance838/1000

State Farm Pros and Cons 

Pros

  • Fair rates

  • High customer satisfaction ratings

  • Strong financial and industry standing

  • Wide selection of customizable insurance coverage options (auto, home, life, and more)

  • Usage-based discount program available: Drive Safe & Save. It has one of the highest discounts available: up to 30% for the safest drivers

  • A mobile app and a user-friendly website for quotes, paying bills, and filing claims

  • Easy access to agents nationwide

Cons

  • Lack of discounts for long-term customers

  • Average repair service: Car claim repairs can be done using non-original parts

  • No gap insurance coverage

  • Biased expertise: You can only buy insurance from the company directly or through its captive agents trying to sell their products

  • Online life insurance quote process can require you to speak to an agent to get a price

Other Policies Offered by State Farm

State Farm stands out because it offers a wide range of property insurance policies that many other carriers decline to write, such as those for manufactured homes, small businesses, farms, and ranches. These are other insurance policies offered by State Farm:

  • Condo
  • Farm and ranch
  • Manufactured home
  • Boats, motorcycles, and RVs
  • Umbrella
  • Identity theft
  • Business
  • Commercial auto

Bottom Line 

State Farm is a reliable and easily accessible insurance company with fair auto and life rates. State Farm’s average annual rate for homeowners insurance is higher than other insurance companies, but its auto rates are relatively low compared to the rest of the industry. It’s a trustworthy provider with high customer satisfaction and many programs and offerings to choose from, but it doesn’t offer many competitive discounts or gap insurance coverage.

About 60% of State Farm households have more than one product, according to its website.  If you’re simply going for auto insurance, you’ll not find the most competitive rates on the market, but combining your insurances with State Farms means you see a lot more savings. The company’s easy-to-navigate website and app make managing your insurance policies painless. 

Its massive network of agents also makes it easy to find an agent near you in person or over the phone. Though, individual experience with State Farm can vary wildly depending on your local insurance office. While the company itself has good service, it’s possible you’ll get stuck with local agents who are less experienced or not as good of a fit for your insurance needs.

Frequently Asked Questions 

Where is State Farm available?

The majority of State Farm’s insurance products are available in all 50 states and Washington, D.C. It doesn’t offer life insurance in Massachusetts, Wisconsin, and New York.

Who is the largest insurance company in the U.S.?

The largest auto insurance company in the country in terms of market share and premiums written is State Farm, followed by Geico, Progressive, and Allstate.