Sure, we all know Jake from State Farm, not to mention what he’s always wearing. But how do we really know if State Farm is the best auto insurance for us, especially when there are so many other auto insurance options available?
State Farm is a well-known insurance company, but having a big name in the insurance industry may or may not mean it’s the right choice for what your auto coverage needs. Today I’m looking at the pros and cons of choosing State Farm auto insurance, so you can decide if it’s best for you.
Founded in Bloomington, Illinois, in 1922, State Farm has since grown to become a giant among insurance companies. They offer a wide range of insurance products, ranging from auto to home, to life and disability.
Fast forward almost 100 years later and State Farm is now the largest insurance company in the United States. Currently, State Farm holds about 16% of the auto insurance market share, easily making it the biggest auto insurer.
But State Farm doesn’t stop at massive amounts of market share. The company has impressive financial ratings to back up their own claims of stability and strength. They have an A++ rating from AM Best, which is the highest rating possible. This rating is based on financial strength and sound operational performance — which is exactly what you need with a car insurance company.
Another rating State Farm excels in is with the S&P Global Ratings. State Farm has an impressive AA rating, which shows strong creditworthiness.
So what exactly do all these big-name ratings and fancy accolades mean for us? Turns out, it could mean quite a bit.
How does State Farm auto insurance work?
State Farm operates with a network of over 19,000 insurance agents, which means you’re likely to find an agent within your neighborhood. Each agent is an independent contractor, some will have additional employees too.
You’ll work with your State Farm agent for everything from getting quotes to reviewing the application process. Your agent can work with you to determine the best coverage for your policy.
The cost of your policy is referred to as a premium. You can set this payment up to occur monthly, quarterly, or annually (don’t forget to ask if there’s a discount for paying your premium in an annual lump sum!).
State Farm auto insurance offers an extensive list of coverage options for you and your vehicle. Most of these are found with other insurance companies, such as:
Uninsured motor vehicle
Underinsured motor vehicle
In addition to these, policyholders can find coverage options not always available with the other companies, such as:
Emergency roadside assistance
Expansive car rental and travel coverage
Rideshare driver (Uber, Lyft, etc.)
Antique and classic car
Not only must you choose what coverage you need for your vehicle, but you have to determine the deductible you’re willing to pay.
A deductible is simply the amount of money you will pay before your insurance kicks in if you have a claim. You can choose a policy with a no or low-deductible, such as $250, but your premium will be higher. If you choose to carry a higher deductible, in the $1,000 range for instance, then you can expect your policy to cost less.
To start the insurance quote process, you can complete everything online or call a local agent for the details. You’ll have to enter your basic information, as well as specific vehicle information. You should also know your credit and prior insurance information will be obtained from third-party sources.
How much does State Farm auto insurance cost?
The best way to determine the cost of a State Farm auto insurance policy is to enter your exact information for a quote. You aren’t obligated to purchase, so getting the exact numbers you’re potentially facing is best.
When it comes to auto insurance, there are multiple factors that affect your premium. Factors such as age, vehicle, driving record, location, the amount of your deductible, and even your credit score. Some of these factors you have control over, like a safe driving record, others not so much.
One aspect you do have control over is the ability to inquire about eligible auto discounts.
In order to reduce the cost of your premiums, while still maintaining adequate coverage, is to look for discounts offered by the insurance company. This is an important topic of conversation for you and your agent.
What sets State Farm apart from other auto insurance providers is the number of discounts available to regular people, like you and me. There are several discounts on premiums I found to help lower the overall cost. Discounts such as:
Drive Safe and Save™ discount
This discount rewards you for downloading the Drive Safe and Save™ app on your mobile. You’ll receive a discount automatically once you sign up. To take your discount to the next level, you need to connect your phone to Bluetooth so the app can provide feedback while you’re driving.
If you accelerate too fast, or brake too quickly, don’t worry, the app will let you know. If you can take your feedback and improve your driving skills, you’ll be rewarded with a deeper discount.
This is a similar program to other safe driver options with other insurance companies, but at least it’s more convenient with the State Farm car insurance app and not something you physically attach to your dashboard.
If you’re a little hesitant about having an app look over your shoulder every time you drive, you might be persuaded when you save up to 30% on your premium.
Steer Clear® discount
State Farm offers a discount for the younger drivers out there. If you’re under 25 and have remained no-fault, accident-free and without moving violations, then you’re likely eligible for the Steer Clear® discount.
First, you download the app to begin the eligibility process. Once downloaded, you’re required to complete five training modules and several hours of “practice driving.” Once you meet the requirements, you receive a certificate. Don’t shove the certificate in your drawer though! You must send it to your State Farm agent to receive your Steer Clear® discount.
If you already have a State Farm policy, bundling your insurance with renters insurance, homeowners insurance, life insurance, or other types of insurance can lower your insurance rates with a multiple policy discount.
This discount can save as much as 17% on your policy, so it’s definitely worth talking to your agent if you have (or will have) other insurance products.
Overall, the amount of discounts offered makes State Farm a strong contender. Why not get rewarded for actions you’re already taking?
Examples of premium costs
With all of those factors, here are examples of average rates with State Farm for a single, college-educated male renting a home in Chicago driving an average of 11,000 to 13,000 miles a year in a 2018 Toyota Camry as of March 28, 2021.
Minimum coverage includes:
Bodily Injury: $25k/$50k
Property Damage: $20k
Uninsured Motorist Bodily Injury: $25k/$50k
Full coverage includes:
Bodily Injury: $100k/$300k
Property Damage: $50k
Uninsured Motorist Bodily Injury: $100k/$300k
Collision Deductible: $1k
Comprehensive Deductible: $1k
State Farm auto insurance features
What other bells and whistles does State Farm offer? After all, there are (what seems like) hundreds of choices when it involves auto insurance. But I want to know what’s in it for me?
One unique feature through State Farm auto insurance is the Rideshare coverage. Not every auto insurance company has this option, so if you have a side gig driving for others, then definitely take note.
If you use your vehicle for a rideshare company, such as Uber or Lyft, State Farm covers your liability if you have damage to your own car, or someone else's, while you are on duty. Plus the Emergency Roadside Assistance is available in case you need it.
Car rental coverage
Another helpful feature offered is the car rental coverage. This is an optional service, but could prove to be worth it if you depend heavily on your vehicle for transportation. You’ll have access to features such as:
If you have to rent a car while your car is inoperable, then you can get reimbursed up to $400 per occurrence. The best part? Both you or anyone who lives in your house are eligible to receive this coverage, if you’ve selected it on your policy.
If you are in a rental car and you’re involved in an accident, you’ll receive up to $500 towards your deductible.
If you find yourself in a “qualifying event,” State Farm will make all the arrangements necessary for you to obtain a rental car.
Overall, these could make a stressful situation a tad bit easier if you find your car out of commission.
In addition to the 19,000 State Farm agents, you have access to multiple points of communication. If you have questions about your policy or claims, you can always reach out to the customer service that operates 24/7.
If you don’t like phone calls, don’t worry. If you need to file a claim, you can start the claims process digitally, by either entering the information into your app or going online.
Lots of discounts
As mentioned previously, you have access to several discounts — not just one or two. This can make a big difference in your quote, as well as the extent of coverage you receive.
Don’t be afraid to make your agent go over every discount available! You work hard for your money, and it never hurts to ask how you can get the most out of your policy without overpaying.
Who is State Farm auto insurance best for?
State Farm is a fantastic option for those who are looking for discounts. At the risk of sounding like a broken record, there are a massive number of discounts available.
Those who like discounts
If you’re willing to do the homework — and in some cases, a little extra work — then you can be rewarded for your efforts. A great example is the Drive Safe & Save™ program mentioned previously. It takes intentional effort to receive the certification, but once you do, you’re on your way to substantial savings.
Those who need a variety of coverage options
State Farm is good for those who really need an all-inclusive policy, or have specific coverage needs (like if you own a classic car). Whether you need to add coverage if you’re a rideshare driver, car rentals, uninsured motorists, or all of the above, State Farm likely has the coverage you’re after.
Who shouldn’t use State Farm auto insurance?
Those who like strong customer service
While accessibility to customer service is one of the best features for State Farm, it doesn’t necessarily mean you’ll always receive the best experience.
Sometimes it’s simply a matter of who you get on the phone, but overall, State Farm doesn’t have the highest customer satisfaction rating, compared to other big auto insurance companies.
So if you place a high value on your interactions with agents on the phone, then State Farm may not be the best choice.
Those who need the cheapest premiums possible
State Farm auto insurance doesn’t claim to be the least expensive option for auto insurance. Instead of focusing on the least expensive rates, you’ll notice the emphasis on the number of discounts and a wide variety of coverage options available to you.
State Farm has quite a bit to offer when it comes to complete auto insurance coverage. There are numerous pros, including:
Strong financial ratings. Financial ratings may induce a snooze-fest when you read through them, but they actually hold nuggets of important information for you as a consumer. With the strong ratings mentioned previously, State Farm continues to show financial strength, which means they’ll have your back now and in the foreseeable future.
Digital savvy. The State Farm mobile app allows you to initiate a claim, access customer service, check the status of your claims, and more, all with the touch of a button. The website is easy to navigate and offers the same information at your fingertips.
Easy to obtain a quote. Along with the helpful digital assets, you’ll find it easy to get a direct quote for coverage. You can either call a local agent or fill out a straightforward form online. If further information is needed, someone will reach out to you.
Wide range of coverage options. Whether you need basic coverage, or are looking for something more specialized, your State Farm agent can tailor the policy to exactly what you need. You won’t have to worry about being over - or underinsured, since you can get the exact coverage you need.
No gap insurance coverage. Gap insurance is optional coverage available through some insurance companies. If you total your car, but you owe more than the car is worth, then this coverage will cover your financial “gap.” This is a popular feature for those who purchase brand new cars, since new cars depreciate in value so quickly. If you think you might need this option, you should know State Farm does not currently offer it.
No custom equipment coverage. If you’re an aftermarket accessory fanatic, you should be aware State Farm won’t cover your add-ons to your vehicle. If you’re going to make modifications, such as custom wheels or carbon fiber hoods, and you’re considering State Farm, then be aware your additional purchase won’t be covered if you’re in an accident.
State Farm vs. competitors
It doesn’t take long to realize there are lots of car insurance providers to choose from. Seems like all insurers have multiple commercials with famous spokespeople or noteworthy melodies. But how does State Farm stack up against other big-name companies (other than the catchy jingles, of course)?
AM Best Rating
JD Power Rating
State Farm vs. Progressive
Progressive is a well-known insurance company and, like State Farm, offers an extensive list of coverage options and number of available discounts. Progressive also offers options such as custom equipment coverage, gap insurance, or a pet policy for your furbabies.
Geico is known for being a lower-cost option with car insurance. Like State Farm, Geico offers plenty of discounts, a wide range of coverage options, and a large agent network.
Where Geico may set itself apart is the offering of Mechanical Breakdown coverage. This is additional coverage you can purchase once your car warranty runs out. It could potentially help you cover those expensive car repairs that always magically occur once your manufacturer’s warranty has expired.
This is a common question, and ultimately it’s 100% up to you. Keep in mind your state may have specific coverage requirements, but your local State Farm agent can make sure you meet the requirements. Two things to consider are: how much of a deductible am I willing to pay? And what are my personal liability needs? Answering these two questions can make it easier to chat with the agent. The last thing you want is for an accident to cause your financial ruin because you don’t have adequate coverage.
What state do I have to live in to be eligible for coverage?
State Farm offers auto insurance in all 50 states, as well as Washington D.C.
What kind of coverage does State Farm offer?
State Farm offers a wide range of products under the auto insurance umbrella. You’ll have access to collision, comprehensive, uninsured motorists, medical payments, and liability. You also have options such as car rental coverage, emergency roadside assistance, rideshare driver coverage, and several other special circumstances (classic cars, teen drivers, commercial).
Does Jake really only wear a red shirt and khaki pants?
Perhaps this isn’t information we must know, but it does help us put a face on such a large company.
The bottom line
State Farm auto insurance is a strong option for anyone who needs auto insurance coverage, from a basic plan to a more comprehensive policy. Even if your policy needs specialty coverage, such as for a commercial vehicle or teen driver. State Farm also offers a long list of discounts for those of us who like to know we are getting the best deal possible for the exact coverage we need.
State Farm has held strong financial ratings throughout the years, and continues to show stability during turbulent financial markets. The customer satisfaction ratings show State Farm one of the best with the claims process. In short, State Farm offers many indications it truly can be there for you, like a good neighbor should be.