At a Glance
Rating Breakdown
Performance Overview
Scores out of 5, based on our editorial analysis
About State Farm
State Farm Mutual Automobile Insurance Company was founded in 1922 by George Jacob Mecherle, a retired Illinois farmer turned insurance salesman who believed that farmers, who drove less and had fewer accidents than city dwellers, were being overcharged by the urban-focused insurers of the era. Mecherle organized State Farm as a mutual company, meaning it is owned by its policyholders rather than shareholders. This structural distinction is not merely a marketing point; it shapes the company's behavior at every level. Unlike publicly traded insurers like Progressive (PGR) or Allstate (ALL), State Farm does not report quarterly earnings to Wall Street, faces no pressure to grow premiums for growth's sake, and can return surplus capital to policyholders as dividends or rate reductions. State Farm has historically issued policyholder dividends during profitable years, effectively reducing the net cost of coverage by 5-12% for eligible customers, a benefit no publicly traded competitor can match. State Farm's market dominance is staggering and difficult for competitors to replicate. The company holds approximately 16% of the U.S. private auto insurance market and 18% of the homeowners market, making it the number-one writer in both categories. This is powered by a network of 19,000 exclusive (captive) agents, each of whom represents only State Farm products. The captive model means your agent's livelihood depends entirely on State Farm policyholders, which creates strong incentives for proactive service, claims advocacy, and long-term relationship building. However, captive agents cannot shop your coverage across multiple carriers the way an independent agent can, so you are trusting that State Farm's pricing is competitive without an easy comparison mechanism. State Farm's AM Best A++ (Superior) financial strength rating, the highest available, has been maintained for decades and is backed by over $130 billion in assets. The trade-off for State Farm's service quality is that its pricing sits in the middle of the market rather than at the bottom. State Farm is rarely the cheapest quote for any individual risk profile; GEICO and Progressive will typically beat State Farm on price for clean-record, good-credit drivers by 10-20%. Where State Farm justifies its premium is in claims handling: the company consistently ranks in the top three for J.D. Power Auto Claims Satisfaction, and policyholders report that their agents personally advocate during the claims process, a level of service that direct-to-consumer competitors cannot provide. State Farm also offers an unusually broad product suite including banking (savings, checking, CDs through State Farm Bank), mutual funds, and investment advisory services through its agents, making it possible to consolidate financial relationships in a way that no pure-play insurer can match.
Key Features
Captive Agent Model with Claims Advocacy
State Farm's 19,000 exclusive agents represent only State Farm, which means your agent has a direct financial stake in your satisfaction and retention. During claims, your agent can intervene with adjusters on your behalf, escalate disputes, and provide local knowledge (such as recommending trusted body shops). This personal advocacy consistently produces J.D. Power Top 3 claims satisfaction rankings. The downside: captive agents cannot compare quotes from other carriers, so you must shop independently to verify competitive pricing.
Drive Safe & Save (No-Penalty Telematics)
State Farm's Drive Safe & Save program tracks driving behavior through the State Farm mobile app or a compatible connected vehicle (OnStar, Ford SYNC, etc.). Unlike GEICO's DriveEasy, State Farm explicitly guarantees that Drive Safe & Save will not increase your premium regardless of your driving score. Discounts can reach 30% for safe, low-mileage drivers. This no-penalty structure makes it the lowest-risk telematics program among major carriers and is recommended for any State Farm policyholder who drives fewer than 12,000 miles annually.
Mutual Company Dividends and Rate Stability
As a mutual company, State Farm has historically returned surplus underwriting profits to policyholders as dividends, effectively reducing the net cost of coverage by 5-12% in profitable years. The company also tends to raise rates more gradually than publicly traded competitors, absorbing short-term loss spikes rather than passing them immediately to policyholders. During the 2022-2024 hard market, State Farm raised auto rates by an average of 18%, compared to 28% at Allstate and 22% at Progressive, though these increases varied significantly by state.
Integrated Banking and Financial Services
State Farm Bank offers FDIC-insured savings accounts, checking accounts, CDs, and money market accounts directly through your local agent. The company also provides mutual funds, IRAs, and financial planning services. While State Farm Bank rates are not market-leading (typically 0.5-1% below online banks on savings), the convenience of managing insurance, banking, and investments through a single agent relationship appeals to policyholders who value simplicity. Auto loan rates through State Farm Bank are competitive, and financing a vehicle through State Farm can unlock additional insurance discounts.
How It Works
Contact an Agent
Find a local State Farm agent online or by phone. Agents provide personalized quotes and coverage recommendations.
Customize Your Policy
Work with your agent to pick your coverages, deductibles, and optional endorsements based on what you actually need.
Apply Discounts
Your agent identifies all eligible discounts including multi-line, good driver, good student, and safe vehicle savings.
Manage Online or In-Person
Access the State Farm app for payments, claims, and ID cards, or visit your agent for in-person support anytime.
What They Do
- Auto Insurance
- Homeowners Insurance
- Life Insurance
- Health Insurance
- Renters Insurance
- Business Insurance
- Banking & Financial Services
Debt Types They Take On
- Auto
- Homeowners
- Life
- Health
- Renters
- Business
- Condo
- Umbrella
Fee & Cost Structure
Regulatory & Trust
Review Summary
Notable Case Studies
Full-Service Family Consolidation with Agent Advocacy
Family of four in suburban Minneapolis, Minnesota consolidated auto (3 vehicles: 2022 Subaru Outback, 2021 Toyota RAV4, 2019 Honda Accord), homeowners ($420,000 dwelling), $2 million umbrella, and two $500,000 term life policies under a single State Farm agent. Previously, they held auto with Progressive ($3,200/year), home with Travelers ($1,680/year), and life with MetLife ($1,140/year combined).
Mutual Dividend Benefit for Long-Term Policyholder
58-year-old policyholder in rural Iowa has maintained State Farm auto and homeowners coverage continuously since 1992 (32 years). Clean claims history with only one homeowners claim (hail damage) in 2017. Annual premium for auto (2020 Chevy Silverado, full coverage) and homeowners ($280,000 dwelling) totals $2,840.
Pros & Cons
Pros
- Mutual company structure enables policyholder dividends of 5-12% in profitable years, effectively reducing the net cost of coverage in a way no publicly traded competitor can replicate
- 19,000 captive agents provide personal claims advocacy, policy reviews, and in-person service that consistently produce J.D. Power Top 3 claims satisfaction rankings across auto and homeowners
- Drive Safe & Save telematics guarantees no rate increase regardless of driving score, making it the only zero-risk telematics program among the top 5 national carriers
- AM Best A++ financial strength rating backed by $130+ billion in assets, providing unmatched claims-paying stability even during catastrophe-heavy years
- Broadest product ecosystem in the industry (auto, home, life, health, banking, investing, annuities) allows true one-agent financial consolidation with cross-line discounts
Cons
- Captive agents cannot compare quotes across carriers, so policyholders must independently shop to verify competitiveness; State Farm rarely beats GEICO or Progressive on price alone for auto-only coverage
- Online quoting and self-service capabilities lag behind GEICO and Progressive; many policy changes still require contacting your agent directly rather than handling through the app
- Policyholder dividends are not guaranteed and vary by year, state, and policy type; in years with high catastrophe losses, dividends may be reduced or eliminated entirely
- State Farm pulled out of homeowners insurance in California in 2023 due to wildfire losses, leaving existing policyholders without renewal options and demonstrating that even the largest insurer can exit markets when underwriting becomes untenable
User Reviews (10)
there's a State Farm office in literally every town in America
19,000 agent offices across every state. When we moved from Illinois to North Carolina, transferring our policies was a phone call. New agent in our new town, same coverage, no gap. For mobile families who move between states, State Farm's agent network means you always have a local person. Our new NC agent proactively reviewed our coverage for state-specific requirements we didn't know about. That kind of service doesn't exist at direct writers.
app has gotten much better, almost caught up to GEICO
State Farm's app used to be terrible. The 2025 redesign is a massive improvement -- real-time claim tracking, digital ID cards, easy policy changes, and a surprisingly good bill pay interface. Still not quite GEICO-level in terms of claims photo upload and speed, but the gap has closed significantly. For a company built on agents, their digital investments show they understand customers want both options.
claim handled in 10 days, adjuster was local, check was fair
Water damage from a burst pipe. Filed Saturday morning. Agent called me Saturday afternoon. Local adjuster came Monday. Estimate approved Tuesday. Remediation company started Wednesday. Check for $14,200 arrived in 8 business days. Total: 10 days from claim to paid for a complex home claim. State Farm's J.D. Power claims satisfaction scores are consistently top 3. The local adjuster model makes a real difference in speed and quality.
their banking and investment products are mediocre
Their banking stuff is not good. Like at all. Savings rate is a joke compared to online banks. Stick with them for insurance and go somewhere else for banking.
Drive Safe & Save discount was 18% -- less than competitors promise
State Farm's Drive Safe & Save telematics program gave me an 18% discount after the monitoring period. Allstate Drivewise promised up to 40%, Progressive Snapshot up to 30%. My 18% at State Farm was honest and I never felt like the goalposts moved. Some competitors inflate the "up to" number and deliver much less. I'd rather get a guaranteed 18% than chase a theoretical 40%. State Farm's telematics is less aggressive but more predictable.
my State Farm agent has been my insurance guy for 20 years
Same agent since 2005. He came to our house when we had a roof claim and walked it with the adjuster himself. That's the State Farm difference right there. Try getting that from a 1-800 number.
home+auto bundle was actually cheapest when I did the total math
State Farm standalone auto: $1,100. Standalone home: $1,500. Total: $2,600. With multi-line discount: $2,210. GEICO auto + separate home: $850 + $1,700 = $2,550. State Farm bundled was $340 cheaper than the "cheaper" option of GEICO auto + separate home. Always do the TOTAL math across all insurance lines. The cheapest auto insurer doesn't always produce the cheapest total insurance bill when you factor in multi-policy discounts.
$1M umbrella policy for $180/year because I bundle
$1M personal umbrella policy through State Farm: $180/year. The multi-policy pricing makes umbrella coverage extremely affordable. A standalone umbrella from a separate carrier would be $300-$400. For anyone with assets to protect (homeowners, people with investment accounts), a $1M umbrella at $15/month is the cheapest peace of mind in insurance. My agent set it up in one phone call. If you don't have an umbrella and own a home, you're underinsured.
paying a premium for the agent model -- $400/year more than GEICO
Yes GEICO is cheaper. I know. I stay for my agent. When I need to file a claim I don't want to explain my whole life to some random call center person.
adding my 16-year-old doubled my premium
Added my 16 year old and my premium literally doubled. DOUBLED. I get it, teen drivers are expensive, but cmon. Good student discount barely made a dent.
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