State Farm Homeowners Insurance Review

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State Farm

OVERALL

8.0

THE GOOD

Great for first-time homebuyers

Strong financial ratings

THE BAD

Limited discounts

THE BOTTOM LINE

State Farm is the largest and most popular insurer in the country, providing policies for homes and other property types in all 50 states. State Farm is successful in large part because of its extensive network of agents, its industry leading financial strength, and its excellent online resources and digital tools for first-time insureds.

Cost

7.0

Confidence

9.5

Customer rating

7.8

Policy options

6.8

Customer experience

8.5

STATE FARM COMPANY SPOTLIGHT

4 out of 5

J.D. Power Rating

A trusted customer satisfaction and product quality research agency

A+

BBB Rating

A nonprofit organization focusing on marketplace trust and product quality

A++

A.M. Best Rating

100-year-old U.S. credit rating agency focused on the insurance industry

The Bottom Line

When insuring your home with State Farm, you can expect a few things: affordability, consistency and reliability. State Farm isn’t going to blow you away with multiple policy tiers and coverage add-ons and discounts like other insurers in the industry, but they excel at doing what a basic provider of homeowners insurance should. Need to make a change to your policy or file a claim? State Farm has over 18,000 agents — there’s probably five or six in your area alone who can assist you. Concerned about what will happen if you lose your home in a disaster? Don’t be, State Farm has an A++ financial rating with A.M. Best (the best rating an insurer can have) and a AA long-term outlook rating with S&P, so rest assured this company will have your back if something goes awry.

The Details

The Good

Great for first-time homebuyers. State Farm has multiple useful resources and calculators for first-time homeowners who are unfamiliar with insurance jargon and the ins and outs of homeowners insurance.

Strong financial ratings. State Farm holds down high ratings with top rating agencies S&P and Moody's as well as an industry-best A++ rating with A.M. Best. With State Farm, you can insure your home and most important assets with confidence.

The Bad

Limited discounts. Discount availability will vary from state to state, but State Farm advertises very few discount options compared to that of its competitors. State Farm doesn't appear to offer certain common discounts and credits you'd find with its competitors, like savings if you go an extended period without filing a claim or if you live in a new home.

Cost

7.0

While the price of homeowners insurance with State Farm will depend on factors lke where you live, your home's construction type, and the age of your home, you can expect to pay around $1,500 annually for coverage with State Farm, according to Policygenius data. That makes State Farm home insurance rates a little lower than the average quoted policy with Policygenius.

Discounts

A great way to keep your homeowners insurance costs down is to take advantage of discount opportunities. Here are some (but not all) of the discounts offered by State Farm. Keep in mind that some discounts aren’t available in every state.

• Multiple line discount - If you purchase multiple types of insurance with State Farm, you could be eligible for a sizeable discount

• Home alert protection discount - Reduce your homeowners insurance rates when you install a burglar alarm or fire protection device in your home

• Roofing discount - Save money on premiums if you use impact-resistant roofing materials

• Higher deductible discount - If you increase your deductible an extra $500, $1,000, or $5,000, you’ll see lower insurance premiums with State Farm. However, be sure not to increase so much that you can't afford to pay it in the event that something bad happens

Confidence

9.5

Homeowners insurance protects your most important financial assets, so you'll want to be sure you're insuring your home, your personal possessions, and other assets with a company that will be able to pay out your claim in the event of a disaster. State Farm has been around for almost a century, and has excellent financial strength ratings with S&P, Moody's, and A.M. Best.

• Year founded: 1922

• Standard & Poor's rating: AA

• Moody's rating: Aa1

• A.M. Best rating: A++

Standard & Poor's measures companies' creditworthiness and is used primarily by financial investors and other market stakeholders. S&P is also valuable in measuring the long-term financial stability of insurance companies. A AAA rating is the highest issuer credit rating assigned by S&P. State Farm has an AA rating with S&P — the third highest rating a company can receive.

Moody's is very similar to Standard & Poors, except rather than measuring a companies ability to remain financial stable and creditworthy, Moody's measures what the expected losses would be if a company were to go into default. It's particularly valuable in analyzing the value of stocks and bonds with certain companies. A AAA rating is the highest possible score you can receive from Moody's. State Farm's Aa1 rating with Moody's is the second highest rating a company is eligible to receive.

A.M. Best is the most reliable credit-rating tool insureds can use to gauge the financial health of a particular company. Unlike S&P and Moody's, A.M. Best is focused exclusively on the insurance marketplace. A good score with A.M. Best means a company is more likely to fulfill their financial obligation to you when it comes time to file a claim. With a score of A++, State Farm has the highest rating a company can receive with A.M. Best.

Customer ratings

7.8

It's important to know what experts think about homeowners insurance companies - but it's also good to know what actual customers and consumer sentiment sites are saying, too.

• J.D. Power: 4 / 5

• BBB: A+

• Consumer Affairs: 3.9 / 5

• Consumers Advocate: 4.6 / 5

• Trustpilot: 2.5 / 5

• NAIC complaint index: 0.39

J.D. Power provides studies that rate insurance companies across policy offerings, price, clarity of billing and policy information, interaction, and claims. An overall satisfaction score, "based on how customers view every experience of their experience with homeowners insurance providers," is reflected here and used for our ranking.

The Better Business Bureau ranks companies across a large swath of criteria. While consumers can submit ratings to the BBB, these scores are not taken into account in their rating, although tangential metrics that take into account customer experience are.

Consumer Affairs is a platform that lets consumers directly rate customers, while Consumers Advocate rates companies based on stability, reputation, and policy coverage.

The National Association of Insurance Commissioners tracks the number of complaints submitted to state insurance departments with their national complain index. A score of 1 is the baseline average, and a score of 0 means there weren't enough complaints to count. State Farm's 2018 score of 0.39 means they received less complaints than the average company.

Policy options

6.8

State Farm offers a robust base homeowners insurance policy with extended replacement cost coverage for the home, meaning if its rebuild cost exceeds the policy's limit of liability, coverage will automatically increase an additional 20% of the insured amount. State Farm also provides a number of additional coverages that you can add onto your policy for an additional annual premium.

Standard coverage

• Dwelling coverage - Protects the structure of your home, floors, countertops, and built-in appliances within the home up to the limit specified in your policy. State Farm also includes a 20% extended dwelling option in your policy that automatically increases your dwelling limit 20% if you exceed your coverage limits in a claim

• Dwelling extension - Also known as other structures coverage, State Farm covers detached structures on your property for up to 10% of your policy’s dwelling coverage

• Personal property coverage - State Farm covers your personal property both inside and outside the home for up to 75% of your policy’s dwelling limit

• Loss-of-use coverage - State Farm will pay for hotel expenses, increased costs from eating out, and travel expenses you incur while your home is being repaired or rebuilt after a disaster. Your coverage limit is up to 20% of your dwelling limit

• Personal liability coverage - Covers legal and medical bills if you’re held liable for accidental injury or personal property damage to others. You have the option of anywhere from $100,000-$500,000 in coverage

• Medical payments coverage - If a guest is injured in your home, this covers their medical expenses regardless of who was at fault. State Farm offers anywhere from $1,000-$5,000 in coverage

Additional coverages

• Back-up of sewer or drain coverage - Protects your stuff in the event your sewage goes in the reverse direction of where it’s supposed to go

• Cyber event, identity restoration, and fraud loss coverage - If your identity is stolen or you’re victim to a cyber attack, this coverage reimburses you for expenses you incur while resolving the issue

• Jewelry, furs, silverware, goldware, and firearms - Option of increasing the sublimits or maximum amount you will be paid out on a claim for the aforementioned items

• Business property coverage - Option to increase business property sublimits

• Building ordinance or law coverage - Pays for any increases in construction costs if you need to move, rebuild or repair your home because of a building ordinance

• Fungus coverage - Up to $20,000 in fungus removal and remediation coverage

• Loss assessment coverage - If you live in an HOA, this pays for any amount you’re assessed for HOA repairs or fees

• Home systems protection - Also known as equipment breakdown coverage, it essentially acts as a home warranty and it covers large appliances like a water heater, home entertainment system and central A/C if they break down

• Energy efficiency upgrade - When your home incurs a loss, this coverage will pay for the increased cost of repairing or replacing sections of your home and appliances with green materials and products

• Service line coverage - Repairs or replaces homeowner-owned water and sewer piping, electrical service lines and data lines that fail or are accidentally broken

Customer experience

8.5

State Farm coverage is available everywhere in the country. The company website has impressive resources and digital tools for homeowners, and its customer satisfaction and claims ratings with J.D. Power are above the industry average.

State availability

State Farm homeowners insurance is available in all 50 states and the District of Columbia

Digital tools

• Web application

• Instant quote

• Web bill pay and policy management

• Web claims

• Extensive articles, tools, and calculators

• State Farm mobile app

The application

State Farm’s application process is remarkably fast and can be done mostly online. You simply plug in your ZIP code, indicate when you’d like your policy to start, and then you provide basic information about your home. You’ll be given the option to indicate your home’s replacement cost yourself or use State Farm’s estimation tool that guesses its insured value based on home characteristics. Once you’re done, State Farm provides you with a list of local agents to call and make sure everything on your application is correct so you can finalize your policy. The entire process should take around 10 to 15 minutes.

Ease of claims

State Farm’s website provides a transparent and complete picture of how their claims process works. They list a few different options for filing claims: by contacting your agent directly, calling State Farm’s claims division, logging into the State Farm website and filing a claim, or by using the State Farm mobile app.

Payment methods

• Mobile app payments

• In person payments

• Phone payments

• Mail payments

Policygenius offers insurance policies from many of the nation's top insurers, who pay us a commission for our services. However, all editorial choices are made independently.