Do you know your insurer? (State Farm edition)

If you live in Washington State, chances are you, or someone you know, is insured by State Farm. According to the Washington State Office of the Insurance Commissioner, State Farm is the largest automobile insurer in the state. In 2013, they received approximately 14% ($555,000,000) of all Washington auto premiums, nearly double the second largest insurer. So, they are the biggest, but are they the best in customer satisfaction?

I’d like to address customer satisfaction, but first a few tidbits. Did you know that their key jingle “Like a good neighbor” was written in 1971 by Barry Manilow? Also, did you know that State Farm has the dubious honor of convincing the United States Supreme Court, sort of, that punitive damages should be no more than 9 times actual damages? And did you know that the current CEO of State Farm is the third CEO in a family dynasty? Edward Rust, Jr., has been CEO for approximately 30 years. His father, the previous CEO, died of a heart attack while he was leading the company. Edward Rust’s grandfather was CEO before that. All told, the Rust family has been at the helm of State Farm since 1954.

I admit, this surprised me a little, since State Farm is a Fortune 50 company (net worth of $75,900,000,000) that doesn’t have the family name recognition like WalMart or Koch Industries. Maybe it shouldn’t surprise me that there is a family dynasty in the insurance business. Maybe I’m just wondering why I’m not part of a financial dynasty. Regardless, I was curious about what a family dynasty looks like, so I asked the Google. And the Google did not disappoint. It turns out being part of a family dynasty means living only about a mile from corporate headquarters in a stately home on 60 acres. For a relatively frugal CEO, it also means having all the money and big-tire trucks you need.

But I digress. Back to the meat of the matter: how are they for customer satisfaction? Are you in good hands with State Farm? Apparently it depends on your perspective. The 2013 statistics from the Washington Insurance Commissioner show that they have more than double the number of car insurance complaints per market share than Pacific Northwest insurer Pemco, but are about average when compared to other national insurers like Farmers and Allstate. So, if you are in the market for insurance and you like national companies, State Farm might be able to save you 15% or more on your car insurance premiums. There are several agents to choose from in Kennewick alone, and they are all along Clearwater Avenue. But, just to be very clear, I don’t know any good neighbor that will pay you to repair your car after an accident.

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