Have you been looking desperately for the best auto insurance company? This GEICO Vs State Farm car insurance comparison is a battle between arguably the two most popular insurance providers in the United States. State Farm is the largest auto insurer in the U.S. GEICO is the second largest auto insurer in the U.S. State Farm excels in selling insurance through thousands of agents.
GEICO sells most of their insurance policies online. You can’t go wrong with choosing either insurance giant, but I believe there is a winner. In this review, we will be taking a look at overall claims satisfaction, complaints, rates, mobile apps, financial strength, discounts/features, and more.
Information about both insurance companies.
State Farm was founded by George Jacob “G.J.” Mecherle a retired farmer and insurance salesman in 1922 and is based in Bloomington, Illinois. Today State Farm insures more home and auto policies than any other insurance company in the U.S.
Common lines used by State Farm
- “Like a good neighbor, State Farm is there”
- “It’s Jake. From State Farm.”
Government Employees Insurance Company (GEICO) was founded in 1936 by Leo Goodwin Sr. and his wife Lillian Goodwin. The company is headquartered in Chevy Chase, Maryland. In 2013 GEICO surpassed Allstate and became the nation’s second-largest private auto insurer.
Common lines used by GEICO
- “15 minutes could save you 15% or more on car insurance.”
- “So easy, even a caveman can do it.”
Who has the cheapest auto insurance rates?
We all have searched for affordable car insurance companies. However, when comparing auto insurance prices there is no specific company that is cheaper than the other. What is cheaper for you might cost someone else hundreds of dollars more a month. Auto insurance rates in Florida is not the lowest so I always make sure to compare rates in my state. I personally have been able to receive cheaper rates with GEICO and on average GEICO is cheaper than State Farm according to various insurance studies. However, once again car insurance rates are dependent on a number of different factors.
For example, those who live in places such as Detroit, Michigan, New Orleans, Louisiana, Newark, New Jersey, Miami, Florida, Los Angeles California, and Philadelphia, Pennsylvania pay more for insurance than those who live in Winston-Salem, North Carolina, Montgomery, Alabama, and Spokane, Washington. Where you live matters! Insurance companies take into consideration the number of claims in your area, climate and whether, crime rate, road conditions, and more. Pricing factors also include the gender of the driver, age of the driver, driving history, credit history, make and model of the car, etc.
Coverages and insurance services available.
Both companies offer:
- Bodily Injury liability
- Property Damage liability
- Uninsured Motorist coverage
- Medical Payments, no-fault or Personal Injury Protection coverage
- Comprehensive physical damage coverage
- Collision coverage
- Rideshare insurance
The more insurance policies that you bundle together with one company, the more you will be able to save and the easier it will be to manage your policies.
State Farm offers insurance services for various different insurance products such as auto, motorcycle, boat, snowmobiles, motorhome, homeowners, condo, renters, medical supplement, long-term care, hospital income, life, small business, veterinarian, identity restoration, and more.
GEICO offers insurance for auto, motorcycle, ATV, homeowners, renters, condo, mobile home, boat/PWC, RV, life, umbrella, identity protection, landlord, flood, travel, oversees, business owners, workers’ compensation, jewelry, pet, Mexico car insurance, collector car insurance, co-op insurance, commercial insurance for trucks, and more.
Availability comparison
Both companies are available in all 50 states in the U.S. GEICO is available oversees in Belgium, Germany, Greece, Ireland, Italy, Japan, Spain, and the United Kingdom. GEICO does not offer insurance to those in Canada. However, their coverage in the U.S. does extend north of the border. For GEICO customers who plan on traveling to Mexico, you will need to purchase a separate Mexico Tourist Auto Policy.
State Farm might extend the limited coverage into Mexico, but you have to contact your local agent regarding your policy.
J.D. Power auto insurance claims comparison
In the 2017 J.D. Power Auto Claims Satisfaction Study both companies were rated above the industry average. In the J.D. Power Study GEICO and State Farm rated higher than Allstate, Nationwide, 21st century, Esurance, Progressive, Liberty Mutual, Famers, Safeco, COUNTRY Financial, Travelers, MetLife, Mercury, and more.
GEICO
GEICO was the 6th highest rated insurance company out of 24 insurance providers. GEICO rated “better than most” with 4 out of 5 Power Circles. On a 1000-point scale GEICO received 870 points. In the First Notice of Loss category, which reveals how claimants rate the insurance company on the initial claims reporting process, GEICO received 4 out of 5 Power Circles. In the Estimation Process, Rental Experience, and Claims Servicing Process, which reveals how claimants rate the insurer representative handling the claim, GEICO received 4 out of 5 Power Circles. The only category in which GEICO received less than 4 Power Circles was the Repair Process category, which reveals how claimants rate the insurance company based on the repair process.
State Farm
State Farm was the 8th highest rated insurance company out of 24 insurance providers. State Farm was rated “about average” with 3 out of 5 Power Circles. On a 1000-point scale State Farm scored 5 points lower than GEICO with 865 Points. State Farm received 3 out of 5 Power Circles in FNOL, Claim Servicing, the Repair Process, Rental Experience, and the Settlement Process. The only category that State Farm received 4 out of 5 Power Circles in was the Estimation Process, which reveals how claimants rate the insurance company based on the estimation process. State Farm even received 3 out of 5 stars in the J.D. Power Home Insurance Study. However, GEICO was not included in the study.
Complaint comparison – BBB allows us to know how each company handles customer complaints. BBB ratings are based on complaint history with BBB, type of business, time in business, transparent business practices, licensing and government actions known to BBB, and more.
Both companies rate well with Better Business Bureau. These good BBB ratings and J.D. Power ratings are positive signs that you can trust both insurance companies in case of an emergency.
Financial strength rating comparison
Does an insurance company’s financial strength rating matter? The answer is a clear yes. Sometimes it pays to use the company that has more assets at their disposal. Through experience I have found that companies with a higher financial strength rating tend to offer better customer service. You don’t want a company that is going to wrestle with you about paying a claim. Nor do you want a company to rip you off by giving you an unreasonable claim pay out. I want you to examine your own life for a moment. When are you most likely to give to others, when you are in a financial position to give or when you are low on cash? If your honest, you are most likely to give when you are in a financial position to give. Now apply the same logic to an insurance company to find out who is more likely to offer a fair and better claims experience.
State Farm
In 2015, it was reported that State Farm had 241.183 billion in total assets. This number has since skyrocketed up. State Farm has received excellent grades from well-known and respected companies such as A.M. Best and S&P Global Ratings.
- A.M Best rating – “A++”
- S&P rating – “AA”
GEICO
In 1996, GEICO became a wholly-owned subsidiary of Berkshire Hathaway, led by the successful investor Warren Buffett.
- A.M. Best, a leading independent analyst gave GEICO an “A++.”
- Standard & Poor’s has awarded GEICO with an “AA+” rating for financial strength, which is slightly higher than State Farm’s rating.
- Fitch gave Berkshire Hathaway insurance units a financial strength rating of “AA+.”
- Moody’s Investors Service gave GEICO an “Aa1” financial strength rating.
Discounts and features comparison
GEICO discounts
Membership Discounts – You can save on auto insurance if you belong to one of the 800 groups that GEICO partners with. Here are some benefits for being a GEICO partner, competitive and customized GEICO products, money-saving discounts, 24-hour service, immediate coverage, and more.
What school do you attend or who is your employer? A few colleges that you can save with are Fort Valley State University, Hawaii Pacific University, Seattle University, University of Louisville, Arizona State University, Chicago State University, Denver University, Eastern Kentucky University, Georgia Southern University, Indiana University, Mississippi State University, and more.
A few organizations that you can save with are Access Global, Lifetime Fitness, American Kennel Club, World Golf Tour, BJ’s Wholesale Club Members, American Bass Anglers, American Alliance of Museums, American Library Association, and more.
To find your organization all that you have to do is go to the membership discounts page and enter your organization name. You also have the option of finding your organization from one of their categories.
Military Discount – GEICO offers one of the best military discounts among insurance providers. With GEICO active or retired military officials can save up to 15% on their premium.
Accident Forgiveness – Did you know that making just one auto claim can cause your rates to skyrocket an average of 41%? Accident Forgiveness gives drivers more peace of mind. With Accident Forgiveness, your rates will not increase due to an accident. Accident Forgiveness is not available in California, Connecticut, and Massachusetts.
Five-Year Accident-Free – Having a clean driving record can save you a lot of money with GEICO. In fact, good drivers can save up to 26% on their premium.
Seat Belt Use – Not only does always wearing a seat belt keep you safe, but always wearing a seat belt can help you to get a discount of up to 15% off the medical payments or personal injury protection portion of your premium.
Multi-Car – GEICO is a great company for those who need car insurance for 2 cars. With GEICO, you could get a discount of up to 25%.
Good Student – Full-time students that receive good grades can save up to 15% on certain coverages.
State Farm discounts
Drive Safe & Save – Unfortunately, insurance companies predetermine your insurance rates by your age, previous driving history, and more. Drive Safe & Save gives you a chance to lower your insurance rates.
State Farm’s telematics program allows you to prove yourself to State Farm. The safer that you drive the more you can save on your policy in the long run. Driving factors that will determine how much you save with Drive Safe & Save include miles driven, acceleration, braking, driving speeds, and more. You can check out your habits and savings on State Farm’s website and mobile app.
Discount Double Check – This is not really a discount. However, Discount Double Check is important. Many insurance providers don’t allow you to know what you can save on until you ask. Many policyholders are missing out on hundreds of dollars worth of savings. With Discount Double Check you could save up to 40% by getting all the discounts that you deserve.
Steer Clear – Drivers under the age of 25 can save as much as 15% with the Steer Clear Program. To qualify for this discount, you have to have had no at-fault accidents or violations for the past 3 years.
Multiple Auto – State Farm’s multiple auto policy allows policyholders to save up to 15% by adding additional vehicles. All the additional vehicles must be owned by related individuals in your household. Friends do not qualify.
Good Student Discount – GEICO’s Good Student discount allows you to save up to 15% on your policy. However, State Farm’s Good Student discount allows you to save up to 25%. The great thing about State Farm that separates them from other companies is that State Farm’s Good Student discount lasts past graduation until you turn 25.
Vehicle Safety Discount – Drivers with 1994 cars or older can save up to 40% on medical-related coverage.
Student Away at School – You may qualify if an operator of your car moves away for college and only uses the car while at home during holidays.
Mobile app comparison
GEICO
In Forrester’s latest US Mobile Auto Insurance Functionality Benchmark GEICO’s app was ranked as the #1 insurance mobile app. GEICO’s mobile app is easy to use and it comes packed with helpful insurance features such as Kate. Kate is similar to Apple’s Siri. Kate is an intelligent personal assistant that helps you to find answers to your insurance questions. The awesome thing about Kate is that just like a human she grows in her knowledge to better equip GEICO customers. GEICO’s app allows you to use Easy Estimate. What Easy Estimate does is speed up the claims process by allowing you take and submit photos of damages.
The GEICO mobile app also allows you to:
- Use digital ID cards.
- Track your cars service history
- Pay a bill
- Get an insurance quote
- Get roadside assistance
- Find gas stations easily
- Chat with a GEICO representative.
- Receive notifications regarding upcoming insurance payments.
State Farm
Formerly known as Pocket Agent (State Farm’s mobile app) is available on iPhone, iPad, Android, and Kindle Tablet. State Farm Mobile offers a simple yet attractive user-interface that comes packed with various insurance features.
Features include:
- CarCapture – CarCapture makes car shopping easier.
- Steer Clear
- Drive Safe & Save Mobile
- Roadside assistance
- Submit an auto claim
- Pay bills
- Contact or search for a State Farm insurance agent.
- Search for a service repair facility.
- View insurance card
Roadside assistance comparison – Roadside services are great for when you have car troubles.
The GEICO Emergency Road Service can be added for as little as $14/yr per vehicle and covers:
- Jump starting your vehicle
- Labor to change a flat tire
- Towing (not accident related)
- Lockout services
The benefits of State Farm’s 24-Hour Emergency Road Services include:
- Up to one hour of mechanical labor where the vehicle broke down at.
- Locksmith labor
- Gas, oil, tire, and battery delivery
- Towing for non-drivable cars
- Towing for vehicles that are stuck
Bottom line
These are two awesome insurance companies with top financial strength ratings. There is really no better company. Even though GEICO is superior in the J.D. Power Claims Study, they both did better than most. I personally use GEICO because GEICO gives me the cheapest month to month car insurance rates. However, I have many friends and family who use State Farm and love it.
I strongly advise you to compare quotes right now and allow that to be one of the deciding factors for your insurance choice.