So today we're going to go over state farm and try to figure out or decipher why this company is the number one insurance company in the united states according to insurance business mag or magazine state farm owns 9.27 of the market share in the united states doesn't sound like a lot but that's 65 plus billion dollars in revenue or in money coming into a company so that's a pretty big share that's the number one that's right up there with progressive and Berkshire Hathaway and guaco and all of those big name companies but state farm is controlling the industry and let's dive in a little bit further to find out why well it's been a few hours researching and i even went to go do a quote with them which we'll dive into in just a moment but some of the data that i found is right from state farm themselves they actually were listed as the number one auto insurer since 1942 so that kind of gives you a really good idea it's one of those things where they've been around so long and they haven't had enough waves or big changes.
where people left them for any specific reason they've been a good company they took a good care of customers and ultimately that turned into a very large business they're also the number two life insurer in the u's since 2016. and like the transformers are there's more that meets the eye in my conclusion to this piece and why i think state farm is so large and is the market shareholder is because they have all the business and what i mean by that is they don't have all the business as far as customers go but they operate in every single category i could think of they do boat insurance life insurance home insurance commercial insurance they insure pets they do like everything that you could think of that involves insurance and they've really hit the market through their agencies so the way state farm works is they're an agency built company when you go to them you're going directly to an agent and that agent is going to service you all in all they actually have 100 products.
I'm actually going to take up the cheat sheet this comes right from state farms website where they show that they've got 100 products they're approximately 19 200 agents which is a ton approximately 59 000 employees 84 million policies their auto is 44 million which is include small business 28 million for small business life insurance 8 million small business 2.8 million uh health insurance 891 000 mutual funds 423 000 and then 60 of state farm households have more than one product which is where i think they're really coining that market one of the known things is when you go to a company that company.
if you add an additional product or each additional product that longevity of the customer expands for example if you had auto insurance and you don't buy a renter's policy you're 30 more likely to switch your insurance company than another company that has both same thing with umbrella you add an umbrella you're going to add about 10 percent more longevity to that because one people don't want to reship all of those products but two it's kind of a struggle to find the fit and when you do you usually want to stay in that company for longer than just a year or the next couple years to make sure that you're getting the best dollar as far as coverages go the part that i saw that made a big difference was state farm actually offers something called rental car and travel expenses so unlike a triple-a which is what i usually recommend to companies is once you're over 100 miles or more further away from your destination if your car breaks down and it's going to take several days to fix aaa will give you money towards hotel rent food all of that stuff well in this situation opposite of what triple a is doing which is covering more of the road service part state farm is covering the accident portion of it so in this case if you have an accident and you're more than 50 miles away from home they're going to give you additional expenses or money towards getting a hotel or whatever the case is as far as food and whatnot to help you get by they're also going to pay part of a rental car that comes built into their policy overall one of their best tools that they've recently launched is their drive safe and safe app i did a really in-depth review on that and I'm going to link that up here for you guys to check out but that was actually one of the few things that i recommended in those drive systems because they did up to a 30 off discount so you can actually save a ton of money if you're a good fit for the typical driver now state farm isn't the best in all of the categories and actually they're not even the best in almost any of the categories their customer complaints are higher than average .
they have a lot of complaints even in the better business bureau and some of those complaint websites where their customers are upset for certain reasons and a lot of it has to do with claims i dived in and i actually started looking specifically at the bbb.com the better business bureau and i started researching why people were complaining against a farm and the reason they were doing it was mainly because of time frame a lot of it had to do with the slow responses to claims and it usually was by a week had gone by which to me is ridiculous I've had a claim and if a week went by I'm already driving my car by now that's not to say that's always the case but when you get into those situations where the coverages are questionable or if possible fraud pops up that's naturally going to happen and the first place that people go is to the internet well the thing is they measure that now and they give an average but state farm is above that average so they're not doing so great there so then why is state farm so popular besides them being around since 1942 well it's not just that it's not just the fact that they have 100 products.
but it's also the part where they have individual agents in the connection that you get when you have an individual agent you're going to have a better connection with that person and if you have a claim and you're having problems with that claim that agent can go fight that battle for you it's very similar to having independent agents where they can shop multiple companies they can shop progressive and Safeco and citizens and all those guys and you have that person that can fight for you one of the lines that i would actually give out which was completely true to customers was I'm your bulldog on a leash if you have a problem with the claim and you we think that it's fair then you just let me go and i will fight that battle for you that's one of the benefits of going through somebody like me the other part is you're always working with the same person you're not going directly to the company which is more of like your insurance's and your 21st.coms and your progressive.com and all of those dot-com ones where you don't have a specific agent you just have a call center person that was usually kind of trained but they're not going to fight specifically for you .
because once you hang up the phone there's another phone call that they have to do the exact same thing for so having a local agent is a huge reason that they're doing well but it's not the only reason because a lot of companies have local agents so the real main reason the reason that i think that state farm is doing well is because they are really good at averaging better than the typical company let's take progressive for example back in 2020 i personally claimed progressive as being one of the best companies at the time well what happens is they're a great fit for people with tickets and the great fit when you have an accident if you look at state farm they may not be as good of a fit when there's two accidents but if there's only one they kind of fight that market better and so overall they're looking for the people that are middle aged or older so you're anyone from 25 to 65 is really their sweet spot for customers which is ingenious because that's what most companies are chasing what they've done is they've made himself not the best not the lowest typically.
when you're looking at three companies and you call three of them you're going to fall within the middle that's just the same for buying any product you don't want to pay the extra premium to go with company a you don't want to pay the low premium because this is usually a junk product for company c and company b that fits right in the middle is going to be the best of both worlds and having that along with multi-line discount and the drive safe and save option it's almost an unbeatable tactic that i think state farm is doing extremely well at so you notice i didn't dive too much into coverage because there's not really much of a difference when you're looking at auto coverage you're going to notice that there's not a whole lot until you get into those specific companies like Safeco insurance or citizens insurance where those guys have actual add-ons to those auto policies where you can get cash back or you can get these ultra towing systems or you can do all sorts of things .
when you add a young driver they allow the kid to take a test they allow the kid to get like little amazon gift cards there's a lot of little things and I'll link those below if you're interested in those companies but they work really specific apart from those few companies that are doing that the coverages don't make a huge difference the only thing that you should be really focused on is the overall satisfaction rating what are people one paying and two how satisfied are they not just with the company because that's one piece you got to make sure that you have the right service in place and when you call up they're not going to be rude to you the other part is having the right claims department having a claim handled a week or more is a big problem for me now most people did like the claims process so I'm not saying that that's every situation but that's one of the reasons that i think that they're higher than average is because they do have a little bit slow of a process I've actually had a friend that worked there and they can contest to that a lot of their systems are a little bit outdated and it takes them a few more days longer to process things state farm.
i go hope you guys update that i can tell you right now with that plus that drive safe and save option customers are going to be good fits in a lot of situations but ultimately it's up to you guys let me know in the comments below what experience have you had if you've looked at state farm I'd love it if you chime in there because that's going to make the ultimate difference is we can start up a little chat here and we can decide what we think state farm really is not just what the size and the numbers show us in some of the off data because not everybody's a fit when they do these research pieces when i look at places like NerdWallet or insurance.com and things like that that's where some of this data comes from i don't look at just the one place because they might use the category of one profile and you'll usually see that the bottom of those blogs or vlogs that they talk about we used the average 35 year old that wanted the 100 300 and they didn't want full coverage well when you're comparing that to the guy that wanted full coverage it's hard to get the exact fit that's one of the reasons.
i made this channel and so i can help you decipher get through the muck and the mud of that so if that's something that you're interested in definitely subscribe for more videos like this i also wanted to go a little bit further and explain just one of the parts that i think could be a pass or a fail for the state farm which is their agents i have had fairly good success with the agents they've been fairly nice but I've also had fairly bad experiences with them and I'm talking from agent to agent whenever I've had a customer switch they are a company that the agent doesn't want to lose that business and from what i can guess i wouldn't imagine that state farm regulates that agent a whole lot because what i typically see is they will fight to save that policy which is perfectly fine .
but the way they do that because they're just one company they're an exclusive agency they can't go off and sell the safe codes in the citizens in the aka's because they work for state farm only and the only way that they can compete in that type of market where somebody comes in and gets a plus rated company just like them but offers 100 or 300 or 800 less then there's not a whole lot they can do besides change the coverages and that doesn't benefit anybody typically that's going to hurt the customer which is you more than it's going to benefit and not to say that all agents do this but I've had a lot of run-ins with them and that's the downfall of some of those agents doing that and that has nothing to do with state farm that's completely on the agents the issue is state farm hires those people and those are the people that represent their business got a feeling that's partially where a lot of those complaints are going above average so definitely you guys are going to chime in and let us know below on those comments I'm mark with think insurance i will see you in the next one
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