State Farm

George J. Mecherle surmised that because farmers did not drive as much as others, he would have fewer losses, and because of this, all farmers would have more affordable insurance. Of course, this idea was a hit with other farmers and that is what initially made State Farm a successful insurance company. It wasn’t long after offering lower rates to farmers that the insurance company would branch out and begin offering other types of insurance such as homeowners insurance and life insurance, as well as banking and financial services.

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3.2Overall
3.5Coverage
3.5Cost
3.2Service
2.8Claims

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State Farm’s corporate headquarters today is located in Bloomington, Illinois and employs 79,200 people and has more than 16,700 agents that serve more than 71 million policies in just the United States and Canada. The chairman of the board and chief executive officer (CEO) of State Farm Mutual Automobile Insurance Company is Edward B. Rust, Jr., who is also the president and CEO of State Farm Fire and Casualty Company, State Farm Life Insurance Company, and other State Farm affiliates.

State Farm Story

Most consumers today have heard of State Farm, but many don’t know that in just 80 years’ time, State Farm has grown from a very small farming community based auto insurer to one of the world’s largest financial institutions. Even with the expansive growth of the company, we still have the original philosophy of insurance coverage being offered at the most affordable price. In addition to fair prices, we offer fair claim settlements, which has been a philosophy with us since the very beginning.

The idea of State Farm came about in 1921 when George J. Mecherle had to stop farming because his wife was quite ill, forcing the couple to move to Bloomington, Illinois. Before the couple moved, Mecherle was a very successful farmer, but in Bloomington he found a job as an insurance salesman, and found that he was a natural at the job of selling insurance to individuals. Though he was successful, he didn’t agree with the fact that farmers were charged the same premiums as non-farmers. He didn’t agree because he knew that farmers drove less, so they were less accident prone, and he believed they should have a lower premium on their auto insurance. Mecherle shared this idea with his boss who suggested that he start his own insurance company to offer farmers better insurance rates and in 1922 Mecherle opened his own firm, State Farm Insurance. The company introduced low risk rates, safe driver discounts, and semi-annual payment plans, all of which exist today and are commonplace with just about every insurance company. State Farm Insurance Company is now one of the 20 largest corporations on the Fortune 500. With more than 79,000 employees, more than 16,000 agents, and 71.6 million policies in the United States and Canada, it’s safe to say that the vision of Mecherle has been realized.

State Farm Overview

State Farm is in a very competitive business, yet it is the insurance company that insures more cars that any other insurance company in North America and the leading home insurer in the U.S. The insurance company has grown in size and their employees and agents provide auto, fire, life, and health policies to United States and Canadian residents. State Farm also offers customers banking, annuities, and mutual fund products to help them plan for their futures. State Farm Mutual Automobile Insurance Company is the parent of the State Farm family of companies that supplies all these other services.

State Farm Car Insurance

State Farm was founded on June 7, 1922 and concentrated on fulfilling the auto insurance needs of Illinois farmers through a mutual organization that was owned by the customers, also called policyholders. By 1942 the company was recognized as the nation’s largest auto insurance company, a recognition they have held ever since. One in every five cars on the road today is insured by State Farm. The company does not have shareholders as it is still a mutual company. State Farm Mutual Automobile Insurance Company is the parent company of several different subsidiaries that provide property insurance, life insurance, banking products, and mutual funds.

State Farm Life Insurance

State Farm Life is a subsidiary of State Farm Mutual Automobile Insurance Company and was founded in 1929. State Farm Life and Accident Assurance Company began servicing individuals in 1961 and fulfilled special requirements for life insurance in New York, Connecticut, and Wisconsin. State Farm Life Insurance Company, as well as State Farm Life and Accident Assurance Company, have been successfully marketing variable products to customers through State Farm VP management Corporation since 1998.

State Farm Fire and Casualty Company

This branch of the insurance company was founded in 1935. The idea behind this portion of the business was to provide property insurance for State Farm customers in the United States as well as Canada. The product lines written by State Farm Fire and Casualty Company include homeowners, boat owners, and commercial owners. Since 1964, this insurance company has become the largest insurer of homes in the nation.

State Farm County Mutual Insurance Company of Texas

This portion of State Farm started in 1961 and it protects motorists that reside in Texas. State Farm Mutual Automobile Insurance Company assumes most of the risk associated with the policies that are written for Texas residents. The two companies have a quota share reinsurance arrangement and the companies are under common management. This business meets the special needs of those that need automobile insurance in the state of Texas where there are unique requirements where minimums and the like are concerned.

State Farm Indemnity Company

This part of State Farm was founded in 1991 and writes auto insurance policies for those in the state of New Jersey. The company was started to provide the pricing and risk assessment that is unique to the New Jersey market. In 2006 State Farm Guaranty Insurance Company, which is a subsidiary of State Farm Indemnity Company, started writing auto insurance policies in the state of New Jersey, though all policies written by them are given to State Farm Indemnity Company.

State Farm General Insurance Company

This company started in 1962 as a property insurance affiliate and has since evolved into the primary writer of State Farm homeowners insurance as well as property liability insurance in the state of California. This insurance company provides those in California with the policies that fit their specific needs.

State Farm Florida Insurance Company

This portion of the State Farm family of companies opened its doors and started offering its services in 1999. Today, it is the primary writer of homeowners insurance as well as property liability insurance in the state of Florida. This portion of the business provides Floridians with the insurance coverage that is unique to their market needs.

This is a group of underwriters that are operating under the Lloyds Plan under Texas law. The insurance company writes homeowners insurance and commercial multiple peril insurance that is specific to state law. This group of underwriters began servicing Texans in 1983 and is managed by its attorney, State Farm Lloyds, Inc., as this is required by Texas law.

State Farm Bank, F.S.B.

This bank is considered a thrift charter by the Office of Thrift Supervision as of 1998. Most consumers know this portion of the nation’s largest insurance provider as State Farm Bank. State Farm Bank focuses on financial products to suit the needs of the consumer. State Farm Bank is known to complement the company’s focus on personal lines of credit and the like. The bank is a nontraditional financial institution and unlike most banks, it does not have branch offices for consumers to walk into. Consumers deal directly with agents of State Farm Bank, contact a telephone call center, or take care of business via mail or the Internet. As of 2005, the Bank held more than $12 billion in total assets.

State Farm Investment Management Corporation

Also known as SFIMC, this portion of the business serves as the investment advisor for the State Farm Associate and Retail Mutual Funds and underlying funds offered in connection with State Farm Variable Products. The corporation has been in existence for 35 years, providing plenty of experience in managing investment company assets. A related subsidiary, State Farm VP Management Corporation serves as the broker or dealer for the State Farm Associate and Retail Mutual Funds and State Farm Variable Products.

State Farm Homeowners Insurance

State Farm Homeowners Insurance protects your dwelling as well as all the personal possessions in the home and personal liability. Most clients report that their State Farm Homeowners Insurance provides them with the sense of security that they need, no matter where they live or what sort of weather and catastrophes may come their way. As of 2007, State Farm has been writing homeowners insurance policies for over 60 years and they insure 15 million homes. The insurance is affordable and trustworthy, and State Farm continues the outstanding service that Mecherle had in mind when he founded the company in 1922. Anyone can choose to protect their home with State Farm Insurance today; there are agents all over the nation that would be glad to provide you with the peace of mind you may be lacking with your current insurer.