GEICO vs State Farm Auto Insurance

If you want to pay a fair premium you need to carry out price, coverage and company comparison. It may be easier to find the cheapest quote or great coverage but you need to get all three of them right to have the best policy. There are around 100 carriers in almost every jurisdiction. So, there are endless combinations to go through.

However, probably none of them as meaningful as State Farm vs GEICO comparison for at least four significant reasons. Currently, they are the two largest automobile insurers in terms of volume of business. Secondly, the former is a mutual company and the latter traded publicly until 1996 and now wholly owned subsidiary of Berkshire Hathaway Inc.. Thirdly, the former mainly relies on its strong agency network to sell while the latter relies on direct sales. And finally, they offer noticeably different discounts.

Both are always at the top of the car insurance comparison charts for most metrics. They insure nearly 30% of all US cars (State Farm 18.3% and GEICO 11.4%). They both have the highest (A++) financial strength ratings from AM Best, known to have above average claim satisfaction and over 83/100 customer satisfaction. In addition, they both offer 24/7 customer service, claim reporting and online quotes. It is fair to say that you cannot go wrong with either of them. Nevertheless, there will always be people who will dispute this remark and say negative things about either of the carriers. 

Before we go any further there is no doubt that both are pretty impressive in terms of how many automobiles they cover and how well they are regarded by their policyholders. You simple cannot hold the first and second positions if you aren’t good in terms of customer service and claim payment and competitively priced.

In general, GEICO is more affordable than State Farm. But the opposite may be true in your case depending on circumstances and where you live. On the other hand, customer satisfaction goes the other way. So customer looking for the best prices may go for the former while customers looking for better customer service choose the latter.

Secondly it is significant to have this comparison because there are on-going debates that mutual automobile insurance companies offer better value for their customers. In addition, mutual companies are trusted more by their policyholders because of this mutual status that gives them sense of ownership. Finally, it doesn’t have to compromise on long term customer benefits for short-term profits as both approach ultimately serve their owners, the policyholders.

On the other hand, GEICO is a great example of an aggressively competitive and progressive provider that thrives in open market environment. Maybe it is down to their ownership structure that demands great returns for the shareholders and this is only achieved by providing exemplary customer service and competitive pricing.

Perhaps it is the long established management structure, corporate ethics and mottos that matter since it is hard to argue against achievements of both insurers. Also, we shouldn’t forget that these two are good examples of their kind. For example, Allstate relies on agency network too but doesn’t do as well as State Farm in sales department in recent years. And many with shareholders aren’t doing as well as GEICO either.

Table: Discounts Offered GEICO vs State Farm Auto Insurance

GEICO State Farm
·       Anti-Theft Devices ·       Anti-Theft Devices
·       Defensive Driver Courses ·       Defensive Driver Courses
·       Good Student ·       Good Student
·       Multi-Line ·       Multi-Line
·       Multi-Vehicle ·       Multi-Vehicle
·       Internal Safety Features ·       Internal Safety Features
·       Safe Driving Record ·       Safe Driving Record
·       Group Membership ·       Student away at School
·       Military Service Member ·       Young Driver Training
·       Anti-Lock Breaks ·       Telematics
·       Daytime Lights ·       Annual Mileage

Thirdly, they may offer slightly different discounts. Check which one offers what discount and see if you would be better off with one of them. Also, you need to make sure that you get quotes from both of them and some others. What really is important at the end of the day is the final figure.

Type of discounts offered can make a difference to the final price especially for some drivers. If you are a teenager you can get great rates using State Farm’s Drive Safe and Save program that utilizes telematics devices. On the other hand, you may be able to get a better deal if you are a member of one of the over two hundred associations and organizations (including military) that get special discounts from GEICO.

And finally, both are on the extreme end of the spectrum in terms of how they reach to their customers. State Farm currently has the largest network of agencies and they are increasing. They rely heavily on this network of local agents. On the other hand, GEICO aims to reach to their customers directly. They believe that this will allow them cut the costs and compete aggressively on price. Both model seems to work well and perhaps GEICO model works better since it has been gaining grounds and managed to take over Allstate to the second place in terms of sales. However, State Farm firmly keeps its position at the top thanks to its agents.

Which company you choose may depend on how you want to communicate with it. If you prefer dealing with an agent then it is State Farm.

This comparison of two great companies shows the choices available to you and how the best carrier for you can change depending on your personal circumstances and preferences. It is perhaps clear that it will be harder to persuade policyholder of one company to switch to another because of the different advantages offered by each one. If you prefer dealing face to face with a local agent or like the idea that you could drop into his office whenever you need you will not switch. But if you are price oriented and Internet savvy you may care less about it.

Remember that there are many other great insurers as well in your area. Why not find out who they are by entering the details above and see what would their quotes be. This is the easiest way to save money on premiums and the best way of doing it is online.

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