State Farm Homeowners Insurance Review of 2023
Homeowners insurance is a must-have for anyone who owns a home and is mandated by lenders. It's essential for every homeowner to have sufficient coverage to rebuild their home if needed, replace their personal belongings, and even safeguard against personal liability should someone get injured while on their property.
At PropertyNest, we understand that finding the right homeowners insurance company and policy can be daunting and time-consuming, mainly because of the many factors to consider, such as the insurance company's financial standing. That's why we highly recommend State Farm, one of the oldest and most reputable insurance firms in the United States. They're known for taking care of their customers.
In our comprehensive review of State Farm's homeowners insurance, we provide an in-depth overview of the firm's history, its homeowners insurance coverage, and how it stacks up against other firms. We'll also present the advantages and disadvantages of choosing State Farm as your homeowners insurance carrier.
State Farm Homeowners Insurance Pros & Cons
- State Farm is one of the least expensive homeowners insurance carriers in the country, with costs well below the national average.
- State Farm receives excellent ratings for customer service and has received fewer complaints than expected for a company of its size.
- The company has received top ratings for its financial strength and claims-paying ability.
- There are many available endorsements and add-ons to customize your policy.
- State Farm has a well-reviewed mobile app.
- The company will augment your dwelling coverage by 10% at no additional cost.
- State Farm offers only three discounts on homeowners insurance which is low compared to what other carriers offer.
- Telephone support is available only during business hours.
- Quotes must be obtained through an agent and are not available online.
- State Farm doesn’t facilitate flood claims through FEMA and some other carriers do.
About State Farm Company
State Farm was established by a retired farmer named George J. Mecherle in 1922 and has grown into one of the most respected property & casualty insurance companies in the United States.
The company’s original purpose was to provide affordable car insurance to farmers in Illinois, where the company was founded.
Today, State Farm offers a variety of insurance coverages, including homeowners insurance available in all 50 states.
After its founding, the company expanded rapidly, outgrowing its offices three times before 1929; as of 2017, State Farm had 70,000 employees and 19,000 agents and is part of the Fortune 500.
As it has grown, State Farm prioritized its employees' comfort and introduced “posture chairs” back in 1935.
State Farm has a mission, which is “to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams.”
The company’s popular jingle, written by Barry Manilow, sums up its governing principles: Like a good neighbor, State Farm is there.
State Farm Financial and Ratings
Financial and customer service ratings are one of several ways to evaluate an insurance company to make sure that it is a good choice for your coverage.
At PropertyNest, we always review financial ratings because they serve as a barometer of a company's financial strength, stability, and claims-paying ability, all of which help policyholders evaluate their choices.
A high financial rating is typically an indication that claims will be investigated and paid quickly without complications, and it provides peace of mind that the company will not go out of business.
Customer service ratings are equally as useful when evaluating insurance companies since filing a claim can be stressful, and it’s essential to be able to get help with questions or follow up on a claim.
State Farm has received excellent financial and customer service ratings, as follows:
|J.D. Power (out of 1,000)||829|
|A.M. Best - Financial Strength Rating||A++|
|NAIC Complaint Index||1.77|
A.M. Best and S&P Global ratings show that State Farm is a strong and financially stable company.
The other three ratings are also strong and prove that State Farm has excellent customer service with a lower-than-average volume of customer complaints compared to other homeowners insurance companies.
We wouldn’t suggest basing your selection of a homeowners company only on its ratings, but we wouldn’t recommend buying coverage with a company with low ratings.
Homeowners Insurance Overview
Buying homeowners insurance is not a legal requirement in any state, but all lenders require it because it protects your home, which serves as collateral for your mortgage.
Homeowners insurance protects an array of events and circumstances that might damage or destroy your home or belongings.
We recommend buying enough coverage to pay to rebuild your home entirely and to replace your belongings, plus coverage for your personal liability.
Policies & Coverage
If you buy your homeowners insurance policy with State Farm, you’ll get the following coverages and protections with a standard policy.
- Dwelling coverage protects the structure of your home, including your roof, foundation, and windows, from damage by any covered event, including fire, severe weather, and theft.
- Other structures coverage protects any other buildings or structures on your property, including detached garages, fences, sheds, or outbuildings.
- Personal property coverage protects your personal belongings inside the home, including clothing, furniture, and electronics by providing the money to repair or replace them.
- Personal liability coverage protects you if a person or their property is injured or damaged while on your property and includes coverage for some legal expenses.
- Guest medical coverage pays for a portion of medical bills if a guest is injured in your home.
- Additional living expenses coverage pays for you and your family to stay somewhere else if your home is uninhabitable due to covered damage.
In addition to the above standard coverages, State Farm offers an array of add-on coverages and endorsements that you can use to personalize your homeowners insurance policy.
- Increased dwelling coverage to extend your replacement coverage up to 20%.
- Sewer or drain backup
- Earthquake coverage
- Identity fraud, cyber extortion, and cyberattacks
- Home rental coverage if you rent out your home more than 30 nights per year
- Replacement of outdated furnaces, air conditioners, or water heaters with energy-efficient models
- Breakdown of home systems, including HVAC and plumbing
- Additional liability coverage for libel, slander, and personal injury
- Additional liability coverage for in-home child or adult care or for nurses
- Service line coverage to pay for damage caused by faulty underground utility lines
- Incidental business coverage if you work from home
- Reimbursement for costs related to zoning laws or building codes
- Coverage for homes under construction, including liability in a temporary home and theft of construction materials
- Liability for damage to someone else’s property due to a waterbed
- Coverage for your portion of losses that affect members of your homeowners association
Each of these add-on coverages comes at a cost except the first one, which State Farm will add to your policy at no cost.
If you live near the water, you should purchase flood insurance through the National Flood Insurance Program (NFIP.)
Make sure to talk to your agent to understand the costs and limits before you add any additional coverage to your policy.
The limits of your homeowners insurance coverage are typically determined by the replacement cost of your home.
State Farm does not place any cap on the limits of a homeowners insurance policy, instead leaving it up to the homeowner to decide how much coverage they need.
As a rule, we suggest having a limit that’s twice the replacement cost of your home, which should provide enough protection to cover your home, other structures, and personal belongings, not including liability or guest medical coverage.
Keep in mind that riders with additional coverage will have individual limits that will add to the overall value of your policy.
State Farm offers three homeowners insurance discounts, including two accessible to most homeowners, regardless of where they live.
- Policy bundling. According to State Farm, homeowners can save up to $1,127 per year if they purchase both homeowners insurance and auto insurance.
- Home security. Any homeowner with installed smoke detectors, fire alarms, burglar alarms, or a home monitoring system can qualify for this discount.
- Roofing. If your roof is built with impact-resistant materials, you can get a break on your premium.
Most homeowners should be able to take advantage of the home security discount, and the bundling discount is also easily accessible.
Many factors can impact the cost of homeowners insurance, including the size and value of your home, your location, and the value of your belongings.
State Farm is one of the most affordable homeowners insurance companies in the United States.
Based on a suburban home worth $450,000, the average cost of a State Farm homeowners insurance policy is about $111 per month or $1,333 per year.
Determining a true national average is difficult, but most estimates place the average cost of homeowners insurance between $1,500 and $1,800 per year, which puts State Farm below the average.
Keep in mind that adding coverage will also increase your cost.
One of the best things about State Farm is how easy it is to file a claim, which you can do online, on their free mobile app, or by telephone.
They have a toll-free number if you want to file your claim by phone.
Before you file a claim using any of these methods, you will need to gather relevant information to ensure a smooth process.
- The time and date the incident occurred
- The nature of the property involved in the claim
- The location where the incident occurred
- The cause of the damage
- Details of any injuries
- Your contact information
After you submit your claim, you’ll receive a claim number that you should have handy when you check the status of your claim.
You can use their online customer portal or mobile app to track the status of your claim 24/7 or call the company or your agent during business hours.
Customer Service Options & Availability
Customer service is one of the most important things to evaluate before you buy a homeowners insurance policy because it will inform you how easy it is to file a claim or get help with your policy.
State Farm has four customer service channels for policyholders to use.
State Farm has two customer support phone lines that policyholders can use to get the help they need.
Phone support is not available 24/7, so you should keep that in mind.
State Farm’s website is extremely useful and provides an array of support options on its customer care page, as follows:
- Frequently Asked Questions
- Written resources
- Self-support options, including password reset
There is also a tool to help you find a licensed State Farm agent if you need one.
State Farm has a free mobile app from their website, Google Play, or Apple Store.
You can get support for using the app, access the resource page, or call the tech support number to get help.
As we noted above, State Farm has over 19,000 agents that it relies on to support policyholders with questions about claims and coverage; you can call your agent for assistance if you prefer the personal approach or can’t contact State Farm directly.
It is important to note that State Farm’s agents are typically only available during business hours, so the best way to get support off-hours is to look online or use the mobile app.
How Does State Farm Compare with Other Insurance Companies?
A stand-alone review can make it difficult to evaluate your options because you can’t tell what other companies offer in comparison.
Here’s our breakdown of how State Farm homeowners insurance compares with the coverage from two top competitors, Liberty Mutual and Allstate.
State Farm vs. Liberty Mutual
- Available in 50 states & Washington, D.C.
- Quote access: Online or by phone
State Farm and Liberty Mutual are large and well-established insurance companies with strong financial ratings and good customer support. Still, State Farm has a slight edge in its financial ratings, while Liberty Mutual does slightly better with customer support ratings.
Both State Farm and Liberty Mutual offer homeowners insurance in all 50 states.
Liberty Mutual beats State Farm handily when it comes to discounts on homeowners insurance, offering a total of 10 discounts compared to State Farm’s three.
As we mentioned above, both companies have excellent customer support. However, Liberty Mutual has fewer complaints than State Farm–although we should note that State Farm still receives far fewer complaints than the average company.
State Farm offers more policy add-ons, with 11 compared to Liberty Mutual’s six.
The average cost of insurance is another area where State Farm comes out on top; their average cost is $110 per month compared to $130 for Liberty Mutual.
Both companies have useful and user-friendly websites with an array of resources and options. Still, Liberty Mutual has the edge because they provide quotes online, and State Farm requires customers to contact an agent for a full quote.
Read a full Liberty Mutual home insurance review.
|J.D. Power (out of 1,000)||805|
|A.M. Best - Financial Strength Rating||A|
|NAIC Complaint Index||2.37|
State Farm vs. Allstate
- Available in 50 states & Washington, D.C.
- Quote access: Online & by phone
Allstate is another well-known insurance carrier that provides homeowners insurance in all 50 states, like State Farm.
State Farm and Allstate have comparable and excellent financial ratings. Still, State Farm has a big advantage in customer service, while Allstate receives more than the average number of complaints for a company of its size.
Allstate offers eight discounts on homeowners insurance compared to State Farm’s three, and they include some unique discounts such as a welcome discount for new customers and a discount for people buying their first home.
One of the places where Allstate beats State Farm is the accessibility of customer support because it provides 24/7 phone support.
Both State Farm and Allstate offer a wide array of add-ons and endorsements, but State Farm has a slight edge.
Allstate will work with the NFIP to help you buy flood insurance and facilitate your flood insurance claim if you have one.
The cost of homeowners insurance is higher with Allstate than with State Farm, with Allstate’s monthly average coming in at $181, which puts it well above the national average.
Allstate and State Farm work with agents; you can begin the quote process online with Allstate but may need to call an agent to finalize your quote and purchase coverage.
Read a full Allstate homeowners insurance review.
|J.D. Power (out of 1,000)||815|
|A.M. Best - Financial Strength Rating||A+|
|NAIC Complaint Index||2.05|
Summary and Conclusion
State Farm is a safe bet for homeowners insurance, with a long history of excellent customer support and claims payment.
Across the board, they have received excellent ratings for both financial strength and customer service, with fewer customer complaints than most other carriers.
The one downside of State Farm’s customer service is that phone support is only available during business hours; we wish they would add 24/7 phone support.
State Farm has one of the lowest average costs for homeowners insurance, coming in between 12% and 25% lower than the national average.
Another area where State Farm excels is in the variety and flexibility of its coverage, with 15 add-ons available to help homeowners customize their policies.
We love State Farm’s mobile app, which is simple to use and makes it easy to file claims and follow up on their status.
On the whole, State Farm is a good homeowners insurance company and ideal for homeowners who want to customize their coverage.
Any time you shop for insurance, we suggest getting a minimum of three quotes from different carriers and comparing costs and coverage before you buy a policy, and make sure to take advantage of any available discounts.