Esurance vs Farmers Auto Insurance
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UPDATED: Aug 14, 2019
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Esurance and Farmers Auto Insurance are two of the larger auto insurance companies in the United States. They both offer various auto insurance products, although their methods of business are very different.
Read below for a comparison of these two auto insurance companies to help you compare not only their pricing and policy offering structures, but the methods each employ to deal with their customers.
Esurance Auto Insurance History
The Esurance Auto Insurance Company began in 1998 with an idea of focusing on the exploding “dot.com” method of doing business in other industries. Esurance founders believed that auto insurance could be made cheaper and easier to purchase and manage by selling in an almost exclusively online venue.
The idea was soon noticed by a larger company, the White Mountains Insurance Group, which purchased the rights to Esurance in 2000, one year after the company began offering its auto insurance products.
Esurance is a direct subsidiary of White Mountains, and writes approximately $781 million worth of insurance each year, primarily through its direct quote website services and was recently purchased by Allstate in early 2011.
Esurance currently employs 1700 people at its San Francisco headquarters and other locations priding itself on its pop-culture, flashy television advertising, and its environmentally-conscious “no paper” way of doing business.
Its television advertising campaigns most notably featured a series of cartoon character spots with “Erin Esurance,” a pink-haired superhero, as the lead. The character was designed by the company’s public relations director and focused on a young, internet-savvy market.
Esurance has often reaffirmed its dedication to reducing paper use by focusing on primarily online and telephone interactions with its customers.
Famers Auto Insurance History
Farmers Insurance began in 1928 in California as an auto insurance provider for the “new West.” Surviving the first years of upheavals in the insurance market by focusing on creating “reciprocal” companies, which are similar to limited liability companies, as opposed to mutual companies.
The company continued to grow steadily throughout the Depression, and by 1988 was acquired by the larger BATUS Corporation, which allowed the company to expand exponentially.
Ten years later, the company was acquired by Zurich Financial Services, which still owns it.
Farmers Insurance is the third-largest overall insurer in the United States. The company’s headquarters are in Los Angeles, California, and it employs close to 26,000 people worldwide. Farmer’s net income for 2007 was $2.14 billion.
The company writes a variety of insurance policy types, including life, automobile and homeowners.
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Esurance Customer Satisfaction Review
The Esurance experiment with online-only insurance format has not been a huge success from a customer service perspective. J. D. Power and Associates, the country’s leading automobile insurance rating entity, gave Esurance relatively low ratings in all categories dealing with customer satisfaction.
Esurance scored only two out of five stars, or “below average,” on “Overall Customer Satisfaction,” “Billing and Payment,” and “Contacting the Insurer.” Esurance managed to score three out of five stars (average) on “Policy Offerings” and “Pricing.”
In the J. D. Power Customer Satisfaction Index, a scale which rates auto insurance companies in terms of each other, Esurance was ranked 24th out of 33 companies, with an overall rating of 763 out of a possible 1,000 points.
Esurance’s higher ratings for policy offerings and pricing probably have to do with Esurance’s flexibility in creating a policy which meets individual customer needs. Esurance’s lower customer satisfaction may come from the website itself, which is the hub of its business model.
While the website is very easy to use, it does tend to push customers into online quotes and other information, without giving many options for other-than-online interaction.
Even though Esurance’s motto is “Technology When You Want It; People When You Don’t,” the online format seems to be the preferred method for the company to interact with its customers. Many customers may find this type of interaction difficult.
Farmers Customer Satsifaction Review
Farmers customer satisfaction rating, according to the J. D. Power survey, was even lower. Farmers managed to score only two out of five stars in all categories but one; the company received three out of five stars in “Contacting the Insurer.”
Farmer’s Customer Satisfaction Index ranking was 28th out of 33, with an overall score of 760 out of 1,000 points.
Farmer’s certainly does business through its website, but this can hardly account for the dismal customer satisfaction scores, as Farmer’s does a large portion of its business through independent agents.
The company’s recent acquisitions may play a part, as the shifting from one company’s rules and ways of doing business to another’s can often cause a dip in customer satisfaction.
Which Auto Insurance Company is right for you – Esurance or Farmers?
Neither Esurance nor Farmer’s distinguishes itself with great customer service scores, but this does not mean that either company may do business well with you.
Customer satisfaction is a highly individual and subjective form of rating, so you should talk to an agent or go online to explore for yourself what these two companies have to offer.