Farmers Insurance vs. Liberty Mutual Insurance
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UPDATED: Sep 9, 2019
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According to a study performed in 2010 by AAA, the costs to own a car have risen by almost 5 percent over 2009. The rise is attributed to escalating insurance, fuel and tire costs. The average cost of car insurance alone has risen by 5.7 percent.
Expensive car insurance can make up a large portion of the overall cost to own a car, and even though motorists can go with the minimum liability insurance to keep costs down, a study by the National Association of Insurance Commissioners shows that over 70 percent of drivers purchase comprehensive and collision insurance along with the required liability coverage.
It is important to understand what each insurance company offers, shop around and be aggressive about policy discounts to keep overall costs from eating up too much of the family budget.
Farmers Insurance Group and Liberty Mutual are two of the insurance companies worth investigating in the quest for quality car insurance and lower rates.
Farmers Insurance Background
Farmers Insurance began back in 1928, with two men sharing a dream of bringing quality insurance to consumers at reasonable prices.
The first customers were rural farmers and ranchers needing insurance for their farm and other vehicles. The company was known originally as the Farmers Automobile Inter-insurance Exchange, and was based in Los Angeles, California.
Today, the Farmers Insurance Group of companies hails as the third-largest insurance company in the nation providing both personal auto and homeowners insurance, along with a wide variety of other financial services and insurance products.
With over 20,000 employees, Farmers operates in 41 states through independent and exclusive agents to service over 15 million customers.
Liberty Mutual’s History
Liberty Mutual has established itself as an insurance company working on the behalf of its policyholders to help consumers find the right auto insurance to fit their needs. The company began as the Massachusetts Employees Insurance Association and opened its doors in 1912.
The company issued its first insurance policy two years later, in 1914 and over six decades later, in the 1970s, Liberty Mutual had written policies surpassing the $2 billion mark for premiums.
Since Liberty is a mutual company, its policyholders are also owners of the company, and the insurance company operates for the benefit of its policyholders today as it has done since its inception.
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Premiums for auto insurance depend on a wide variety of factors, including the type of car driven, the amount of mile driven per year, the state a person lives in; any violations on an individual’s driving history, and how many years the person has been driving.
The Department of Insurance for the state of California has performed a survey of car insurance companies to help consumers compare one company against another.
An analysis was run for both Farmers and Liberty Mutual, based on a 40-year-old male, driving a Honda Accord 10,000 miles or less per year, with a clean driving record, living in California.
The results of the comparison between Farmers Insurance and Liberty Mutual’s were very close. Farmers insurance rates were estimated at $1,304 per year, while, for the same scenario, the estimated insurance costs for a policy with Liberty Mutual were $1,346. Incidentally, California’s overall average insurance rate is $1,190 for 2011, and the average insurance rate nationwide for 2011 is $1,442.
Farmers Insurance offers a website providing customers the ability to educate themselves on how to plan for different life events, understand the different products available from Farmers, and take care of auto insurance claims.
From the minute a claim is filed online, the handling process during a claim and the finalization can all take place via the website.
Additionally, accounts and policies can easily be managed online and Farmers Insurance offers fast quotes, available in minutes with no obligation on its website as well.
Liberty Mutual has a well-developed online presence, with a website providing easy access to an insurance estimator, information on auto insurance discounts, and savings on auto insurance rates by state.
The website also allows customers to manage claims online as well as reporting new claims. The website provides a local agent phone number or the main number for consumer assistance.
According to the JD Power and Associates 2010 survey of auto insurance companies, Liberty Mutual received a three-star rating for excellent customer service, partly for the ease of contacting the insurer.
Farmers Insurance can provide insurance coverage to consumers to cover all areas of their lives. Their available products range from auto and home coverage to life insurance, business insurance, recreational insurance covering boats, all-terrain vehicles and other recreational vehicles, and a group of mutual funds and other financial products.
On the Farmers website, the company encourages consumers to combine products for additional discounts, and offers savings up to 25% for combining auto insurance with homeowners and life insurance policies.
The Liberty Mutual Group offers many other products besides auto insurance. The company also offers personal liability, homeowners and valuable possessions insurance.
Additionally, life and annuity insurance products are available through the company’s subsidiary, Liberty Life Insurance Company of Boston.
Liberty Mutual has relationships with credit unions, alumni and professional groups and employers, providing them thousands of relationships, which help bring the company’s products to consumers.
Liberty Mutual also has an international and commercial division to meet the needs of businesses and individuals in 14 different countries across the globe.
Which is Car Insurance Company is Better?
Both Farmers Insurance and Liberty Mutual compare favorably in terms of financial stability, and according to A.M. Best ratings and analysis, both Farmers Insurance Group and Liberty Mutual Insurance have received an A, or “excellent” rating for financial strength.
The estimated cost of car insurance mentioned earlier for Liberty Mutual was slightly higher than for Farmers insurance.
Liberty Mutual and Farmers both have a portfolio of other insurance products, which benefits auto insurance shoppers, as they can combine different types of insurance products to receive multiple discounts.
Both companies represent the strength of some of the nation’s top auto insurers. Each has its unique benefits, and due to different methods used by each company to calculate auto insurance and the different characteristics of each person’s insurance situation, it is worth consulting both companies for competitive quotes before making an insurance-buying decision.