Geico vs. State Farm Auto Insurance
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UPDATED: Apr 1, 2019
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When it comes to auto insurance would you rather give your business to a talking gecko or a good neighbor? That’s the choice, at least from a marketing standpoint, between Geico and State Farm.
Both of their marketing campaigns are so widespread that we’re probably all familiar with two of the nation’s most popular car insurance companies.
If you’ll enter your ZIP code into our FREE search tool right now you’ll see you have more choices than just Geico and State Farm!
As nationally known auto insurance companies, both Geico and State Farm combine to service drivers in all 50 states. But is there any measurable way to determine whether or not one of these companies is better than the other?
Probably not. But we can tell you some interesting things about each one.
According to the company history as told on the Geico website, the company got its start back in 1936 at the height of the Great Depression. Husband and wife team Leo and Lillian Goodwin had a vision to provide auto insurance to federal employees and military families.
Leo Goodwin had quite a bit of experience in the insurance industry, having gotten his start in Texas. By the time he and his wife were ready to start their own company, originally known as Government Employees Insurance Company, Leo had already established a solid business plan that all but ensured his success.
Today, Geico has grown into one of the nation’s insurance giants, offering auto, homeowner’s, life insurance, and more in all 50 states and Washington, DC.
You can buy their products directly from them or through licensed agents in your local area.
State Farm Insurance
State Farm is another old and well-established insurance company, dating back to 1922. Like Geico, it was originally created to provide auto insurance to a select group of people rather than all drivers in general. In this case, the demographic was America’s farmers, who had special needs for their vehicles and equipment.
According to the company’s LinkedIn page, State Farm now handles more than 81 million insurance policies and bank accounts in the United States and Canada. The company claims to be America’s largest car insurance company and Canada’s largest insurer overall. They further claim that they cover one in five American drivers.
Policy Offerings and Pricing
If you’re looking simply for liability auto insurance, you’ll find that the products offered by Geico and State Farm will most likely be very similar in your state. This is primarily due to the fact that most states have minimum liability amounts required by law, which will be identical for every basic insurance policy.
If you want more than minimal liability, including collision and comprehensive, you’ll obviously have to compare the details of similar policies along with their prices.
According to a 2010 report from Consumer Reports magazine Geico was slightly less expensive than State Farm when researchers inquired using identical car and driver information.
That’s not to say that’s always the case, but State Farm does tend to be, on average, slightly more expensive than most of their competition. Only the consumer can decide whether or not the policies and customer service provided are worth the extra cost.
Due to the fact that more and more Americans are conducting their car insurance transactions online, it is becoming more important for auto insurance companies to really invest in that portion of their business. Progressive Insurance was the first major insurance company to delve into the world of online business more than 20 years ago.
Everyone else pretty much followed suit.
In order to track customer satisfaction with the online insurance experience, nationally known market research company J.D. Power and Associates conducts an annual survey. Their survey takes into account customer satisfaction with a website’s usability, functionality, and dependability.
The results of J.D. Power’s most recent website satisfaction survey were released this past May. They show that Geico did very well despite the industry as a whole not receiving good grades among online shoppers.
As a matter of fact, the survey also showed that Americans are less likely to attempt to purchase car insurance online a second time if their first experience was not satisfactory. That just shows how important it is for car insurance companies to make sure their websites are up to par.
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In addition to their website satisfaction survey, J.D. Power and Associates also conducts several other types of customer satisfaction surveys. Those surveys consider things like claims service, general customer service, and policy offerings.
Their latest surveys show State Farm being rated a 4 out of 5 for claims service. Geico is rated a 3 out of 5. Customer satisfaction for claims service considers things like interaction with service personnel, appraisals, the consumer’s experience with rental vehicles, the quality of the repair process, and so on.
When the J.D. Power researchers combined all the results from the numerous studies, they rated each of America’s car insurance companies with an overall customer satisfaction rating. Both Geico and State Farm ended up with a 4 out of 5 rating for 2012.
Customer Satisfaction and Shopping
When you’re shopping for a new auto insurance policy, it’s a good idea to take into account customer satisfaction surveys like the ones provided by J.D. Power and Associates.
Insurance companies trust the results of those studies, especially when they are conducted by reputable research groups, and use the results to improve their businesses.
Rest assured that both Geico and State Farm were likely made aware of how they scored in the various research surveys for 2012. In all likelihood, they are addressing their weaknesses in an attempt to make sure their customers are more satisfied heading into the next year than they were this year.
To that end, customer satisfaction surveys are very useful.
On the other hand, there are plenty of insurance survey websites that don’t conduct scientific research in any way, shape, or form. Instead, they simply provide a blank slate to allow customers to rate their insurance companies and leave comments. The problem with the results from these sorts of sites is that they typically don’t paint an accurate picture.
For example, those who set up such sites don’t ask specific questions based on established research techniques. Second, they sample such a small cross-section of American drivers that it’s hard to draw any reliable statistical conclusions.
Third, because the sites depend on drivers finding and using them, most of what you read is negative.
Generic car insurance survey sites can be useful to a certain extent. But take the information gleaned from them with a grain of salt.
Remember that if Geico and State Farm combine to receive a few hundred comments on a website, that’s a small number in comparison to the tens of millions of drivers they insure.
In the End It’s up to You
On the question of Geico vs. State Farm Insurance, you ultimately get to decide which of the two you prefer. That’s the beauty of the quote system and comparative shopping. You get to solicit quotes from multiple companies and then compare what they’re offering side-by-side. That’s the best way to find a great price.
But beyond simply comparing quotes, you also have the opportunity to interact with customer service. You get to experience first-hand whether or not the insurance company truly puts its customers first. And, if you don’t like the service you’re getting, you can always switch to a competitor at any time.
As for Geico and State Farm, the fact that they are among the top five auto insurance companies in the nation demonstrates they must be doing something right in terms of customer satisfaction. Both are clearly committed to offering quality insurance products at reasonable prices.
If you’ve already got auto insurance through one of the two, you might consider bundling the rest of your policies with them as well. Bundling is a great way to save a little bit of money on insurance products that you are likely to keep long-term.
Though State Farm’s product list might offer a few things Geico doesn’t, for the average consumer both companies have all the insurance needed.
Before we finish up here, we want to remind you to re-evaluate your auto insurance at least once a year. The best time to do this is just before your renewal period.
Yet, regardless of when you do it, re-evaluating your car insurance is the only way for you to know that you’re still getting the best deal.
Re-evaluation is especially important if you’ve been with the same car insurance company for years. Satisfaction with your car insurance company tends to promote an attitude of general acceptance, whereby consumers just assume they’re always getting a great policy at a great price.
Unfortunately, that’s not always true. As good as your insurance company might be, it is possible there’s a better one out there waiting to be found. You won’t know unless you dig around and see what else is available.
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