State Farm vs. Progressive Auto Insurance
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UPDATED: Apr 1, 2019
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State Farm and Progressive are two of the largest and most-advertised car insurance providers in the U.S.
If you’re in the market for a new auto insurance policy, or thinking about changing from your current provider, then you might want to research both of these companies to see if either one would be a good fit for your needs.
Find instant quotes from State Farm, Progressive, and dozens of other auto insurance providers by putting your ZIP code in the FREE box provided on this page!
State Farm Insurance has been the largest auto insurer in the United States since 1942! Today, State Farm provides auto coverage for 20% of all the cars on the road. State Farm’s network of local offices across the U.S. and Canada employ more than 18,000 agents who support the needs of some 80 million individual insurance policies.
From its beginning in 1937, Progressive Insurance was ahead of its time. Progressive piloted the first drive-in claims services and was the first auto insurance carrier to introduce lower rates for lower risk drivers.
Progressive has also been a more recent innovator, forever changing the landscape of insurance shopping by introducing online comparison shopping.
By the Numbers
According to reports published in May of 2012 by the Association of Independent Insurance Agents in Focus Magazine, State Farm has the largest share of the auto insurance market at 18.6%.
This staggering number represents $30 billion in direct premium business, as State Farm insures nearly one in five automobiles on the road in the U.S. today.
Number two in market share is insurance giant Allstate, which accounts for more than $17 billion dollars in direct premium business and a 10.5% share of the American auto insurance market.
In third place is Geico, short for Government Employees Insurance Company, with an 8.2% market share.
In fourth place, and moving quickly up the ladder, is Progressive. Progressive now enjoys a 7.7% share of the U.S. auto insurance market, owing in large measure to its very aggressive television advertising campaign and strong Internet presence.
Battle of the Ad Slogans
State Farm has long used institutional value-added marketing programs to sell its products through mass media ad placements. “Like a good neighbor, State Farm is there,” has been an effective slogan for the company since its introduction in 1971.
As competition in the auto insurance market has heated up in recent years, State Farm has started to sound more like its competitors, touting discounts and comparison pricing, according to Advertising Age Magazine.
In 2010, State Farm was a distant third in ad dollars spent.
To maintain its number three overall market share rating, Geico spent almost twice what State Farm did to attract new customers in 2010. By the same token, number four Progressive outspent State Farm by at least 40%.
Even Allstate, with little more than half the policy volume of State Farm, spent an equal amount of advertising dollars just to maintain its market position.
By this time, pretty much everyone in America should be well acquainted with Flo the cashier, the insurance-loving character that has been featured in more than 60 different television commercials and whose visage is prominently displayed in print and online ads for Progressive.
Progressive rate comparisons don’t always show the company as having the lowest rate, but the company touts terrific customer service and large discount opportunities using Progressive’s new Snapshot device, designed to measure a policyholder’s mileage and other driving habits.
Both State Farm and Progressive now offer discounts from 5% all the way up to 50% for policyholders who drive less. Policyholders are required to verify their mileage along with other driving data, which is then sent directly to the insuring company for analysis. This is called pay-as-you-go coverage.
As mentioned above, Progressive uses its new plug-in Snapshot device, while State Farm has authorized the use of several third-party vendor services and their installed devices to accomplish this task.
Vendors include the OnStar system and In-Drive. Still, Progressive is considered to be the industry innovator with its Snapshot program, which makes use of telematics technology.
The patented Progressive device fits snugly into an automobile’s OBD (on-board diagnostic port). This port is now industry-standard equipment that is a part of most every new automobile on the road today.
Progressive uses the unique Snapshot device to not only monitor your mileage, but to determine how well you drive your car.
In addition to mileage data, the Snapshot device is in constant contact with the Progressive home office, letting them know how hard you brake your vehicle and how often you’re on the road between the hours of midnight and 4 a.m.
The bottom line is, the better you drive, the more you’ll save with Progressive Auto Insurance. The safest drivers will save as much as 30% off standard policy rates. Snapshot does protect your privacy by not tracking your location or letting Progressive know if you’re speeding.
The company will let you know, however, if the device is unplugged or not functioning properly.
State Farm Drive Safe and Save
New State Farm ads claim that auto insurance customers can potentially save as much as 50% on their auto policy premiums by enrolling in the company’s Drive Safe and Save program. The potential savings are big, according to AOL Daily Finance.
In some states, such as California, State Farm’s new program only requires motorists to report their mileage to the insurance company. In other states, drivers must enroll in an existing monitoring program such as OnStar.
Enrollment requirements and potential discounts vary from state to state.
Currently, Drive Safe and Save is available in 14 states. It’s just a matter of time before State Farm is able to roll out the program across the country. Drivers receive an immediate benefit; a 5% discount just for enrolling in the program. Additional discounts will vary depending on the motorist’s actual mileage driven and other monitored factors.
State Farm added 9 of the 14 new Drive Safe and Save states in the spring of 2012. State Farm now services Florida, the fourth largest state in the U.S. by population, according to reports in the Florida Sun Sentinel.
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Where it counts the most, State Farm and Progressive both draw high marks for their customer service according to surveys conducted by the international marketing firm J.D. Power and Associates.
The J.D. Power study for 2012 found State Farm in the number seven position, dropping a single spot over the J.D. Power 2011 sixth place ranking.
Progressive Insurance, however, dropped all the way from 12th place in the 2011 rankings to 22nd place out of the 24 companies that were rated by the J.D. Power group in May of 2012.
In both survey years, State Farm scored above the national average for auto insurance providers, while Progressive slipped almost to the bottom of the list. State Farm was rated highly for its efficient nationwide system of offices and agents.
State Farm also received a four circle rating for its policy offerings, but was not rated at all in the call center or website categories.
On the other hand, Progressive received J.D. Power’s highest five circle rating for its website and a four circle rating for its call center representatives. Progressive received low marks for its policy offerings, with three circles, and just two circles out of five for its local agents and pricing.
The Battle of the Websites
More than half of insurance shoppers start shopping for a new policy online and a full 75% of car insurance shoppers now use the Internet to visit at least one insurance provider’s website before making a final decision on which policy to purchase.
The fact that the Progressive website is considered one of the best insurance sites on the Internet certainly gives the company an edge for attracting younger computer-savvy comparison shoppers.
While only 25% of consumers were looking for a new insurance policy this past year, 43% of this group decided to go with a new insurance provider.
This past year, J.D. Power conducted a new survey, rating and ranking auto insurance providers by their websites. The study concluded that 34% of consumers now prefer to buy their car insurance policies online.
Companies that did well in the 2012 website evaluation study included Allstate, Esurance, Geico, and Travelers.
In this survey, both Progressive and State Farm were also-rans. Their websites were evaluated and came up short of the leaders listed above.
The Jury Is Still out
Whether any auto insurance company can eventually make a run on long-time industry leader State Farm is anyone’s guess.
However, what we can be sure of is that the marketplace is changing. Consumers are far more willing than ever before to forgo the traditional system of using local offices and agents for the convenience of online shopping from the comfort of their homes.
While Progressive is a long way away from catching State Farm–7.7% market share versus 18.6%–Progressive is certainly within reach of the second and third largest companies, Allstate and Geico.
They are all budgeting advertising dollars like there is no tomorrow, hoping to earn an extra slice of the revenue that State Farm has long enjoyed.
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