Here is my personal story of my experience with car insurance. I hope that by sharing what I went through, it will help you make informed decisions about car insurance, save you money, and protect your family.
I had been a customer of State Farm for 33 years. My parents and grandparents had State Farm. My parents added me to their policy when I got a driver’s license. When I got out of college, I got my very own policy with State Farm. I thought I had the best insurance around. I thought that I would get special treatment. I was a sucker.
The cost of my insurance went up every year. I never made a claim in 33 years, don’t have any tickets or points on my license, and was never in an accident. I was a perfect customer. I paid my premium and never asked for anything in return other than peace of mind.
I became disillusioned with State Farm slowly over the past few years. As a car accident lawyer, I saw firsthand how they were treating their customers. For an alleged “premium” company, I saw them treat their customers like numbers. Almost every one of my clients who carried State Farm and made a claim for their injuries was frustrated. I am not talking about a small sample size either. State Farm is a huge auto insurance carrier so I see these claims daily. I cannot count how many times I had to tell people that State Farm was not being fair to them. And, most of these people were older. They had State Farm for years or even decades. They, like me, thought State Farm was on their side. But, it simply didn’t matter.
When I saw commercials from State Farm with their slogan of “Like a Good Neighbor” it made me angry because I knew it wasn’t true. In my opinion, I felt like they were misleading people based on the goodwill they had developed and that they were no longer the same company. The baby boomer generation had grown up with State Farm and trusted them. But, simply because my parents and grandparents used State Farm did not mean that I should blindly follow.
So, I decided to shop around for car insurance. I am relieved that I did. It opened my eyes to what is going on in the car insurance industry and how the insurance companies are counting on people to not shop around. This is my story of why I switched my car insurance from State Farm to Geico and how I cut my payment by over two thousand dollars a year with the exact same coverage!
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Examples of What I See State Farm Doing That Isn’t Right
To put it simply, State Farm has been giving low ball offers and only paying out when forced through a lawsuit. They run your claim through a computer and whatever that computer says to offer, they will. I see offers with crazy figures like $3,805.21. How their computer program comes up with these numbers and why they don’t round them off is baffling. Their lack of care about how the recipient of these crazy offers feel is incredibly frustrating. Talk about low emotional intelligence.
Next, if you make an uninsured motorist claim on your State Farm policy, they are forcing their clients to perform IMEs (independent medical exam) and/or EUOs (examination under oath). An IME is when you are forced to go to an examination from a doctor of their choosing. An EUO is basically a deposition where a lawyer asks you questions for hours. This is part of your insurance contract and they are legally permitted to require you to do this. But, it is such an aggressive move and other companies simply do not treat their own customers like this. It is a great example of why State Farm treats their clients like a number. Rather than giving their customer the benefit of the doubt, they are immediately in defensive mode. It seems like they are looking for reasons to avoid paying claims rather than taking care of their customers.
How they handle med pay is another reason I don’t like how they operate. Med pay pays your medical bills after an accident. Say you carry 5k in med pay and they pay that out to your doctor. When you settle your injury case, State Farm requires that 5k to be reimbursed out of your settlement. They get paid back from you. So, what’s the point in paying for a benefit that you have to reimburse?
State Farm also sues people personally on a regular basis on what is called a subrogation claim. This is a dirty little secret. A subrogation claim is when the insurance company “steps into your shoes” and can pursue a claim without your consent. Here’s how it works. You get injured in an accident. The at-fault driver has $25,000 in bodily injury coverage. You carry $100,0000 in uninsured motorist coverage. You settle your case and receive all the insurance money of $125,000. State Farm will then sue the at-fault driver personally to recover the $100,000 they paid out to you. I see it happen all the time. Now, they usually settle for less than the full amount, but they are still quietly going after a lot of people and making back the money they paid out. Didn’t know about that sneaky move, did you?
How I Shopped for My Car Insurance Policy
Shopping for car insurance was much easier than I expected. I already knew that I wanted to compare Progressive and Geico because they are stable companies and I generally have had good experiences with them during my personal injury claims.
All I had to do was to go on their websites, answer demographic questions, and provide information about my vehicle. Once I filled out the preliminary questions, I was directed to a menu that gave me options for categories of coverage and also the amounts that I wanted.
But, the menu had more options than I expected. I had to pause to make sure I understood what each type of coverage meant and whether I needed it. It had been so long since I had adjusted my coverage with State Farm, I had forgotten what all the bells and whistles were. Ultimately, I was able to reference my State Farm policy and match everything up.
I Saved Over $2,000 a Year For the Same Coverage With Geico!
My wife and I have two vehicles in our household. Neither of us have any tickets, accidents, or claims. We paid State Farm $3,150 every 6 months for the policies for a total of $6,300 a year. We simply didn’t know any better about the cost and wrote the checks.
I was shocked when I got Geico’s quote. It was $2,200 a year less for the exact same coverage! The only change was that Geico required us to to be tracked on their mobile app so they can give us a driving score. I decided that I could care less about being tracked in order to save that much money.
What Coverages I Carry:
Some coverage is required by law. But, here is a list of what I have:
- Personal Injury Protection (PIP)
- Property Damage
- Rental
- Comprehensive
- Collision
- Bodily Injury
- Uninsured Motorist
What Coverage I did Not Buy
I decided that some of the extras were not necessary. There was a roadside assistance perk that I didn’t need because my car company already provides it. I also declined Med pay because I have health insurance and I felt it was duplicative to have both.
My State Farm Insurance Agent Would Not Cancel My Policy
This situation was annoying. When I called my agent’s office and said that I wanted to cancel my policy because I had switched to Geico, the person sounded like she could care less. There was no offer to reduce my rates or even match it.
However, she said she needed proof that I was insured with Geico before my policy could be canceled. She sent me an email asking for a copy of the Dec page. I responded with a simple email stating that I wished to cancel the policy. I figured she needed something in writing. She replied that they would not cancel the policy unless they received the Dec page from Geico.
Of course, the Dec page had the price that I paid and unless I went through and redacted it, State Farm was going to be able to see what Geico was charging. Pretty tricky. But, I did not care enough to do the extra work and sent it over. State Farm then canceled the policy.
What Car Insurance Coverage Do I Recommend?
The big problem areas are rental, bodily injury, and uninsured motorists. If you don’t have all three and you are in an accident, you are rolling the dice. I recommend at least $25,000/$50,000 of both bodily injury and uninsured motorist. Your budget and assets dictate how much beyond you go for each.
I also see a lot of confusion about property damage. Property damage pays for the damage that your negligence causes in an accident. This coverage almost always is used to pay for the damage to other vehicles. I do not think there is a need for anyone to carry more than $100,000 in property damage. In almost all cases, $50,000 is plenty.
How You Can Get Good Insurance for Cheaper:
I used to think “what good is insurance if it won’t pay when you need it?” I still believe this, but it just isn’t as important these days. There are very few great companies. I have dealt with every insurance company there is. I have handled thousands of claims. Out of all of them, the only time I ever saw a company pay more simply to protect their insured was USAA. I love USAA. I wish every insurance company was more like them. I never hear my clients complain about USAA. Unfortunately, not everyone is eligible because it is only for the military or their families.
I have had a lot of positive experiences with Progressive and Geico. While not perfect, they are usually reasonable. Allstate is mid-tier. The cheap insurance companies are all complete garbage. That shouldn’t be a surprise.
My best advice is to shop for your car insurance around every 2-3 years. If an insurance rate is too good to be true, double check the company and what coverages you are getting. You do not need to cut your coverage in order to save money, all you need to do is to shop it around.
I hope my experience will help you and your family save money and maybe even be able to afford to increase your insurance coverages.
