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When it comes time to purchase insurance, two names you’re likely to encounter are Erie Insurance and State Farm. Both are large national insurance carriers with millions of policies in force. But how exactly do they compare when it comes to key factors like cost, customer service, coverage options and financial strength?
As two of the ten largest homeowners insurance companies in the country, Erie and State Farm have a lot of similarities. But there are also some key differences to understand as you evaluate which provider is the right fit for protecting your property. Let’s dive into the details and see how Erie and State Farm stack up across several categories.
Cost of Coverage
One of the most important considerations for any insurance purchase is cost. Erie and State Farm both offer competitive pricing, but rates can vary significantly based on your location and specific risks.
Some highlights:
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For standard homeowners insurance, State Farm generally offers slightly lower premiums than Erie on a national level. But in certain states like Pennsylvania, Illinois and Virginia, Erie appears to have the pricing edge.
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Erie offers a range of discounts to help reduce costs, including multi-policy, multi-home, paid in full, youthful retirement and loss free discounts.
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State Farm also provides a number of ways to save, including discounts for new homes, protective devices, retirees and Steer Clear safe driving program participation.
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Both insurers offer options like increased deductibles and removing liability protection to lower homeowners premiums Erie also provides a Budget policy.
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For specialty coverage like flood insurance and valuable items protection, State Farm usually comes in at a lower price point than Erie based on sample quotes.
The takeaway is that costs can go either way between the two companies depending on your situation It pays to get quotes from each to see who offers the best rate for your specific needs
Customer Satisfaction
How do existing customers rate Erie and State Farm’s service, claims handling and overall satisfaction? Here’s an overview:
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Both companies score well above the national average for customer satisfaction according to J.D. Power’s property claims satisfaction survey. Erie beats the average by 48 points and State Farm by 46 points.
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Erie gets high marks for local agent service, ranking #1 for regional carriers in the J.D Power 2021 U.S. Auto Insurance Study. State Farm also performs well but does not top Erie.
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For claims process and good faith, the NAIC’s complaint index shows State Farm generating more issues than Erie across most states. This suggests Erie fares better for claims handling.
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ConsumerAffairs gives Erie 3 out of 5 stars from over 300 customer reviews. State Farm earns 1.5 out of 5 stars but also has vastly more reviews, indicating its larger customer base.
Overall, customer feedback indicates Erie holds a slight edge in satisfaction, particularly when it comes to claims handling through local agents. But State Farm also performs well compared to competitors.
Coverage Options
When it comes to coverage selection, Erie and State Farm offer standard homeowners insurance coverage as well as plenty of add-ons and special endorsements. Here are some notable items:
Erie Insurance perks:
- Guaranteed replacement cost for rebuilding home
- Coverage for identity theft and financial loss
- Newer home replacement cost for 1 year
- Water backup and sump discharge/sewer coverage
- Cellphone replacement due to theft or damage
- Dwelling under construction coverage
State Farm advantages:
- Personal liability umbrella coverage add-on
- Landlord’s furnishing coverage
- Boat lift and dock coverage options
- Jewelry and other collectibles coverage
- Rideshare driver coverage add-on
- Enhanced loss settlement for roof damage
While there is overlap in commonly offered endorsements, each insurer also has some standout options worth considering when customizing your homeowners policy.
Financial Strength
In terms of long-term viability, both Erie and State Farm receive high marks for financial stability:
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A.M. Best gives Erie an “A+” (Superior) rating while State Farm earns the highest-available “A++” (Superior) rating.
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Both companies have over 90 years of experience in the insurance industry. State Farm was founded in 1922 while Erie has origins back to 1925. Their longevity demonstrates financial durability.
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As large national carriers, Erie and State Farm have millions of policies in force and tens of billions of dollars in assets indicating strong capital positions.
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Erie is structured as a reciprocal insurer with policyholder surplus while State Farm is a mutual company owned by policyholders. These models provide sustainability.
While State Farm edges out Erie just slightly for financial strength due to its “A++” rating, both undoubtedly have exceptional financial standing compared to the industry overall. This makes them low risks for insolvency.
The Bottom Line
At the end of the day, both Erie and State Farm are leading insurance providers with affordable pricing, good customer service, extensive coverage options and proven financial stability. It often comes down to subtle differences by location and individual risk profile when choosing between them.
Some key takeaways for consumers:
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Get quotes from both. There’s no universally cheaper option.
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Vet discounts and bundled pricing for potential savings.
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Consider unique coverages like identity theft and water backup.
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Go with the higher rated provider for claims process.
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Ensure you have access to knowledgeable local agents.
For most homeowners insurance shoppers, you can’t go wrong picking Erie or State Farm. But doing thorough research before you buy is key. Be sure to understand how they stack up for your situation so you can select the right fit.
Frequently Asked Questions
Does Erie or State Farm have better rates for high value homes?
For expensive, higher risk homes, State Farm generally provides lower premiums than Erie. State Farm also often offers better pricing on add-ons like personal liability umbrella coverage for more asset protection.
Which is cheapest for flood insurance, Erie or State Farm?
State Farm tends to offer lower premium flood insurance compared to Erie, including when bundled with the standard homeowners policy. But Erie does provide flood coverage as an endorsement while State Farm policies require a separate policy purchase.
Does Erie have coverage options that State Farm does not?
Erie has a few unique offerings like identity theft and cell phone replacement coverage that you cannot get from State Farm. Erie also includes certain protections like water backup coverage automatically while State Farm requires adding endorsements.
Is Erie strong financially compared to State Farm?
Both Erie and State Farm are financially sound choices, but State Farm edges out Erie slightly with an A++ (Superior) rating from A.M. Best compared to Erie’s A+ (Superior) rating. However, both far surpass industry averages in terms of financial strength.
Which is better for bundling, Erie or State Farm?
Erie frequently offers some of the lowest premiums when bundling home and auto insurance together. State Farm bundle discounts can also be competitive but are often not as large of savings as Erie’s multi-policy discounts of up to 20% off your total premium.
Does State Farm have local agents like Erie?
State Farm also utilizes local agent offices to service policies much like Erie. However, Erie is structured as a reciprocal insurer with agents owning the policyholder relationship while State Farm agents are employees. But both offer localized agent access.
For high claims risk, is Erie or State Farm a better option?
High risk homeowners with prior claims or violations may find Erie to be a better option than State Farm. Erie’s claims satisfaction ratings surpass State Farm, indicating more policyholder goodwill for higher claims activity. State Farm is known to more readily non-renew policies with major claims.
Choosing the right insurance for your home is about weighing many factors specific to your situation. Comparing providers like Erie and State Farm on cost, coverage, service and more will ensure you make the best decision.
Erie vs. State Farm: Average Rates by Gender
| Erie | State Farm | |
|---|---|---|
| Male | $158 | $164 |
| Female | $147 | $152 |
Men tend to pay more for insurance than women. This is because men are statistically more likely than women to get into an accident or be pulled over for speeding. This means that insurers have to pay more because there is more risk, so prices go up.
Women usually see rates about 7% less per month with Erie, but the difference is closer to 7% per month with State Farm.
If you look at the information for each company separately, Erie has the lowest rates for both men and women, with average premiums that are $6 less for men and $5 less for women.
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Is Erie or State Farm Better for Drivers with Spotty Records?
Its no big secret that drivers who are accident-free get better deals on their insurance. You can still save money on your monthly bill even if you have a bad credit history.
If you have tickets and accidents on your record, you’ll probably end up paying more. Which of these two companies gives drivers with spotty records the cheapest premiums?