Allstate vs State Farm - Which is the better company?

by Guest » Thu Dec 13, 2007 05:03 am

State Farm is known to employ more than 60 million individuals dedicated to provide serving millions and providing them with insurance solutions. All state has more than 70 000 professionals offering insurance solutions to millions of individuals.

The consumer's point of view

Consumers are divided in their opinion of the two companies. Some think that State Farm is the better provider while others think Allstate is. There are individuals in our community who believe that since both State Farm and Allstate are big names in the insurance industry, it is hard to compare them both.

State Farm and Allstate seems to have a tough competition between them where they have almost equal votes in their favor. Both State Farm and Allstate share the same amount of criticism too from agents as well as consumers. Individuals have accused one of the 2 companies of denying claims for absurd reasons and the other of not paying claims again for absurd reasons.

The community has a State Farm agent putting his vote in favor of both the companies. The agent says that State Farm gives more importance to professionalism and a sense of healthy competition.

Complaints against State Farm

  • This company is accused of not being clear in their contract with the agents.
  • They have the reputation of overcharging consumers.

The fact of the matter is that, all insurance companies seem to have unhappy customers or employees. Each company has different policies and hence they may or may not suit a customer or an individual looking for employment with that organization.

Related Readings:

I am interested in opening my own auto insurance agency. Can you advise which one is better between Allstate and State Farm? thanks

Total Comments: 91

Posted: Fri Jun 12, 2009 06:22 am Post Subject:

Hi Anon,

Thanks for the reply, buddy :D

If you don't perform according to expectations, they could choose not to convert it to a permanent contract.

Okay, I think that makes sense.

What's the target they have set for you anyway? Since you are starting from scratch, are you experiencing any problem in getting business?

Apart from the assistance from State Farm what are your out-of-pocket expenses in running the agency?

Posted: Sun Jun 14, 2009 04:37 pm Post Subject:


The production targets vary based on market & the business plan that I presented to them. They are not unreasonable, but requires you to start producing immediately(meaning "get yourself out there now, no slow ramp up or apprenticeship").

However, the production targets are secondary. The primary focus for SF is that you are running the business in a well organized and ethical manner, that shows potential for sustained growth. There have been a number of agents that produced adequate numbers, but they didn't have their contract converted to permanant because they producing those numbers in a way that SF did not approve of. However unfortunate this may have seemed to these agents, SF has a brand & image they need to protect.

The loans are the agent's responsibility, regardless of success or failure. The agent is not required to take the loans, it is up to them. The loans are usually used for office equipment & furniture. If the agent has the means to aquire them without these loans, they can do so. Most agents taking over an existing book, usually negotiates a pretty good deal with the outgoing agent. New market agents tend to make use of the loans more often. The $30k line of credit can be used for anything, but it is up to the agent to manage it wisely.

Posted: Sun Jun 14, 2009 04:48 pm Post Subject:

Hi Simon,

I have not yet completed my training, so have not begun producing. In my response to Steve above, I have addressed the targets.

As far as out of pocket expenses, I know agents that had no or very minimal out of pocket, and I know agents that put alot of money into the office and marketing. It is really up to the agent, and what he/she wants their business to look like. The most significant out-of-pocket expense is usually the lack of pay until the business becomes profitable. Most agents rely on their spouse for household income until the agency stabilizes.

Posted: Sun Jun 14, 2009 06:33 pm Post Subject:

Insurance, like any other business can be a challenge to evaluate startup costs. In fact, it's sort of a catch-22 situation. You can try and pull off a shoestring startup in which you barely spend any money on marketing and office equipment, or you can borrow the money and put more money into marketing.

What can be difficult to evaluate is whether you will reach profitability quicker by sinking in the extra money, or if you will become profitable by operating on an extremely low budget. I would caution that if you are going to have clients coming into your office, you want to make sure it has a professional image. The last thing a client wants to see is office furniture that came from their neighbor's yard sale!

I agree that it is very easy to run numbers and project sales figures and say this is how many blah blah blah...but these figures are easier said than done. If you place the focus on doing the right thing for each and every customer, then you will reach success! Good luck!

Posted: Mon Jun 15, 2009 08:47 am Post Subject:

The $30k line of credit can be used for anything, but it is up to the agent to manage it wisely.

Do you know any module which shows how such line of credit could be managed effectively?

Posted: Wed Jun 17, 2009 02:45 am Post Subject:

I'm not sure what you mean by "module", but essentially it is like a HELOC or credit card that you take cash advances from. But the rate is definately more favorable. So you can borrow from it, and pay it back as you need. Idealy you may use it to pay expenses that you don't have the cash to cover(paychecks, rent, utilities...). Then you would pay it off when you get your commission check. So you would have the line open if you ever need the access to cash.

Posted: Wed Jun 17, 2009 09:41 am Post Subject:


As far as out of pocket expenses, I know agents that had no or very minimal out of pocket, and I know agents that put alot of money into the office and marketing.

Okay, I’m kind of curious to find out if the agents who take care in spending on marketing would attain more success than ones who wouldn’t.

Posted: Mon Aug 17, 2009 12:56 pm Post Subject: allstate and state farm

Allstate and state farm are both big companies. It is very hard to compare them and choose the one best. But i think state farm is good for me.

Posted: Tue Aug 18, 2009 10:21 am Post Subject:

But i think state farm is good for me.

Now, would you tell us your reasons for picking State Farm?

A carrier with a smooth settlement process would always be my first choice. I'd always try to go through a carrier's settlement history before enrolling with them.

Posted: Sat Sep 19, 2009 01:27 am Post Subject: Answer

I think they both have good insurance rates, but Statefarm will pay quicker for an accident/bodily injury. :twisted:

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