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: Thu Nov 03, 2011 08:02 am Post Subject:

pays it's claims 100% of time

Neither Primerica nor any other insurance company pays 100% of the claims that come in the front door. And all insurance companies pay for death by suicide as required by state law (after one or two years of policy existence, depending on the state).

As a matter of fact, there is at least one legal case that I am aware of involving Primerica (in Illinois from the late-1990s) over non-payment of a death claim. A Primerica agent submitted an application for a husband and wife's insurance policy. Primerica's underwriter decided the company needed a blood and urine test on the wife, and the wife refused to schedule the test, saying she would consent to the blood test AFTER the family returned from vacation in Mexico in a few weeks.

Unfortunately, she died as the result of a vehicle collision while on vacation in Mexico. The husband filed a death claim, which was denied. The court dismissed the suit on motion for "summary judgment" by Primerica's lawyer on the basis that the Primerica conditional receipt stated (in part) that coverage would only be in effect if the company received all test results it required. Since they did not receive the required blood test result, they were not obligated to pay a claim, and the courts agreed. [MIJES v. PRIMERICA LIFE INSURANCE CO, December 6, 2000, Illinois Appellate Court Case No. 1-00-0229.]

So, as InsTeacher has asked, if you have better information than this, please post it. Until then, anecdotal information is welcome, but not authoritative.

Posted: Sat Dec 24, 2011 06:50 am Post Subject: I am a 5 yr State Farm Agent

I have a 3 million dollar book and after 5 years I can say, stay away from the AA05 contract. The semi variable comp is a killer. I do a great job of growing auto but my fire was off this year and financial services were very slow. I went from 10 to 8% commission, you can do the math on 3 million.
I do think SF is the best bar none at paying claims and taking care of their policy holders. This is very true in my area. There are other good and some other very good companies but we are always up there with the best, bar none.
I left a corporate job making very good money but in a dying industry so my decision was the best for me. If you are in a good career, I would think twice. Go talk to 3 or 4 AA05 contract agents that have been out there AT LEAST 4 years. This has given them the time to see how their pay will fluctuate after the first couple lucrative years. Good luck! (and dont listen to the idiot on here that cant complete a comprehensive thought like the idiot from Texas). I have never in 5 years had a glass complaint. They are probably upset they could not qualify to be on the list of preferred vendors.

Posted: Fri Jan 27, 2012 08:41 am Post Subject: State Farm vs AllState

If I were PC agent I would sell one of the 2- State Farm or Farm Bearu-.. State Farm is a mutual company(policy owners are holders of company) Allstate is a stock company, which almost always equals higher prices to push stock values for shareholders.. And from a claims standpoint state farm and farm bearu pay.. with the exception of the overeager adjuster trying to keep losses down(brown nosing)

Posted: Sun Aug 12, 2012 01:55 am Post Subject:


You can find this info by using search box in the top of website with some keywords related before posting questions.

Posted: Mon Aug 20, 2012 12:49 am Post Subject:

I found some references on this subject, please refer to everyone here:

Best regards.

Posted: Mon Mar 18, 2013 09:52 pm Post Subject: state farm ins premiums

i have been a loyal state farm client for many years over 40.and recently found that the agent was mishandling my policys .when i asked for emergency road service and a lower deductable on my home going from $2 thousand to $1 thousand they told me that was no problem and as a result i was sure i had both the added changes i requested adressed but low and behold the did not change my policy to reflect my requests and when i asked them why they refused a answer and wouldnt even return my calls well wtf i gave up and am in the process of finding a new ins company..well let me see they didnt wont more of my money?and they felt my requests were what unreasonable?state farm kokomo in

Posted: Mon Mar 18, 2013 11:35 pm Post Subject:

And who is responsible for reading the policy documents, such as the DECLRATIONS PAGE that tells you what your coverage is? Did you get a premium due notice for the change to a lower deductible that would have increased your premium by several hundred dollars per year?

This is only one side of a poorly described and detailed story. It is only slightly reliable. And it also sounds more like an agency problem than an insurance company problem.

Posted: Mon Apr 01, 2013 02:09 am Post Subject:

I worked for an independent agent for State Farm. The agent was extremely obnoxious and greedy. He would cut our hard working commission if he didn't get his ways. It was horrible. I would never work for them again. Also the independent agents like to rip clients off into paying more money so that they could get more commission themselves. Very Selfish!!!!! I suggest to stay away from State Farm! :x

Posted: Wed Apr 17, 2013 07:04 pm Post Subject:

I started my insurance career as an Allstate Agent before finally moving to the financial services/life side of the business and while I'm very thankful for the opportunity they gave me that has led to a fantastic, rewarding career, right now I think Allstate is the wrong choice for both customers and agents. Really, it all boils down to the current (and previous, to a lesser extent) management's hyperfocus on raising the company's stock price. I know that the ultimate responsibility of a stock company is to earn a profit for its shareholders, but Allstate has done so at the expense of it's customers and salesforce and ultimately will end up hurting itself in the long-run.

The biggest problem for both customers and agents is the series of huge rate hikes Allstate has taken over the last few years. To boost share prices, Allstate decided to non-renew hundreds of thousands of homeowner policies in hurricane prone coastal states to reduce exposure to catastrophes and also increased profits at the same time by raising rates on remaining customers to offset the losses. Today, Allstate has by far the highest profit margin on it's home & auto insurance in the industry and literally every quarter or two they announce another rate hike of 5-10%. For all but the very best customers (in Allstate's eyes), i.e. married, mid-40s+, 2+ cars, homeowner, perfect credit, spotless driving history, & 3-5+ yrs of continuous standard insurance, Allstate is extremely expensive and even pricey for those preferred customers. As a result, they're bleeding both customers and agents, whose businesses have been devastated by the loss of 1.2+ million customers without the ability to sell new policies because of the price. Not to mention Allstate's recent intro of it's House & Home new homeowner's product which is far inferior to the competition at often higher prices (roofs over 10 years old are automatically only covered for actual cash value with NO option to upgrade to replacement cost, using driving records to price homeowners insurance), it's not shocking why customers are leaving in droves. Agents' just can't turn a profit with shrinking books and rates so uncompetative, especially new scratch agents w/o existing customers.

The other reason that Allstate is a bad choice for agents is the company's treatment of its agency force over the last four or five years. The biggest issue is that Allstate can unilaterally change the Exclusive Agent contract at any time, and its binding on all agents no matter what or when they initially signed. At State Farm, once an Agent signs their permanent contract it can't be changed without their agreement (or at least that's how it used to work), but at Allstate the company can make any changes it wants and it's effective for all agents on all contracts. The biggest change recently has been the move from 10% base commission to variable comp w/ a 9% base. Agents can get higher commission levels (up to 14% I believe, for the top 1-2%) by jumping through hoops such as mandatory staffing levels, office appearance, call forwarding at night, and high survey scores, and also meeting minimum growth & life/financial production. Sell 1 too few life policies in a 12-mo moving period and it's back down to 9%. Worst though,was that it devalued agents' books by 10% in resale value, since for accounting purposes the value is based on the min. guaranteed rate, 9%. Other changes included spreading book buy-backs out from 1 to 2 years, ever-shifting quotas & agency requirements for bonuses and even termination, the gradual shrinking of the agents' bonus pool, tigher control over book sales to outside buyers, taking ownership of new brokered business that agents used to own, shifting more expenses to agents, the firing of all 10k+ employee agents & rehiring them as 1099 ICs, and even the intro of "mass terminations" of "underperforming agents" for not meeting growth numbers, many of whom had been Allstate agents for decades who built profitable books that they were content to service & live off the renewals they'd built over 20-30 years. Allstate's CEO even said "We can do whatever we want", and called the agents who generate 90% of Allstate's premium "human modems". It isn't that any single action or change has been so devastating as to cause 8,000 agents to leave, but the cumulative effect of years of small mistreatments and the principle of good faith Allstate violates when it unilaterally changes the contract agents signed & plan their business on. Even the biggest advantage of being an Allstate agent, owning the economic interest in your book of business, isn't nearly as valuable as it once was since the company has taken control of the sale & purchase of books, all but banning inside sales to other agents, making it extremely difficult to find an "approved buyer", denying the deal at the last minute between an agent and a buyer who have an agreement.

I could go on for days, and I'm sure that other companies face similar problems, some even justified. But at the end of the day, when looking at becoming an Allstate agent it comes down to two reasons I'd say no: prices are so high it's extremely difficuly to grow sales to achieve & maintain a profitable business, and that Allstate can and frequently does make unilateral changes to the agent contract that an agent must accept, or leave. It alwayss comes down to one thing - increasing profits to raise share prices, unfortunately at the expense of customers and agents. Once management's focus turns towards organic growth to raise the stock price and away from inorganic growth from purchasing smaller companies, raising rates, & cutting the cost of its agency force, then things will turn around.

On a side note, the guy from Primerica who said that non-sense about term life, completely unrelated to the discussion, is a prime example of why Primerica is the joke of the financial services industry. The reason Primerica is so despised across the industry is because it's agents & Reps go around spreading completely false information. I don't know if you guys are just totally ignorant and don't know any better, or if you do know better and are outright lying, but either way it's disgusting, misrepresentation at least, and fraud at worst. Term Life does not pay out 100% of the time, nor deny fewer claims than permanent policies. In fact, permanent policies are the only insurance gauranteed to pay out as long as premiums are paid(everyone dies), but only 1-2% of ALL term life policies ever pay out a death benefit, either because they lapse, the term expires without the insured dying, or they're converted to permanent. The statement that whole life is designed to pay the lesser of the cash value or death benefit upon death is completely false, the most egregious of your statements. If you surrender the policy before you die, say after 30 years when your Primerica term policy expires, then you will only get the cash value because the death benefit is only paid upon death, shocker! Let that term lapse, expire, or surrender it and see if you get a check for the cash value. Maybe with a Return of Premium Term, but then the premium is pushing permanent policy levels, and after 30 years in certain permanent policies you'd have a higher cash value than premium paid in. Beats that term where you'd get nothing, or ROP with the premium refunded. Don't get me wrong, term life is great for many people who can't afford permanent, don't really need it, or want to suppliment a smaller perm policy. But in my opinion, this "Final Expense Life" boom we're currently seeing is the direct result of the last 20-30 years of "buy term, invest the difference". Now that those term policies have expired, Seniors are beginning to wonder how they're going to pay for final expenses, and BOOM, a huge market for permanent whole life policies. Anyways, please quit drinking the Primerica BTID kool-aid and educate yourself on the proper roles & uses of life insurance.

Sorry for going on such a looong rant, Allstate & Primerica really get me heated!! haha Especially in the same thread.

Posted: Thu Dec 12, 2013 02:10 pm Post Subject: Total loss buy back


My car was deemed a Total loss by State Farm. The title belongs to a bank, so the payment will be given to the bank. I asked my agent about keeping the car only to hear from him I could purchase the car for $1300.

I haven't been in a car accident since I was 18 years old, I'm now 43, so this question may seem a little odd,, I guess. This car was originally paid off before the title was given to the bank for a loan. The original total pay off on the car was $19,000.00, the loan was for $10,000.00, we've paid about $2800.00 on the loan, during the 6 Years of ownership we've put about $2500.00 into the car in repairs, oil changes, tires etc..

Thats a total of over $25,000.00-(Give or take) in out of pocket money spent by us. Here's the question, what rights do I have in keeping the car with this much money paid by us over the Years?? The BANK is covered by my insurance, the insurer is covered by getting some profit from the sale of the Totaled Car. Myself, however, is left with $25,000.00 paid for a car, can't keep the car afterwards and MOST importantly, left without a car ALL TOGETHER.

How is this right or lawful?? Am I missing something here? Are there some angles here that you know of that could help?


William Lee

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