Liberty Mutual vs. State Farm: Comparing Car Insurance
Liberty Mutual and State Farm have been major insurance providers in the United States for the better part of a century. Not only do both of these companies have strong reputations, but they also offer similar coverage options and policy discounts.
Memorable advertising campaigns show that both companies have a strong presence in the insurance market.
To determine which is the best insurance company for you, it’s crucial to analyze each company’s strengths and weaknesses. When comparing Liberty Mutual vs. State Farm, it’s important to consider several factors.
Coverage offerings claims and overall satisfaction ratings, and financial strength assessments can help consumers decide which of the two companies is going to best fulfill their insurance needs.
Liberty Mutual vs. State Farm
Both companies offer basic coverage choices such as collision, comprehensive, and liability insurance, but upon closer inspection, it’s clear that State Farm has a few more insurance coverage options available, including uninsured/underinsured motorist.
A large part of a Liberty Mutual vs. State Farm comparison involves claims processes.
Once a customer determines how much insurance is needed for their vehicle and sets up a policy with either company, future interactions are usually limited to the claims process. Therefore, insurance ratings pay close attention to claims satisfaction results.
The J.D. Power Claims Satisfaction Report is designed to offer consumers a reliable ranking system for insurance providers to help them determine which provider best meets their needs. This report rates State Farm vs. Liberty Mutual and offers a comparison between them and other major insurance companies.
J.D. Power uses three key performance indicator categories to help determine these rankings: communication, ease of service interaction and timeliness.
In the J.D. Power 2017 Auto Claims Satisfaction Study, Liberty Mutual received an Overall Satisfaction rating of 2 out of 5, coming in just ahead of Mercury and COUNTRY Financial, and right below Automobile Club Group.
The chart below shows the different factors that affect how companies are ranked.
|Liberty Mutual||State Farm|
|Overall Satisfaction||2/5 Stars||3/5 Stars|
|Satisfaction with Claims Reporting Process||3/5 Stars||3/5 Stars|
|Satisfaction with Representative||2/5 Stars||3/5 Stars|
|Satisfaction with Repair Process||3/5 Stars||3/5 Stars|
|Satisfaction with Rental Car Process||3/5 Stars||3/5 Stars|
In addition to the claims process, other elements determine the overall ranking of insurance providers.
When comparing Liberty Mutual vs. State Farm, you should also consider how efficiently the company communicates with policyholders and potential customers in regards to inquiries, as well as complaints.
The J.D. Power auto insurance study gathers and analyzes data to rate insurance providers in these areas.
When comparing Liberty Mutual and State Farm, even though both companies have received an overall satisfaction rating of 3 out of 5, the individual categories that make up this rating are where consumers will notice a difference.
Liberty Mutual received scores of 4 out of 5 in three of the five categories and only received a rating of 3 in pricing and call center representative. State Farm received a 3 out of 5 for its policy offering and call center representative categories and a 2 for pricing and insurer website.
The California Complaint Ratio Study analyses how many complaints major insurance companies receive in relation to their policies. California is the most populous state in the United States, therefore, this study provides a good sampling of the complaints received by Liberty Mutual and State Farm.
In the 2016 study, Liberty Mutual is ranked 45th out of 50 providers, while State Farm is ranked higher up in 18th place. Major competitors such as Allstate and Farmers came out ahead of both companies with lower complaint ratios.
Liberty Mutual received a total of 55 justified complaints in California. Based on an approximate total of 379,678 policies, the company’s complaint ratio is calculated at 14.5 per 100,000 vehicle policies. State Farm has a much better complaint ratio than Liberty Mutual, posting a 3.1 per 100,000 vehicle policies.
A justified complaint is one that exposes a violation of the contract or policy terms by the insurance provider. According to these complaint ratios, Liberty Mutual receives a much higher volume of these type of complaints than State Farm.
The National Association of Insurance Commissioners also keeps a complaint log, with a complaint ratio calculated on complaints received against total premiums. Again, State Farm has a lower ratio, with 2.58 vs. Liberty Mutual’s 4.55, although both scores were higher than the national median of 1.00.
Comparing a company’s financial strength is a vital part of determining which insurance provider is able to meet your needs.
It’s important to know that in a major disaster, your insurer can back up the policies it’s written and pay out claims in a timely fashion. Comparing Liberty Mutual vs. State Farm’s financial strength can be done by obtaining credit ratings from one of the five major rating agencies:
- A.M. Best
- Standard & Poor’s
- Fitch Ratings, or
Positive credit ratings indicate that Liberty Mutual has strong financial standings.
The company has a rating of “a” from A.M. Best which indicates a high degree of stability. Moody’s provides a credit rating of “A2” for the company, which also indicates that it’s financial health is strong.
A.M. Best gives State Farm a superior financial strength rating of “A++”, which proves that the company is more than capable of honoring the insurance policies it has written. Moody’s awards State Farm a financial rating of “A2,” which is equally favorable.
Pricing and Discounts
The cost of a driver’s insurance premiums depends on a number of factors.
That can include the driver’s age, gender, driving history, and geographic location. Just as any of these variables may raise the cost of insurance policies, there are several that can also help lower rates.
When comparing Liberty Mutual vs. State Farm, it’s important to consider the discounts each company makes available to its policyholders, including good driver discounts, multiple-policy or multiple-vehicle discounts, and student discounts.
Here’s a breakdown of what discounts each company offers to policyholders:
|DISCOUNT||LIBERTY MUTUAL||STATE FARM|
|Student Away from Home||NO||YES|
|Completed Driver Training Course||NO||YES|
|Completed Safe Driving Course||NO||YES|
|Pay in Full||YES||NO|
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Liberty Mutual vs. State Farm: Which is Best For You?
Use the information provided in this comparison of Liberty Mutual vs. State Farm to choose the insurance carrier that best fits you and your family’s needs.
Each company has great coverage options and a variety of helpful discounts that can lower the cost of your premiums.