Erie Insurance vs State Farm: How Do They Compare?

Erie Insurance and State Farm are two of the largest and most recognized insurance providers in the United States. If you’re trying to choose between them for your home, auto or life insurance needs, it can be helpful to compare their company backgrounds, financial strength, customer satisfaction, coverage options and rates.

This comprehensive Erie vs State Farm insurance review will examine all of those factors. By the end, you’ll have the information you need to make an informed decision on which provider is a better fit for you.

Erie Insurance Overview

Erie Insurance was founded in 1925 and is based in Erie, Pennsylvania. Here are some quick facts:

  • Provides auto, home, commercial and life insurance
  • Operates in 12 U.S. states and Washington D.C.
  • Has over 5 million policies in force
  • Is ranked 82nd on the Fortune 500 list
  • Holds an A+ (Superior) financial strength rating from A.M. Best

Erie Insurance utilizes exclusive agents to sell policies. These captive agents only sell Erie products and work directly for the company. This can provide a more personalized level of service for customers.

State Farm Overview

State Farm was founded in 1922 and is headquartered in Bloomington, Illinois. Some key details:

  • Provides auto, home, renters, condo, life, health and commercial insurance
  • Operates nationwide
  • Has over 82 million policies in force
  • Is ranked number 31 on the Fortune 500
  • Holds an A++ (Superior) rating from A.M. Best

State Farm uses captive agents as well as independent agents who can sell policies from other providers. This gives customers more flexibility in where they purchase coverage.

Financial Strength Comparison

Both Erie and State Farm have exceptional financial strength ratings from A.M. Best, indicating they have the resources to reliably pay out policyholder claims.

State Farm holds a slight edge with an A++ (Superior) rating, while Erie has an A+ (Superior) rating. Both are at the very top of A.M. Best’s rating scale, however.

State Farm also has significantly higher levels of policyholder surplus, total admitted assets, and net income compared to Erie, which can be attributed to their larger size and scale.

Customer Satisfaction Comparison

Independent customer satisfaction ratings can provide useful insight into how happy policyholders are with their insurance company.

J.D. Power conducts in-depth surveys of customer satisfaction across industries, including insurance providers. For auto and home insurance, State Farm consistently earns among the highest customer satisfaction scores compared to competitors.

Erie Insurance also earns strong satisfaction marks, outpacing the regional and national averages in J.D. Power’s surveys. However, State Farm edges them out slightly in overall satisfaction ratings.

When it comes to claims servicing specifically, J.D. Power’s data shows Erie and State Farm receiving virtually identical high scores for the auto insurance claims process. That indicates policyholders are similarly happy with the claims experience from both insurers.

Coverage Options Compared

The types of insurance policies available, along with options for customizing those policies, allow customers to tailor protection to their specific risks and needs. Here is how Erie and State Farm stack up in terms of coverage selection:

Auto Insurance

  • Both providers offer full standard auto coverage: liability, collision, comprehensive, medical payments, and uninsured/underinsured motorist.

  • State Farm provides a few more optional add-ons like rental reimbursement coverage and rideshare coverage.

  • Erie offers diminishing deductible, which reduces your deductible for each year of safe driving.

Home Insurance

  • They both provide standard home insurance as well as options like guaranteed replacement cost, additional living expenses, scheduled personal property, and water backup coverage.

  • Erie offers coverage for identity theft and home systems protection. State Farm does not.

  • State Farm provides more discount opportunities for smart home devices and retirees.

Umbrella Insurance

  • Both carriers offer umbrella insurance up to $5 million in additional liability coverage.

  • Erie may require underlying uninsured/underinsured auto liability coverage, while State Farm does not in every state.

Overall, you have extensive chances to customize your insurance with either provider. State Farm offers just slightly more flexibility on auto add-ons, while Erie provides a few more unique homeowners policy options.

Auto and Home Insurance Rates

Insurance rates can vary widely by state, city, and individual policyholder risks. However, examining average rate data can provide a general idea of how Erie and State Farm premium costs stack up.

Auto Insurance

For minimum required auto liability coverage, Erie Insurance has average annual rates of:

  • $806 per year for drivers with good credit
  • $1,238 per year for drivers with poor credit

State Farm’s average annual minimum liability rates are slightly lower:

  • $760 per year for good credit
  • $1,193 per year for poor credit

When comparing auto insurance industry averages as a whole, State Farm and Erie have very similar premiums, both landing right around the average among top insurance providers.

Homeowners Insurance

On homeowners insurance for a typical policy, Erie Insurance has average yearly premiums of:

  • $1,030 per year
  • $722 per year for condo policies

State Farm has slightly lower average premiums:

  • $980 per year for homeowners
  • $710 per year for condos

Similar to auto insurance, State Farm and Erie home insurance rates are very close to industry averages. State Farm beats Erie by $50 annually for homeowners coverage, while Erie is $12 lower on condo coverage.

Bundling Discounts

Both insurers offer significant bundling discounts when you combine home and auto policies. State Farm provides discounts up to 25% for bundling, while Erie offers savings up to 16%. Those bundling discounts can help offset small differences in base rate costs.

The Bottom Line: Erie or State Farm?

At the end of the day, there is no universally superior choice between Erie and State Farm. Both are exceptional insurance companies with strong financial backing, satisfied customers, expansive coverage options, and competitive premiums.

However, here are a few factors that may sway the decision one way or the other for you:

  • If you prefer working with independent agents, State Farm offers that flexibility.

  • If you want access to discounts for smart home devices, State Farm has more of those available.

  • If you want coverage options like identity theft or home systems protection, consider Erie Insurance.

  • If you maintain a perfect driving record, Erie’s diminishing deductible perk could reward you.

  • If you want to bundle many policies (auto, home, life) consider State Farm for potential bigger bundling discounts.

To determine the right insurer for your situation, it’s highly recommended to compare personalized quotes for your property and vehicles. Getting quotes directly from Erie and State Farm agents in your area is the best way to accurately compare coverage costs.

And remember you can always purchase different insurance policies from different providers. You don’t need to give all your business to Erie or all to State Farm. Mixing and matching can ensure you find the top value on each individual policy.

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Is ERIE good at paying claims?

Yes, Erie Insurance is generally a reliable company. With an A+ rating from AM Best, Erie showcases its ability to pay out claims well. It also has an A+ rating from the Better Business Bureau and ranks second place in overall customer satisfaction for the J.D. Power 2023 U.S. Insurance Shopping Study.

Who is State Farm insurance biggest competitor?

Considering State Farm and Geico are the two biggest auto insurance companies in the U.S., most drivers can find what they need from either company, whether that’s minimum or full coverage. However, there are a few key differences between State Farm vs. Geico when it comes to auto insurance options.

What is the #1 insurance in America?

P/C insurance company name
2022 Net premiums written (US $ 000)
State Farm Group
Berkshire Hathaway Ins
Progressive Ins Group
Allstate Ins Group

What ranking is Erie Insurance?

ERIE earned the highest homeowners insurance ranking of all rank-eligible property and casualty (P&C) carriers with a score of 856 on J.D. Power’s 1,000-point scale. That’s 37 points higher than the homeowners insurance segment average for 2023.

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