Founded in Los Angeles in 1928, just one year before the Great Depression, Farmers Insurance survived the worldwide economic disaster and expanded to become one of America’s premier insurance providers. In its infancy, Farmers offered car insurance for farmers, but over the years, the company expanded its portfolio to include insurance for businesses, homes and recreational vehicles. Farmers also has investment products.
Farmers sells renters insurance through independent insurance agents and numerous subsidiaries, including Farmers Financial Solutions, Farmers New World Life Insurance Company, Foremost Insurance Group, The Bristol West Insurance Group, The 21st Century Insurance Group and Toggle. Farmers writes insurance policies in all 50 states and boasts a workforce of 21,000 employees, who serve nearly 20 million policyholders.
The Specs
| Price | $181 nationwide average annual premium |
| Best for | Renters who want inexpensive basic coverage |
| Not for | Renters in flood or earthquake zones |
| States served | All states |
| Discounts | Yes, a few |
| AM Best Rating | A (Excellent) |
| Standout Features | Customizable policies |
The claim
Farmers’ standard renters policies offer no-frills protection and include additional living expenses, liability, medical payments and personal property coverages. You also have the option to add replacement cost and identity protection coverages.
Farmers claims to offer superior customer support and a simple claims process, giving you the option to file a claim by calling the company, through your insurance agent or online.
Is it true?
In its 2019 U.S. Renters Insurance Study, J.D. Power ranked Farmers eighth in the nation. Farmers received lackluster scores in all ratings categories, which include billing process and policy information, claims, customer interaction, overall satisfaction, policy offerings and price. J.D. Power awarded Farmers two out of five stars in all categories except claims, which did not receive a rating. Power’s top renters insurance company, American Family, earned five out of five stars in all categories, except claims, which did not receive a rating.
Our deep dive
Most people need a variety of insurance policies to cover what’s valuable in their lives. Farmers Insurance offers a range of insurance policies, including:
- Car insurance
- Business insurance
- Homeowners insurance
- Landlord and rental properties insurance
- Life insurance
- Motorcycle insurance
- Pet insurance
- Recreational insurance
- Umbrella insurance
Farmers also offers a handful of financial and investment products, including:
- Annuities
- College savings plans
- Mutual funds
Cost rundown
Numerous factors can affect the cost of a renters insurance policy, including:
- Age of the policyholder
- Dog ownership
- Dwelling features, such as a pool or trampoline
- Location of the home
- Marital status of the policyholder
- Safety features such as security systems, smoke alarms and sprinkler systems
- Unrelated roommates
American households pay an average annual renters insurance premium of around $188. We requested a renters insurance quote from Farmers and liked the price we received. Based on $25,000 in personal property coverage, for an apartment in San Francisco, California, Farmers delivered an annual rate of $130 per year. The standard rate requested also included $5,000 in additional living expenses, $1,000 in medical payments and $100,000 in personal liability coverages with a $1,000 deductible.
Cheaper (or free!) alternatives
Farmers offers a few ways to reduce your renters insurance rate:
Earn a discount when you purchase other Farmers insurance policies.
Non-smoking households may qualify for a renters insurance discount.
Install a fire alarm or security system for even more savings.
Toggle, a Farmers subsidiary dedicated exclusively to renters insurance, may offer you more options and lower rates. The Toggle website enables you to adjust coverage for specific types of property such as technology, furniture and sports equipment. The quotes we received on Toggle offered a savings of $1 to $2 per month compared with the Farmers quote.
The competition
Insurance companies that received the best overall satisfaction ratings in the 2019 U.S. Renters Insurance Study included:
- American Family: 5 out of 5
- USAA: 5 out of 5
- State Farm: 5 out of 5
- Auto Club of Southern California Insurance Group (AAA): 3 out of 5
- Erie Insurance: 3 out of 5
USAA only offers insurance and financial products to military members and their families. However, if you qualify, a USAA renters policy offers much more protection than Farmers coverage. Most insurance companies don’t cover losses caused by flood or earthquake damage or they sell optional flood and earthquake policies. However, USAA covers earthquake and flood damage in its standard renters insurance policies.
American Family offers impressive optional coverages, which you can add to your rental policy. For example, travel protection coverage helps protect your belongings when you hit the road and includes global medical expense coverage and trip cancellation.
AAA auto club members can earn a discount when they purchase a renters insurance policy. AAA’s standard renters policy includes replacement cost coverage, which many other companies only offer as an option. Replacement cost coverage comes in handy if you need to replace items that depreciate, like computers or electronics.
When shopping for renters insurance, always consider the quality of coverage. Renters insurance is relatively inexpensive, so paying a few dollars more for better coverage can pay off in the long run.
What others are saying
The Better Business Bureau gives Farmers Insurance an A+ rating. The BBB has received around 700 complaints against Farmers in the last three years. In the last year, Farmers has settled more than 200 BBB complaints.
The National Association of Insurance Commissioners gives Farmers a 0.66 score on the homeowners complaint ratio report, much lower than the national average. In 2019, complaints filed against Farmers with the NAIC dropped 19%.
In 2019, Apartment Guide ranked Farmers renters insurance the tenth best in the country.
The bottom line
Farmers offers great rates for renters insurance, but its standard renters policies provide rather average coverage. While Farmers allows you to increase your coverage levels, standard renters policies with some other companies have better features, such as earthquake, flood and replacement cost coverages.
The post Farmers Renters Insurance Review 2020 appeared first on The Simple Dollar.
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