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Farmers Home Insurance Review
|Price||Varies by location, home, and other factors|
|Best For||Those looking for a flexible policy they can customize|
|Not For||Those who place a high value on customer service|
Updated home systems
|Standout Features||Claim forgiveness|
Cosmetic damage coverage
Farmers Insurance is a champion of the consumer, never wavering in its efforts to help customers get back on their feet following a disaster. It provides comprehensive coverage, affordable rates, and exceptional customer service to residents of all 50 states.
Is it True?
Sort of. Farmers offers comprehensive home insurance policies for traditional and specialty homes, as well as condos and mobile homes. These protect against all major perils, including theft, fire, and storm damage. Earthquakes and flood damage are not covered under the standard homeowners policy due to the costly nature of these claims, but this will be true of any insurer. There are several optional coverages if you’re looking to customize your policy. Farmers is also one of few home insurers to offer claim forgiveness, which suspends the premium surcharge you receive following a claim. It’s not an option for everyone, though, because you have to be claim-free for six years before you become eligible.
It’s difficult to say how Farmers fares in terms of price, because rates are highly personalized. In the 2016 J.D. Power Homeowners Insurance Survey, customers reported the price as being average. But the only way to find out how much it’ll cost you is to get a quote. Farmers doesn’t offer much in the way of discounts, but you may be eligible for savings if you’ve recently renovated your home,or if you bundle your home and auto coverage into your homeowners policy. Additional discounts may be available depending on where you live, but you’ll have to talk to your local Farmers agent to find out what’s available in your area.
Where Farmers lacks is its customer service. Though it did score slightly above the national average in the J.D. Power survey, it received average ratings in every category. And in the insurance industry, that’s not a good thing. It earned similar results in J.D. Power’s Property Claim Satisfaction Survey, though customers did indicate that the interactions they had with agents were generally positive. More troubling, though, are the numerous complaints and lawsuits that have been filed against Farmers in recent years. The company was forced to pay $84 million to Texas policyholders because it overcharged them for their coverage. There have also been reports of the company allegedly failing to pay legitimate claims or dropping customers for filing multiple claims. The company denies any wrongdoing.
Our Deep Dive
- Claim forgiveness: If you qualify, Farmers won’t raise your rates following your first claim. However, you must remain claim-free for six years in order to be eligible for this benefit. This type of coverage is rare in the industry, so if it’s something you’re interested in, Farmers is worth a closer look.
- Contents replacement cost: This optional coverage costs extra, but for some, it may be worth it because it ensures you get the full replacement cost of your damaged or stolen property. Most standard homeowners policies only refund you the item’s depreciated value, which may not be enough to cover the cost of a new replacement.
- Few discounts: Farmers doesn’t offer you many ways to save on your home insurance policy. Installing smoke or burglar alarms will earn you a discount, as will replacing your roof or the systems in your home. And of course, bundling your home and auto policies will help lower your insurance costs as well. But that’s about it. Depending on where you live, you may be eligible for a few additional discounts, but you’ll have to speak to a Farmers agent to learn more.
- Eco-rebuild option: This optional coverage gives you $25,000 extra to rebuild your home with green materials following a disaster. Few home insurers give you this option, so Farmers is worth considering if you’re interested in this type of coverage.
- Extra coverage for valuables: You can purchase additional personal property coverage for your valuable jewelry, art, or collectibles to ensure you receive the full replacement value if the items are stolen or damaged.
- Mobile policy access: Farmers has mobile apps for Android and iOS devices. These enable you to view policy documents, pay bills, and contact your local agent from your phone or other mobile device.
- Cosmetic damage coverage: Farmers will cover the cost of repairing any cosmetic damage to your home when you file a claim for the functional damages.
- Tree and shrub coverage: If your landscaping is affected by a disaster, Farmers will pay up to $750 per tree or shrub to have them restored, up to 5% of your policy limit.
- Identity theft protection: Farmers’ Identity Shield is an optional coverage that provides support if your identity is stolen. The company will reimburse you for losses up to your policy limit and assign someone to help you restore your identity. You’ll also be signed up for credit monitoring.
The only way to find out how much your homeowners insurance will cost you is to get a quote. Home insurance is highly personalized, taking your home size and location and your creditworthiness into account, among other things. Every insurer weighs these factors slightly differently, which is why rates vary from one company to the next.
Rates also vary depending on the level of coverage you want. A basic homeowners insurance policy covers the following perils:
- Damage caused by aircraft
- Damage caused by vehicles
- Fire or lightning
- Riot or civil commotion
- Smoke damage
- Volcanic eruption
- Windstorm or hail
If you live in an area prone to earthquakes or flooding, you may have to purchase extra coverage for this. These perils aren’t included in a traditional policy due to the costly nature of these claims. You may also want to purchase additional coverage if you have expensive artwork or jewelry that isn’t fully covered under a basic policy.
Cheaper (or Free!) Alternatives
All mortgage lenders require proof of homeowners insurance, so there’s no way to avoid purchasing it. However, you can look for cheaper home insurance providers or there are some things you can do to lower your costs:
- Shop around. Compare rates from several insurance companies and choose the one that offers you the most coverage at the best price.
- Improve your credit. A good credit history is considered a marker of financial responsibility, so raising your credit score will usually earn you a lower rate on your insurance.
- Bundle your home and auto coverage. Nearly all insurance companies offer discounts to customers who do this because they want to attract more of your business.
- Choose a higher deductible. This will cost you more if you need to file a claim, but it will lower your premium significantly.
- Install a security system. Some insurers, including Farmers, give discounts to customers who have a monitored alarm system installed in their homes.
- Disaster-proof your home. For example, homes in areas known for strong storms should have storm shutters. This will help prevent damages to the home and will reduce your likelihood of filing a claim.
Allstate: One of the only other homeowners insurers to offer claim forgiveness, Allstate is another option to check out if you’re interested in this type of coverage. It offers more discounts than the majority of home insurers, but despite this, its rates are generally high. In terms of customer satisfaction, it scored a little better than Farmers in the J.D. Power survey, though it still received an average rating overall.
State Farm: Outscoring most of its major competitors in the J.D. Power survey, State Farm is known for its quality customer service. It doesn’t have the variety of discounts offered by some of the other companies on this list, but its rates are generally affordable. It offers comprehensive policies for all types of dwellings and several optional coverages to help you build a custom policy around your needs.
Progressive: Though you can purchase homeowners insurance through Progressive, Progressive itself doesn’t underwrite these policies. Instead, it pairs you with one of its partner companies. Customers gave Progressive an average rating in the J.D. Power survey, though it still fared better than Farmers or Allstate. Before you purchase a policy through Progressive, it’s a good idea to do some research about the company that will actually be underwriting your policy.
Geico: Like Progressive, Geico doesn’t underwrite its own policies. It pairs you up with one of its partners to provide this coverage. Customers appear pretty happy with the service they’ve received from these partners, however. Geico scored fourth in the J.D. Power customer satisfaction survey, the highest of any company on this list. Before you make a purchase, though, you should still investigate the company that will be underwriting your policy.
What Others Are Saying
- Insurance Business reported that Farmers agreed to pay $84.4 million to Texas policyholders after “charging customers excessively high rates on homeowners policies while reducing coverage without informing policyholders.” Farmers admitted no wrongdoing.
- KUTV in Salt Lake City ran a story about a couple whose home was destroyed by fire. Farmers initially denied their claim, but when the couple took to the media, generating public outcry and damaging Farmers’ bottom line, the company agreed to pay for the damages. The couple said, “We’re very grateful that we had a positive turnout,” though they did express disappointment that it took a viral news story to get the company to respond.
- KFOR in Oklahoma City published an article stating that Farmers dropped a family that had filed two tornado claims. Under Oklahoma state law, an insurer cannot drop a customer after a single claim, but they are allowed to do so after multiple claims if they feel the risk is too high. The customer expressed his disappointment with the situation: “I didn’t think it was a reason at all [for non renewal]…I saw it as a way out. I can’t see that $8,500 in the last two years with the storms we’ve had that’s going to break Farmers, so they’re scared to do anything with me? That just doesn’t make any sense to me.”