Insurance is one of those low-interest, out-of-sight-out-of-mind service categories that no one really wants to think about. That’s precisely why insurance industry marketing is one of the most cut-throat arenas in the business world. If all you have is a commodity service that people hate dealing with, you darn well better have some good advertising.
When my kids were just 9 and ll they could sing the slogans of every major insurance company in the country. They had been exposed to so many commercials, they knew ‘em all…
“Nationwide is on your side.”
“Like a good neighbor, State Farm is there.”
“You’re in good hands, with Allstate.”
Prudential. “ Like a rock.”
“We. Are. Farmers… bum bla blum bu bum ba bum.”
As a parent, it’s alarming. As a branding professional, it’s very interesting.
How could Flo from Progressive, The Geiko Gekko and Mayhem Man become so ingrained in our everyday lives? And why would the insurance companies spend millions on advertising that reaches children? Seems like their media buy on the Disney Channel and on ABC Family is a lot of wasted exposure.
But then I think about my own experience, and it sort of makes sense.
My parents were insured by State Farm, so that’s all I knew when I bought my first auto policy. My wife had a State Farm agent when we got married. I never met her, saw her, or dealt with her directly, but still, it never occurred to me to look anywhere else. Outta sight, outta mind. We never had a compelling reason to change.
Insurance industry marketing is a matter of momentum… if you can get ’em young you’ll probably have ’em for for a long time. Quite possibly, for life.
I’d rather have a root canal than deal with insurance of any kind. And that’s why those early branding efforts are so important… once they have ya, they have ya.
We’ve stayed with the same insurance company for almost 20 years not because State Farm has good service or great rates. Not because we’re loyal to our agent, who lives 120 miles away and never speaks to us.
It’s because we absolutely hate the thought of switching.
It’s like brand loyalty by default. Life, auto, home, boat, cabin… We’re all in, and the hassle factor of changing insurance carriers is just too much to even contemplate.
But that was before we ever filed a major claim. Before our little winter disaster. That’s when all that insurance industry marketing hype came crashing in around us.
Here’s what happened:
It always snows a lot in the Oregon Cascades, but January 2017 was crazy.
The garage/shop at our mountain cabin eventually collapsed under the weight of 10 feet of heavy, wind-packed snow. It was a total loss, to the tune of about $175,000.
Naturally, we called our Sate Farm agent.
Her assistant put us in touch with a claims adjuster, and for the first time, we realized that State Farm is like two separate companies:
The independent agents who sell the policies and collect the money have nothing to do with the claims adjusters who pay money out and deal with the stressed out customers who have experienced a disaster. Of any kind.
Those two halves are not aligned.
For 80 years, State Farm has branded itself as a neighborly, down-home sort of company that would be there for us, if we really needed them. That’s the perception they’ve spent millions to maintain. That was the perception I grew up with, thanks a persistently enormous branding effort.
The reality, however, is quite different indeed.
The lady who’s supposed to be handling our claim definitely didn’t get the memo about being a good neighbor. In fact, any goodwill that State Farm has built up with us over the years went right out the window with just one claim. It was a nightmare.
It took seven months before they finished cleaning up the disaster area. Our neighbors were not happy! State Farm covered the loss, eventually, but the process was painful at best. When we called our devoted agent to complain, we got nothing but excuses and second guessing.
I can’t even imagine what flood victims must go through. Or the people of Paradise, California. Or Hurricane victims … The State of Mississippi had to sue State Farm to get them to pay the claims due after hurricane Katrina.
Talk about a PR debacle. Instead of looking like a good neighbor, State Farm came out of that storm looking like an evil, corporate giant that could care less about the little people.
There are two important morals to this story:
1. When it comes to branding, actions speak louder than words.
You have to be very, very careful about promising something in a slogan or ad campaign that you can’t deliver day in and day out. The promises that are routinely made in insurance industry marketing are hard to live up to.
So shut up and do the right thing. Even if it costs you money.
Fifty years ago, State Farm probably could deliver on their promise. Not anymore. Today, State Farm is the country’s largest insurer with 16.7% market share in Auto. In the homeowners category State Farm has a huge lead on second-place Allstate.
State Farm’s too big to be a good neighbor. That’s why so many upstarts, like Progressive, have stolen market share in the last ten years.
2. Branding is not just a function of the marketing department. It’s also an operational issue.
State Farm’s claims operation is out of alignment with their brand. The sales side and the claims side are not operating from the same playbook, and State Farm can’t fix their problem by changing their tried and true slogan.
They have to change the way their claims division works in order to live up to the brand. They need to align the experience with the brand promise.
A tall order, no doubt.
Brands have always been about trust, and promises kept. For me, State Farm betrayed that trust. The behavior of one claims adjuster was so “off brand,” it actually prompted me to start the long and painful process of changing insurance companies.
I went with Progressive for one reason only… I can do business entirely online, and the user experience is quite pleasant. I don’t have to deal with an agent at all.
At least until I have to make a claim. Then we’ll see how Flo compares to the “neighbors” at State Farm.
The days of brand loyalty by default are gone for good. It’s now easy to switch insurance companies. You might even save 15% on your car insurance;-)
So the insurance companies are working harder than ever to differentiate themselves. Just as you should be.
If you need help differentiating your messages from all the competition out there, give us a call. If you want to become an household name, like Flo from Progressive, we can help. That’s what we do…. We turn ordinary companies into iconic brands.
John: I’m a State Farm agent in California. I just read your comment about your loss and extend my sympathy for the experience you have had. The State Farm interface which allows us to be the Good Neighbor is the agent who sells the policy. On any claim, but especially a large one, my role is to help the customer know what to expect. We do that by helping to match the customer’s understanding of the policy with the promise made in that contract. If there is ever a disconnect with claims, you’re right, we haven’t done as good a job as we should. We constantly try to make that connection better for our customers. If I don’t agree with claims’ interpretation of the policy I’ll go to bat for my customer, helping them to communicate facts of the loss to claims but I cannot change the language of the policy nor influence the outcome.
Claims job is to work with the customer on an ongoing basis after a loss. Indeed, the agent’s job is to sell the policy, since if no policy is in force at claims time, State Farm cannot pay a dime to anyone. The perception which insurance companies have marketed to sell policies is that if a claim occurs, we’re “Johnny on the spot” and you’ll be made whole instantly. So while that approach may sell policies that is far from reality in a complicated resolution of a loss which will require estimates, contractors, city building department approvals, permits, inventories, purchase receipts and the like which take both the customer and the company a long time to resolve. That is why we have a claims department. In addition, any construction project is stressful since so many decisions have to be made which interrupt our daily lives.
Having been an agent for nearly 23 years, I can assure you that our corporate intention is to be a good neighbor. And that is truly more than a slogan. We work very hard to pay what we owe…not more, not less. Since I’m not licensed in Oregon, nor am I your agent, I cannot personally help you with your loss. Of course, State Farm is not perfect. (No insurance company could ever admit that and sell policies). Nevertheless, when you consider the alternatives to a good neighbor, you’ll find that we still do a very good job at making people whole after bad situations. That is how we got to be #1, a position we’ve maintained for many years. And that is why the press loves to rag on us. Their job is to sell too and if they can raise interest among 20% of the public by mentioning a person’s insurance company (State Farm) whether bad or good, they’ll sell more.
Finally, I encourage you to talk to your agent regularly. If 120 miles is too far, ask for a closer one. One of my biggest challenges as an agent is to get people to come in to review in advance of a loss. As you mentioned, most people don’t want to think about insurance. Then when a loss happens, they’re surprised at the result. The regular contacts with your agent will help to avoid those surprises, and then when the agent needs to get involved with claims, it is much more personal because you’ve both done the hard advance work. Please let me know if this analysis is helpful. –Frank Bliss, working hard to be a good neighbor every day.
Folks, unfortunately, this is all too common with State Farm. I was an Agent Aspirant candidate with them, then became and Agent and after 6 months I could see how brainwashed and jaded I had become and started to realize the true nature of the company. When I started with the company, they did a great job on almost everything. They changed CEOs and it went down the toilet. I left about 6 months into being an agent and went to a different company that is much better. State Farm is not a good neighbor and they don’t care about their long tenured clients and are completely out of touch with milineals (sp?). For one, I had to apologize for claims literally daily, and at times 3 to 4 times per day. On top of that, the cancellations started coming. They cancelled anyone they could randomly for being “high claim propensity” according to SFs computer metrics. I had insureds get cancelled for two $70 or less towing claims in three years with literally zero else on their record. SF used to sell a policy that was guaranteed renewable premium. They would purposely raise rates double percentage points at a time (even with no tickets and accidents) or cancel other policies in the household that didn’t have guaranteed renewable premium to get those clients to leave. Also, claims associates would frequently try to throw the agent or team member under the bus for things and accuse us of saying things we didn’t. The last straw for me is when they started doing inspections on houses that were “chosen at random” to make sure they were still worthy of being insured. one of my clients had a few issues, and the company sent me a two page list of things he needed to do to not be canceled. This gentlemen was 86 years old and lived alone and all of his kids were out on the West coast or in the deep south. So, like an actual good neighbor, and having been a contractor myself prior, I pulled all the permits and helped him do all the work. I did also this for free to him and he just paid for the materials. I complied with the entire list, fixed everything in question per code, took pictures, had an inspector sign off on the work, etc… We got all of this done a couple weeks before the cancellation was supposed to happen. Underwriting comes back to me with a new list equally long of things that were still wrong, but wouldn’t extend the deadline. We followed the same process and got everything done and submitted per the listed, exactly to code, and signed of on by an inspector from the city……………………State Farm still canceled this client. The client blamed me for this since I was the State Farm he knew, so he left. I then lost about 12 more households because of the same incedent and had my name dragged through the mud. in all, I lost about $6000 in annual revenue from these households. PEople, don’t buy the bullshit. State Farm is a scam. they don’t give a damn about their insureds or their agents. The only reason they write any new business is on people who are young and naïve and don’t have a clue how insurance works. Also, they bamboozle new agents into thinking their markestshare in the area is only 15% to 20%, but what they conveniently don’t disclose is that only 40% of the population is actual eligible for coverage with them, and of that 40%, 65% already have State Farm. Scam, Scam Scam
I had a similar problem with my insurance company–Allstate. When we were initiating the claims process, luckily, we we stumbled onto using Adjusters International, which ended up being a really good idea. adjusters int’l ended up saving us a lot of time (presumably) and got us a bigger claim. So, that’s just my two cents.
I read a simliar post just the other day by Sandra Kosineck but yours is much better.
Trial lawyers refer to State Farm and Allstate as Snake Farm and Allsnake. In my area State Farm has a pretty good reputation for taking care of their customers. However, let one of their car insurance customers hit you in an accident and hell may freeze over before you see a penny if you see anything at all. My wife was hit by a State Farm insured, 100% his fault. We had to go to the insurance department to make them pay.
If you live near a COSTCO, go through them. They sell Ameriprise Auto & Home and costco members get an awesome discount. Good luck!
State Farm is already too expensive. I hear from people that they have thousands of people at their Bloomington, Illinois headquarters collecting paychecks and doing nothing.
Well, I do agree with what you said. I just reciently got into a car accident, my car got totalled. The person who hit me was impaired and was arrested and to top it he came off the wrong ramp (totally opposite direction). We got injuries and above all we have a small 7 months old infant with us. And then came the adjusters, its different to describe the attitude they speak you with as if i am begging for something. Statefarm dont ever delay sending you your bills and deduct premium from your account however, they are taking all the time in the world to mail us our benefits package after even reminding them many times. I had my childs stroller locked in the trunk of the car, I informed the insurance and they said that i need to get the stroller myself and it cannot be claimed or reimbursed and i need to do it else my car will be moved from the towing company and will be disposed. My car trunk was to be broken else there was no way to get the stroller out. I informed Statefarm and my agents for their approval to go get the trunk broken and get stroller and other stuff and was surpised to get a call from the adjuster after a couple of days deducting a good amount from my claim because i damaged the trunk. Keep aside i paid good 200$ to the person who broke it for me as i wasnt in the position to do that. My fault, their apporval was not in writing but was in a telephonic conversation.
Insurance around the world must be bad but i really hate statefarm, the fourth day of my accident with me having all sorts of soft tissue injuries its hard to explain the tone and the behaviour of the adjuster. When i asked for sometime to get back to her question, adjuster said she wants to leave for home and cant wait for me to respond. Explained 30 different features my car had and asked me to confirm on phone. DO i remember them byheart? All i need to say is that they are a ripoff when its your turn to claim benefits.
I wont suggest any of my friends or family to go for state farm.
I was a State Farm customer since I started driving- over 30 years. When I really needed them, they were not there. A couple years ago I remarried, and in the process of insuring my wife and her daughter with State Farm, the billing got all screwed up. A few months later, my wife had an accident that totaled her car. Fortunately she was ok, but when we called our agent’s office, there was “nothing they could do” because the policy had lapsed a couple months before due to non-payment on that particular car. I tried to explain the billing had gotten screwed up, but they took the “high road” and claimed I hadn’t paid the policy. I asked why they hadn’t called me or something, and their only response was that a notice had been sent. I never got that notice, or I would have paid it. So, after 30 years of never missing a premium, and due to their office screw-up we ended up paying for my wife’s car and are being sued for damages to someone else’s car as well. Thanks a lot, Good Neighbor.
Well let me say first that State Farm commercials are over the top and not reality when looking for the right company…After 8 months of not haveing them insure my rover .I recive a bill for a hospitailization fee ,,good thing I dont use the card that they take the money from so I had a zero balance.Which is now overdrawn thanks to State Farm. If I had money on my card I most likely would have overlooked it and they would have gotten away with FRAUD…
Like A Good Neighbor State Farm Is SNEEKY…
You Decide.,,Watch your bank statements. !!!
Roman
I have been insured by State Farm for over 10 years, my husband for over 20. Neither one of us had ever gotten into an accident or gotten a ticket, until a few years ago. We both got into little “fender benders.” I was involved in a very minor “no-fault” accident. and my husband accidentally backed into a 2-foot tall pole in a parking lot (that he didn’t know was there when he was backing up). I would say that both repairs totaled less than $1200. State Farm payed them both out relatively quickly and we were happy…. Until we got a letter in the mail from State Farm that they were going to drop us as customers because we were too much of a liability. After 30+ collective years of perfect driving, and never a late payment, we were now being told that we were a liability!! So much for being a “Good Neighbor!” We called our agent, and he told us that it was not his decision – it was “corporates” decision, and there was nothing he could do about it. We were so upset. After several weeks of yelling and screaming, our agent finally moved our cars into our house policy so they would still be covered, but the premiums went up so much that we could hardly afford it. Like everyone else has said, State Farm has gotten too big to be a Good Neighbor. All they care about is their money!
I agree with the ariticle,there is a disconnect between the salesman and the claims department. I was involved in an accident where State Farms client rear ended me and push me into the car in front. I had a State Farm mobile claim inspector come out to the house to provide and estimate. He only focused on the cosmetic damage, nothing under the hood and didn’t recommend to State Farm that they provide a rental until the damaged was fixed. The sad part of the story is when I took the vechicle in for a second and third estimate, both places where suprised that I was still driving the vehicle due to safety concerns. Lucky, the third estimate was an State Farm prefered autobody shop and they where able to pursude State Farm to provide a rental. The moral of the story is, if you have the time take the vehicle in for your own 1st and 2nd estimate. The State Farm claims agent either is not competent or is trying to save money for State Farm. Last word, State Farm has lost any chance of me switching to State Farm. I wouldn’t want myself or someone making a claim against me treated this way. I guess their slogan needs to change …
well, i had state farm for 20 some years. recently i had a escrow shortage due to a hike in the insurance on the home. i paid the shortage and decided to call state farm. they suggested i could get a repital company to inspect my home. maybe get some money back from state farm . well, the repot on the house did not give me too many credits. next thing i know ,state farm is saying i’m paying too much on the house and they are suggesting they find another company for me. uh!!!!!
State Farm is an irresponsible reckless company. They did not pay my claim for property damage and Med claims promptly and in full. I died twice during surgery as a result of an auto accident and had over 400K in medical bills. They also did not pay their uninsured or underinsure insurance policy amount promptly. Our local agent is Al Bowler in Eagle River Alaska. We cancelled 4 policies and our neighbors are doing likewise. If you are 55 or over Hartford or other insurers have a much higher consumer rating . State Farm is among the bottom. There is a good reason why State Farm has so many complaints with the BBB.
Like a bad neighbor, State Farm is hiding.
I sustained a minor loss on my vehicle from Hurricane Irene. So where was State Farm after 25 years of loyalty to them? Well they might have been someone else’s good neighbor, but they sure as hell are not mine.
I reported the claim the moment they opened, Monday morning, 9 AM, one day after the loss. I was told someone will get back to you by Tuesday.
Tuesday came and nobody got back to me. So I called them.
Oh, someone will get back to you by Thursday.
Thursday came, and my “neighbor” was nowhere to be found. So I called them again. Now their pathetic tune is that someone will get back to me “as soon as possible”. I pressed them for a specific date, but to no avail.
It is now 9 days after the storm. State Farm refuses to let my body shop touch the car until they see it and further refuse to see it. All I get out of them is one pathetic excuse after another as to why they can’t give me what I paid for. All the while, I have a broken sunroof, covered with plastic, leaving my car vulnerable to leaks and break ins.
State Farm is the worst insurance company in the world, bar none. I will be switching to Geico as soon as this claim is resolved. I have already filed a complaint with the Department of Insurance, and a lawsuit is my next step.
DO NOT USE STATE FARM FOR ANYTHING!
i have been in the autobody repair business for over 30 years and have dealt with state farm many many times. they at one time were the best at handling claims and now the are the absolut worst. i have a claim the other day that took over 3 weeks for the adjuster to come look at, when i asked him that according to the pa appraiser act they only had 3 days to contact the owner he said i know and so does state farm but they dont care, sue them if you like. what an attitude! state farm ins. stinks!!!!!
I was in Statefarm for 11 years but because of huge increase of premium, I decided to shop around but I was asked by my new insurance company to provide the letter of experience stating Im no fault to the accident. I asked my local statefarm agent to provide me the letter but they told me that they do not provide letter of experience not unless im moving to the other province. I asked my agent to show me in company policy or in any of their memos that can convince me that the word been told was authentic but they cannot show me anything instead she called thru phone somebody to find out that the policy is under process( I feel its a joke and stupid answer), The office manage said the same thing when I asked for it.
I called the State farm main office in illinois to provide me a letter of experience and I got it the following day. THIS IS BULLSHIT
Interesting. You’re right, those commercials must just disappear into the back of the mind.
State Farm is the worst unbelievable service and should just close down. If the would look how the interaction and inform customers and basically called a liar. I will never forget the experience from State of Denial. Maybe they need some training how to treat their owner as they are a mutual company I paid their salary. Think about taking care of customer, employee instead of spending your time padding your pockets. The cheat customer with the claims department and a lot of class action lawsuits in home and car. Every agent and employee should be ashamed if you look at what you company is doing you would be appall at what your doing. NO STATE FARM
I just dropped State Farm insurance and went with Geico. Many Penn State fans told me to do it, so I did it because I am a close friend with many of them (not a fan of college ball) and boy am I glad I did. Much better rates with Geico. I’ve heard that the word is out to all Penn State football fans to drop State Farm insurance because of the ban they imposed on TV sponsorship of Penn State games. These bums at State Farm couldn’t care less about the victims of Sandusky’s crimes they just want the publicity.
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I’m using WordPress, but I know nothing about the security of it. Sorry.
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Thanks. Yes I had some developer help on the look and feel of it, but it’s based on a basic WordPress theme.
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You don’t need any programming/htm skills these days. WordPress and other blogging tools to all that for you! But it’s still not quite WYSIWYG. Can’t really design it like I might like to, if I had some HTML skills.
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I must say first I’ve been with State form for well over 30 years. when I got home from work I recieved a threatening letter from Statefarm telling me that they were going to raise my rates due to the fact I did not let them know how many miles were on my 98 sunfire. I have 3 vehicles on the road and am the sole driver for each vehilce.
the letter from statefarm was to say at least , unfriendly nor even having the novel idea of thanking me for being a loyal customer. They never asked why I did’t send them the mileage of my car, nor did they seem to care
I requested the letter forwarded to their CEO , I also commented that if they raise my rates under these circumstances that I will move to another insurance company