An Oldie But a Goodie? State Farm Might Be Overcharging You for Car Insurance

State Farm policyholders save about $700 per year on average using the Jerry app.
Written by Lee Irby
Reviewed by Carrie Adkins
Back around 1955, State Farm was a good neighbor when it was providing car insurance for Edsels and Hudsons and lots of other makes and models that don’t exist anymore. The world has drastically changed since your grandparents were starting out. We can’t afford to live in the past, and when it comes to shopping for car insurance, you don’t have to.

The Future Is Now

is an AI-fueled app that represents the future of buying car insurance. Its designers come from the high-tech world of Silicon Valley and have employed the immense power of deep-learning networks to bring the insurance industry into the twenty-first century.
uses artificial intelligence to work for you, by comparing your current policy to what’s being offered by dozens of insurance companies, in real-time, a process that used to take forever. For people that use and switch insurance using
, State Farm policyholders on average save $725 per year on car insurance.
State Farm’s website tried to use technology, too, but without the muscle of AI, it’s a clunky process. Signing up online at State Farm's website involves answering upwards to fifty questions, and at the end. . . you get told to contact some agent you’ve never heard of. By phone. At the beep leave a message!
It takes
about 3 minutes (not GEICO’s fifteen) to save on insurance. The insurance companies available through Jerry include big national brand names such as Nationwide, Travelers, Metlife, Safeco, as well as regional insurance companies. You can sign up for your new insurance and cancel your old one through the app. No muss, no fuss. Done. It uses an AI platform to match your current coverage, so you can compare apples to apples.


Customer Shrinkage

offers a completely different experience than State Farm. On the app, it takes less than a minute to sign up, and then in three minutes, you’ll get a definitive answer on what company will save you the most money with the same coverage you have now. You can switch providers right on your phone and be done in time to get back on Tik Tok.
Can State Farm keep up with the crazy pace of our Internet-of-Everything world? Early returns aren’t promising. It’s been
losing market share
, falling to 17% in 2018, its lowest in twenty years. One explanation of the drop in total customers could be how steeply State Farm had raised its rates starting in 2016, yet another compelling reason why State Farm customers need to check with
Predictably, the loss of market share has come with a side dish of customer dissatisfaction. According to JD Powers 2019 Study of U.S. Auto Insurance,
State Farm
received three stars (out of five) across the board, including Overall Satisfaction and Pricing, placing it in the middle of the ratings pack--not so hot for the so-called "industry leader."

More Art Than Science

How car insurance gets priced seems more like an art than a science. One thing is undeniable, however: it’s gotten more expensive. Between 2016 and 2017,
the average policy
rose 6.4%.
set prices based on different criteria. Some will look more closely at credit history, while others put more emphasis on total miles driven each year or past driving record, among other elements.
Another huge factor is location, location, location. Car-insurance rates change, sometimes drastically, when you cross a state line. Say you’re headed west on I-10. If you start in Alabama, you could buy pretty affordable car insurance, 37th in the country. Next door is Mississippi, which is 24th. Then comes Louisiana, which has the dubious distinction of having the most expensive rates in the country, according to the Insurance Information Institute, at $1,443 per year.
Three Southern states all in a row, and all with very different premiums. But
's AI magic can deal with this bizarre situation, as seen below:
Image Text
This graph shows you why "the average" is a misleading statistic. If you live in New York, there’s nothing "average" about the money you’d save by using
, since you’d be pocketing around $1,200 annually by switching from State Farm. You’d net a cool grand in New Jersey, but under $500 in Texas and Maryland (still a sizable saving). There’s a decent spread between the highs and lows, which is why you shouldn’t put all your faith in averages.

Traditions Change

State Farm has been around since 1922, and for many families, it’s probably become something like a tradition to stay with the same carrier that spans multiple generations. Fine, but arranged marriages used to be family traditions, too, but thankfully those went out of style. Customs change, usually based on technological innovations. Such is life.
According to the U.S. Postal Service, in 2014, State Farm sent over one billion pieces of outbound mail, using over
$300 million in postage to do so
. That world, for better or worse, is dying out, and it’s being replaced by AI-centered apps that are paperless and lightning-fast. Millions spent on postage is money that could be rebated to customers.
If you have State Farm for car insurance, you need to be like Elena R. "Very easy," she reported. "Switched from State Farm without ever being on a call. It was done within minutes." That’s what
can do for you: in the blink of an eye, without breaking a sweat, you can save big and never use an envelope.

Jerry Is A Good Neighbor, Too

It’s comforting to think of State Farm as a good neighbor, but as of now, that neighbor can’t really move around much anymore.
is an equally good neighbor, but in a quiet, faithful way. Even after finding you cheaper car insurance,
will keep monitoring customer profiles to look for even lower prices and better coverage.
is always there, always working for you. The more things change, the more they stay the same. AI might be a new technology, but Jerry relies on old-fashioned loyalty to keep customers happy.


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