How State Farm Got Its Name, Helping Life Go Right for Everyone
State Farm has come a long way since its humble beginnings in the 1920s, and it is time to trace its journey.
Written by Lisa Steuer McArdle
Reviewed by Kathleen Flear
Recently,
State Farm
was named the second best insurance company. That's a big honor, and it took a lot of work to get it. It also took many years. State Farm has come a long way since its humble beginnings in the 1920s, and it is time to trace its journey.
State Farm beginnings
Zippia
reports that State Farm started in 1922 when a man named George Mecherle got some ideas. He wanted to sell low-cost automobile insurance to farmers in Illinois.Mecherle was 40 and had been a farmer most of his life. However, his wife got sick, so he had to switch careers. He started selling policies for an insurance company in Bloomington, Illinois.
He quickly left that company and formed the State Farm Mutual Automobile Insurance Company. He gave it that name to indicate that he wanted to insure farmers in the state.
By 1926, he was getting unsolicited applications from non-farmers. He formed the subsidiary City and Village Automobile Insurance Company.
The subsidiary didn't do well, and State Farm absorbed it. They re-wrote the by-laws to write the new policies. They did well through the second world war, but they had to restructure in 1947.
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
What is unique about the company?
You can start with the company museum. It houses a restored 1935 Mack Fire Truck with a blurb about its fire and casualty subsidiary. This is in the Bloomington, Illinois home office.
Another interesting thing about State Farm is its posture chairs. These were part of a 1935 program to boost worker morale. Mecherle believed in providing programs to help workers financially, physically, and educationally.
The posture chairs supported people's backs as they sat at desks for long hours, and these were necessary because the company aimed to sell one million policies. In fact, State Farm was once sued for having too big a cash reserve.
It was alleged in 1989 that its reserve was twice the industry standard, and a court ordered the company to refund customers to the tune of $6.87 billion. 1989 was also the year that Hurricane Hugo and an earthquake in California cost the company $35 million for vehicular damage and $570 million for property damage.
State Farm today
State Farm was at its height in the 1970s. It introduced its, "Like a good neighbor, State Farm is there," slogan in 1971, and its automobile division had been the top car insurance company since 1942.
It was not all roses and sunshine, though. State Farm got in trouble over redlining in 1996, and it was forced to pay $200 million by a court for misleading sales tactics in 1999.
Between the lawsuits, massive payouts for natural disasters, and competing companies emphasizing their cheaper policies, State Farm had a rough turn of the century. This turned around in 2005.
In 2004, State Farm came out with “True Stories” ads that emphasized relationships with agents, and that seemed to increase State Farm's sales. It also boosted their public image. They have been on the rise ever since.
Getting insurance from the best companies
State Farm isn't the only company with a solid track record for good deals. There are plenty of big names in the business, and none of their policies were the same.
This is why
Jerry
works with many companies to find the policy that works best for you. With so many options, it is no wonder the app saves people an average of $887 a year.
4.7
