Liberty Mutual vs. State Farm: Comparing Car Insurance

Liberty Mutual and State Farm have been major insurance providers in the United States for the better part of a century.

Not only do both of these companies have strong reputations, but they also offer similar coverage options and policy discounts.

Memorable advertising campaigns show that both companies have a strong presence in the insurance market.

To determine which is the best insurance company for you, it’s crucial to analyze each company’s strengths and weaknesses.

When comparing Liberty Mutual vs. State Farm, it’s important to consider several factors.

Coverage offerings claims and overall satisfaction ratings, and financial strength assessments can help consumers decide which of the two companies is going to best fulfill their insurance needs.

Here, we’ve gathered all that information (focusing on equipment, monitoring, reputation, contract and price, and technology integration) into a single review and compared State Farm vs. Liberty Mutual based on the following elements: coverage and benefits, pricing and discounts, financial strength, and customer experiences.

Liberty Mutual vs. State Farm: Coverage Compared

Drivers will find that there are many similar coverage options when comparing Liberty Mutual vs. State Farm.

Both companies offer basic coverage choices such as collision, comprehensive, and liability insurance, but upon closer inspection, it’s clear that State Farm has a few more insurance coverage options available, including uninsured/underinsured motorist.

Liberty Mutual vs. State Farm: What Do Their Customers Think?

liberty mutual car insurance logoA large part of a Liberty Mutual vs. State Farm comparison involves claims processes.

Once a customer determines how much insurance is needed for their vehicle and sets up a policy with either company, future interactions are usually limited to the claims process. Therefore, insurance ratings pay close attention to claims satisfaction results.

The J.D. Power Claims Satisfaction Report is designed to offer consumers a reliable ranking system for insurance providers to help them determine which provider best meets their needs. This report rates State Farm vs. Liberty Mutual and offers a comparison between them and other major insurance companies.

J.D. Power uses three key performance indicator categories to help determine these rankings: communication, ease of service interaction and timeliness.

In the J.D. Power 2017 Auto Claims Satisfaction Study, Liberty Mutual received an Overall Satisfaction rating of 2 out of 5, coming in just ahead of Mercury and COUNTRY Financial, and right below Automobile Club Group.

State Farm did slightly better in the study with an overall satisfaction rating of 3 out of 5, putting them just ahead of Allstate and Nationwide, and just behind GEICO.

Overall Satisfaction Satisfaction with Initial Claims Reporting Process Satisfaction with Representative Handling the Claim Satisfaction with the Repair Process Satisfaction with the Rental Car Process
LIBERTY MUTUAL 2 out of 5 stars 3 out of 5 stars 2 out of 5 stars 3 out of 5 stars 3 out of 5 stars
STATE FARM 3 out of 5 stars 3 out of 5 stars 3 out of 5 stars 3 out of 5 stars 3 out of 5 stars

The above chart shows the different factors that affect how companies are ranked.

In addition to the claims process, other elements determine the overall ranking of insurance providers.

When comparing Liberty Mutual vs. State Farm, you should also consider how efficiently the company communicates with policyholders and potential customers with regards to inquiries, as well as complaints.

The J.D. Power auto insurance study gathers and analyzes data to rate insurance providers in these areas.

When comparing Liberty Mutual and State Farm, even though both companies have received an overall satisfaction rating of 3 out of 5, the individual categories that make up this rating are where consumers will notice a difference.

Liberty Mutual received scores of 4 out of 5 in three of the five categories and only received a rating of 3 in pricing and call center representative. State Farm received a 3 out of 5 for its policy offering and call center representative categories and a 2 for pricing and insurer website.

The California Complaint Ratio Study analyses how many complaints major insurance companies receive in relation to their policies. California is the most populous state in the United States, therefore, this study provides a good sampling of the complaints received by Liberty Mutual and State Farm.

In the 2016 study, Liberty Mutual is ranked 45th out of 50 providers, while State Farm is ranked higher up in 18th place. Major competitors such as Allstate and Farmers came out ahead of both companies with lower complaint ratios.

Liberty Mutual received a total of 55 justified complaints in California. Based on an approximate total of 379,678 policies, the company’s complaint ratio is calculated at 14.5 per 100,000 vehicle policies. State Farm has a much better complaint ratio than Liberty Mutual, posting a 3.1 per 100,000 vehicle policies.

A justified complaint is one that exposes a violation of the contract or policy terms by the insurance provider. According to these complaint ratios, Liberty Mutual receives a much higher volume of these type of complaints than State Farm.

The National Association of Insurance Commissioners also keeps a complaint log, with a complaint ratio calculated on complaints received against total premiums. Again, State Farm has a lower ratio, with 2.58 vs. Liberty Mutual’s 4.55, although both scores were higher than the national median of 1.00.

Liberty Mutual vs. State Farm: Comparing Financial Strength

statefarm car insuranceComparing a company’s financial strength is a vital part of determining which insurance provider is able to meet your needs.

It’s important to know that in a major disaster, your insurer can back up the policies it’s written and pay out claims in a timely fashion. Comparing Liberty Mutual vs. State Farm’s financial strength can be done by obtaining credit ratings from one of the five major rating agencies:

  • Moody’s
  • A.M. Best
  • Standard & Poor’s
  • Fitch Ratings, or
  • DBRS

Positive credit ratings indicate that Liberty Mutual has strong financial standings.

The company has a rating of “a” from A.M. Best which indicates a high degree of stability. Moody’s provides a credit rating of “A2” for the company, which also indicates that it’s financial health is strong.

A.M. Best gives State Farm a superior financial strength rating of “A++”, which proves that the company is more than capable of honoring the insurance policies it has written. Moody’s awards State Farm a financial rating of “A2,” which is equally favorable.

Liberty Mutual vs. State Farm: Pricing and Discounts

The cost of a driver’s insurance premiums depends on a number of factors.

That can include the driver’s age, gender, driving history, and geographic location. Just as any of these variables may raise the cost of insurance policies, there are several that can also help lower rates.

When comparing Liberty Mutual vs. State Farm, it’s important to consider the discounts each company makes available to its policyholders, including good driver discounts, multiple-policy or multiple-vehicle discounts, and student discounts.

Here’s a breakdown of what discounts each company offers to policyholders:

Multiple Vehicle YES YES
Multiple Policy YES YES
Vehicle Safety YES YES
New Vehicle YES NO
Good Student YES YES
Student Away from Home NO YES
Completed Driver Training Course NO YES
Completed Safe Driving Course NO YES
Safe Driver NO YES
Pay in Full YES NO
Automatic Payment YES NO
Anti-Theft YES YES
Accident-free Driver NO YES
Hybrid YES NO
New Grad YES NO
Newly Married YES NO
Newly Retired YES NO

Use the information provided in this comparison of Liberty Mutual vs. State Farm to choose the insurance carrier that best fits you and your family’s needs. Each company has great coverage options and a variety of helpful discounts that can lower the cost of your premiums.

*While we make every effort to keep our site updated, please be aware that “timely” information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.