Allstate vs State Farm - Which is the better company?

by Guest » Thu Dec 13, 2007 05:03 am

State Farm is known to employ more than 60 million individuals dedicated to provide serving millions and providing them with insurance solutions. All state has more than 70 000 professionals offering insurance solutions to millions of individuals.

The consumer's point of view

Consumers are divided in their opinion of the two companies. Some think that State Farm is the better provider while others think Allstate is. There are individuals in our community who believe that since both State Farm and Allstate are big names in the insurance industry, it is hard to compare them both.

State Farm and Allstate seems to have a tough competition between them where they have almost equal votes in their favor. Both State Farm and Allstate share the same amount of criticism too from agents as well as consumers. Individuals have accused one of the 2 companies of denying claims for absurd reasons and the other of not paying claims again for absurd reasons.

The community has a State Farm agent putting his vote in favor of both the companies. The agent says that State Farm gives more importance to professionalism and a sense of healthy competition.

Complaints against State Farm

  • This company is accused of not being clear in their contract with the agents.
  • They have the reputation of overcharging consumers.

The fact of the matter is that, all insurance companies seem to have unhappy customers or employees. Each company has different policies and hence they may or may not suit a customer or an individual looking for employment with that organization.

Related Readings:

I am interested in opening my own auto insurance agency. Can you advise which one is better between Allstate and State Farm? thanks

Total Comments: 91

Posted: Sat Jul 05, 2008 10:23 am Post Subject:

Hi Arnold, your bad credit may or may not affect your prospect of becoming an agent. Though there is no direct correlation between efficiency and credit score, but employers are gradually putting emphasis on credit report as the criteria for employment. The general concept is that if you're bad in managing your finance, you're ought to be bad in managing your business. However, some employers won't mind recruiting you if you can prove your worth.

Posted: Sat Jul 05, 2008 10:36 am Post Subject:

Credit score won't affect your job prospect. As far I know both State farm and AllState don't look into the credit score of the candidate while recruiting.

however, an independent agent should be good in managing finance. I've seen agents ending up in debts for bad financial management.

Posted: Tue Jul 08, 2008 08:26 am Post Subject:

Hi all !!

It seems to be an interesting discussion to drop in :D State Farm certainly offers good opportunities for aspiring agents. However, when the name of State Farm ensures minimum business, it is often difficult to meet the break-even point. Its not only because of the competition from the other companies agents, but also because of the competition amongst the State Farm agencies. Moreover, the turnover of the State Farm agents, for the initial years, remains pretty low.

However the success of all the State Farm agents can be attributed to the fact that State Farm follows the strictest policy of recruiting agents. They take the pain to train you for around ten months before you're all set to operate your own business. And, during this period you'll be paid by State Farm.

Hence, if you've decided to join State Farm, ensure that you also possess the hardest set of mind with the zeal to excel.

Hope I was of some help.


Posted: Tue Jul 08, 2008 09:13 am Post Subject:

Let me throw some light upon the recruitment process of StateFarm. Juanita has mentioned its right that StateFarm train their agents for the necessary skills.

The recruitment process involves evaluation of sales aptitudes, background checks, face to face interviews and personality test. It may even take 2 years from ‘acceptance' to become fully operative StateFarm agent with own office. State Farm mainly look for the following characteristic in the candidate….

  • Ability to operate a business
  • Ability to sell insurance and financial products of the company
  • Desire to excel and self motivation
  • Dedication towards work and desire to be compensated best.
  • Strong written and communication skills

After approval you'll receive training from the in-house trainers of StateFarm.

Wishing you all the best!!

Posted: Thu Aug 28, 2008 11:02 pm Post Subject:

Its not the AA97 that is the bad contract its the TICA or AA04 contract that current agents are on that is causing them problems. They came up with the new contract in 2004 and almost every agent on it is still struggling. They have been many agents that have left State Farm due to it. I know agents that filed bankruptcy and have been divorced over it. They had meeting just this week with more lies and deceit from the company. You can't make any real money on this contract at best its a 50K a year job in your 5th year even if you are above average. There are rumors of a change to all getting the AA97 a good contract its not what the oldest agents have but still a good overall deal. Right now I would avoid State Farm like the plague unless you have $100,000 you want to invest with no guaranteed return.

Posted: Mon Sep 22, 2008 09:31 pm Post Subject:

I looked at both and choosing Allstate was an easy decision. As "Guest" stated above, with State Farm, you do not own your business. With Allstate, I own my book of business and when I retire, I can sell it and 100% of the proceeds are mine.

One side note, I would never sell back to Allstate. They will pay approximately 1.5 times the value of the book. Selling on the free market will bring me anywhere from 3 to 4.5 time the value.

Posted: Mon Jan 19, 2009 08:05 pm Post Subject: Allstate vs State Farm

Reading all of this information is very helpful because I am also considering both companies. I have a relative who is with State Farm and has done very well but he is pushing me towards Allstate. To say the least I a confused. I am making the jump from a career in claims to the agency side and want to choose the right company.

My biggest concern with State Farm is they don't have any expected agency opening in my area this year. With Allstate, they do have a local openning but I don't know much about the company (pay structure, products ect). If anyone has any advise in that relm I would love to hear it.


Posted: Tue Jan 20, 2009 01:42 am Post Subject: Statefarm VS. Allstate

I looked into both companies and It came down to my long term goal of owning the book. I think the Allstate model is good but both contracts require invested time and money. I think the requirement for both is around 30 k in liquid capital to open an agency and that is no where near enough. 50-100k is much safer and also a working spouse so you can invest in staff. With Allstate you need to write 50k a month in P&C which is approx 100 policys a month so by year 3 when the enhanced comp goes away you will have renewals around 160k that is with 90% retention. If you look at top producers there is about 4-5 agents in my region across 3 states writing this amount of business. So plan well dont just look at a 44% commission for the first goes away what ever you write monthly plan on 10% renewals after three years. My advice is if you dont at the minimum have 50k and a working spouse avoid Allstate, go to Statefarm it seems that you can make a living with seeded accounts. Which may not be what you want to make but with Allstate your income can come when you build the book.

Posted: Wed Jan 21, 2009 09:12 pm Post Subject:

I would suggest developing an independent agency rather than a captive agency like you mentioned. If and/or when the day comes that you leave the industry, captive agencies will not allow you to take your block of business. If they buy the block of business back from you, they will set the price. If you are independent, you take the business with you and you own it. Good luck.

Posted: Thu Feb 12, 2009 02:40 am Post Subject: Looking at changing industries

Am a pharmaceutical rep with 12+ years experience. Looking at becoming an agent. Is the job mentally stimulating/challenging? Financially worth it? Better to work for an agency or do your own thing?
Lots of questions I know but just trying to make the right decision. Would love to speak to above poster.

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