There are nearly 6,000 insurance companies in the United States that help Americans protect their homes, automobiles and families. Forbes partnered with market research firm Statista to produce our first annual look at the Best Insurance Companies in Each State by covering five products: Auto, Homeowners, Renters, Term Life and Permanent Life Insurance. (Photographer: Joshua Lott/Bloomberg News)
When the Coronavirus pandemic forced millions of Americans to work from home to curtail the spread of the virus, cars sat idle in garages and the U.S. economy ground to a halt. There was one silver lining: Traffic and traffic-related accidents plunged.
San Antonio, Texas-based USAA Insurance, America’s fifth largest property-casualty insurer, used the sudden change in driving patterns and accident logs as a cue to return money to its policyholders. In 2020, USAA has returned over $1 billion to its policyholders through “auto insurance dividends,” which are helping to keep cash in their pockets at a time of economic uncertainty.
In the first few months after Coronavirus-related lockdowns were implemented, USAA paid a $800 million dividends by giving an immediate 20% credit on three months’ of auto insurance premiums. Towards the end of the summer, it added to the figure, announcing a $270 million dividend to policyholders in the form of 10% credits on premiums for the months of June and July. In total, over seven million USAA customers have received the dividends this year.
Founded in 1922 by a group of Army officers who pooled their capital together to insure each other’s automobiles, USAA expanded its coverage to the Navy and Marine Corps a year later. Now, it offers low-cost insurance products to 13 million members of the U.S. military, veterans and their families. With a history of passing on savings to customers and deep loyalty, USAA is the top performing insurer in Forbes’ first annual ranking of the Best Insurance Companies in Each State.
To make our ranking, Forbes partnered with market research firm Statista to survey over 20,000 insurance customers in every state nationwide. Our ranking covers five products: Auto, Homeowners, Renters, Term Life and Permanent Life Insurance. To gauge whose customers gave their insurers the highest grades, our survey factored customers’ overall recommendation, general satisfaction as well as five subdimensions such as financial advice, customer service, pay-to-performance ratios, transparency and damage/benefit ratios.
To provide a comprehensive assessment of insurers on a state-by-state basis, we were able to award 1-to-5 insurance companies in all U.S. states for up to 5 insurance products. To make our list, insurers had to have a total score of at least 70 (on a scale from 0-to-100). Because many insurers operate in multiple states, just 93 firms made our list, or about 1.5% of providers nationwide. In total, our ranking includes 772 awards throughout all products and states.
USAA pulled in the most awards on a national basis.
It was the leading award recipient nationally in three categories, and finished as the third-leading recipient in two other categories. It won awards for its automotive insurance in 40 states, including placing as the top rated insurer in 30 states. In homeowners insurance, USAA received 39 awards, finishing at the top rated insurer in 26 states. It received 25 awards for renters insurance, placing #1 in 20 states. Add in seven awards for its term life insurance products and fifteen awards for its permanent life insurance products and USAA received 126 awards in total.
“We see that members are driving less than when the pandemic hit. As these patterns unfold, we are adjusting our auto insurance rates,” said USAA CEO Wayne Peacock when announcing the firm’s auto insurance dividend, “Giving money back to our members, especially now when budgets are stretched, is another way we are helping.” In 2019, USAA and its subsidiaries returned nearly $2.4 billion in dividends, distributions and bank rebates and rewards. In addition to auto insurance dividends, USAA’s is responding to the Coronavirus by offering special payment arrangements on property and auto insurance, extending grace periods on payments by up to a year.
Forbes and Statista’s list of the Best Insurance Companies in Each State offers unparalleled insight into one of America’s largest and most important industries.
There are nearly 6,000 insurance companies in the United States that help Americans protect their homes, automobiles and families. One of the country’s biggest industries, insurers wrote over $1.2 trillion in net premiums and contributed $630 billion, or 2.9%, to national gross domestic product in 2019, according to the U.S. Bureau of Economic Analysis. Firms are in fierce competition with each other to meet consumers’ increasing demands by offering innovative policy bundles and digital-first services.
State Farm, founded in Bloomington, Illinois in 1922 by a retired farmer and insurance salesman George Jacob “G.J,” Mecherle, was our second-leading award getter.
With 84 million policies and accounts in force nationwide, including over 40 million automotive insurance policies, State Farm led our rankings in term life and permanent life. It received awards in 17 states for term life and in 28 states for permanent life, placing as the top-rated life insurance provider in 12 states. It placed as the #2 award recipient in automotive, homeowners and renters insurance. In total, State Farm received 116 Best In State awards for its products across the categories we tracked.
Allstate, founded in 1930 by General Robert E. Wood, then the president of retailer Sears, Roebuck & Co, was the third-leading recipient of our Best In State insurance awards.
Already a giant in catalog retail, Wood decided Sears could also begin selling auto insurance by mail as Americans began to drive cars. The product, Allstate, quickly became one of America’s biggest insurers. In 1993, Sears spun off a piece of Allstate to stock market investors in what was then the largest initial public offering in U.S. history. While Sears went bankrupt and was liquidated a few years ago, Allstate has thrived, growing to a $29 billion market capitalization after its stock returned about 13% annually over the past decade, in line with the S&P 500 Index.
Allstate received a total of 59 Best In State awards, including 12 awards for its auto insurance products, 15 for home insurance and 14 for its renters insurance. It received a further 2 Best In State awards for its term life products, and 16 awards for its permanent life products.
Other large recipients of our Best In State awards were Cleveland-based Progressive Insurance, which took in a total of 39 awards. Boston-based Liberty Mutual rounded the top-5 as an award getter in Forbes and Statista’s ranking, receiving 34 total Best In State awards across the products we tracked.
AAA, or the American Automobile Association, was founded in 1902 when nine Chicago-based motor clubs banded together to help promote roads and highways that could be traversed by then-nascent automobiles. Its iconic AAA road maps began being published in 1905 and its hotel guides were launched in 1917. Now AAA is one of America’s largest insurance providers, and its Triple-A cards are used by millions of Americans for roadside assistance. The insurer took home a total of 32 of our Best In State awards.
Rounding out the top-1o of Best In State award recipients were Los Angeles-based Farmers Insurance, which won 31 of our Best In State insurance awards, New York-based MetLife, which won 25 award, GEICO (23 awards) and Safeco (22 awards). Other notable recipients included New York Life, Nationwide and Travelers, which received 14, 13 and 12 Best In State insurance awards, respectively.
As insurance products increasingly get sold by digital means and well-funded startups look to take market share from century-old providers, the industry needs to beware technological disruption.
Lemonade, a digital-only renters insurance provider founded in 2016, cracked our list, receiving six Best In State awards for its renters insurance product. After drawing in hundreds of millions of dollars in venture capital backing, Lemonade went public in July 2020 and now carries a $2.8 billion market capitalization.
“We’re seeing quite a few carriers ‘digitize’ part of the insurance process, but the infrastructure and business model is often the same, century-old framework,” Lemonade CEO Daniel Schreiber tells Forbes.