State Farm Car Insurance Claims

Despite the fact that the name suggests farming origins, State Farm Mutual Automobile Insurance Company (State Farm) began in 1922. The concept behind the new insurance company was to sell auto insurance to Illinois farmers. The company’s founder, George J. Mecherle, felt that farmers deserved lower automobile insurance rates because they drove less often than city driver and were involved in fewer accidents. His ideas didn’t go over very well with the insurance company he worked for, so he went out and started his own company.

Rather than establish a corporate structure, Mecherle chose to establish a mutual organization where the funds he raised from customers then provided a common insurance service to the members of the insurance plan. His rates were popular among farmers and the insurance company grew. He began with an office staff of 5 people. By 1925, the company had 175 agents. In 1928, it had opened its first branch office in Berkeley, California.

In 1929, State Farm Life Insurance Company was added as a subsidiary insurance line. In 1935, State Farm Fire Insurance Company was added as another subsidiary. The State Farm Federal Credit Union followed in 1936 to make credit more available to State Farm employees. State Farm remained under the leadership of George Mecherle until 1937, when he turned day to day management of the company over to his son Raymond Mecherle. He remained active in developing the company’s long-range growth strategies. In 1938, the senior Mecherle proposed the insurance company boost the number of automobile policies it issued each year to 1 million by 1944. When the campaign fell behind the proposed growth schedule, George Mecherle looked at operations and organization.

He introduced national advertising for the first time and arranged cooperative deals with banks issuing new car loans. State Farm also expanding into Canada that year, opening the first branch office in Toronto, Ontario.

The goal was accomplished. By 1942, State Farm was the nation’s auto insurer, a position that holds to this day. State Farm had was selling 1 million automobile insurance policies a year by 1944. In 1948, George Mecherle proposed a goal of reaching $1 billion in life insurance sales. Once again when sales fell behind schedule, Mecherle identified the operational and organization obstacles. He merged State Farm Fire and State Farm Casualty. He instituted improved training programs for State Farm agents and added new incentive systems to motivate agents. His son saw the fruits of his father’s labors. By 1954, State Farm had reached the goal.

In 1955, State Farm expanded its insurance coverage beyond farmers and added homeowners insurance to its insurance product line. By 1964, State Farm was both the largest insurer of automobiles but also the largest insurer of homes.

When the company was looking for a new advertising jingle, they chose the jingle, “Like a good neighbor, State Farm is there.” In 1971, Barry Manilow was as yet an unknown musician. State Farm has faced some charges of unethical practices. In October 1999, the automobile insurance company ordered State Farm to pay $456 million for breaching it contract with customers by using generic replacement rather than factory original parts in auto repairs. An additional $730 million in punitive and other damages were added to this figure by the judge. Despite this and other allegations connected with the Northridge earthquake in California and Hurricane Katrina, State Farm’s long-term record as a insurance company has been strong. It still remains the #1 insurer of automobiles and homes in the United States.

State Farm Mutual Automobile Insurance Company holds assets of $100,681 million. It took in $32,064 million in premiums in 2009 and paid out $22,449 million in claims.

As auto accident injury insurance attorneys, Dell & Schaefer have represented numerous clients with their auto accident injury claims against State Farm and its affiliated companies. For assistance with your State Farm auto insurance claim, please fill out our contact form or call Attorneys Dell & Schaefer for a free consultation at 800-682-8331.