By John Furgurson
A couple years ago, when my kids were just 9 and ll years old, the subject of insurance came up at the dinner table. God only knows why.
My kids could recite — and often sing — the slogans of every major insurance company in the country. They had been exposed to so many commercials, they knew ‘em all…
“Nationwide is on your side.”
“Like a good neighbor, State Farm is there.”
“You’re in good hands, with Allstate.”
Prudential. “ Like a rock.”
As a parent, I was aghast. As a branding professional, I was amused, and a bit curious. Why would the insurance companies spend millions advertising on the Disney Channel and on ABC Family? At first glance, it seemed like a lot of wasted exposure.
Then I think about my own experience, and it sort of makes sense.
My parents were insured by State Farm. My wife had a State Farm agent when we got married. It never occurred to me to look anywhere else, and we’ve never had a compelling reason to change.
Insurance is one of those low-interest, out-of-sight-out-of-mind service categories that no one really wants to think about. I’d rather have a root canal than deal with insurance of any kind. And that’s why those early branding efforts are so important… once they have ya, they have ya.
We’ve stayed with the same insurance company for almost 20 years not because State Farm has good service or great rates. Not because we’re loyal to our agent, who lives 120 miles away and never speaks to us. It’s because we absolutely hate the thought of switching.
It’s like brand loyalty by default. Life, auto, home, boat, cabin… We’re all in, and the hassle factor of changing insurance carriers is just too much to even contemplate.
But that was before we ever filed a major claim. Before our little winter disaster.
It always snows a lot in the Oregon Cascades, but January 2008 was crazy. The garage/shop at our mountain cabin eventually collapsed under the weight of 10 feet of heavy, wind-packed snow. It was a total loss, to the tune of about $60,000.
Naturally, we called our agent. Her assistant put us in touch in contact with a claims adjuster, and for the first time, we realize that State Farm is like two separate companies. The independent agents who set up the policies and collect the money have nothing to do with the claims adjusters who pay money out.
For 80 years, State Farm has branded itself as a neighborly, down-home sort of company that would be there for us, if we really needed ‘em. That’s the perception they’ve spent millions to maintain.
The reality, however, is quite different indeed.
The lady who’s supposed to be handling our claim definitely didn’t get the memo about being a good neighbor. In fact, any goodwill that State Farm has built up with us over the years went right out the window with just one claim.
It’s been seven months, and they haven’t even finished cleaning up the disaster area. Our neighbors are not happy. State Farm is going to cover the loss, eventually, but the process has been painful at best. When we called our devoted agent to complain, we got nothing but excuses and second guessing.
I can’t even imagine what the Hurricane Katrina victims must have gone through. The State of Mississippi finally had to sue State Farm to get them to pay the claims due.
Talk about a PR debacle. Instead of looking like a good neighbor, State Farm came out of that storm looking like an evil, corporate giant that could care less about the little people. I’d love to know how much market share they’ve lost since then.
There are two important morals to this saga:
1. When it comes to branding, actions speak louder than words. You have to be very, very careful about promising something in a slogan or ad campaign that you can’t deliver day in and day out. Fifty years ago, State Farm probably could deliver on their promise. But not anymore. Today, State Farm is country’s largest home insurer and in the top 30 on the Fortune 500 list, It’s too big to be a good neighbor.
2. Branding is not just a function of the marketing department. It’s also an operational issue.
State Farm’s operation is totally out of alignment with their brand. The sales side and the claims side are not operating from the same playbook, and State Farm can’t fix their problem by changing their tried and true slogan. They have to change the way their claims division works in order to live up to that slogan. They need to align the experience with the brand promise.
A tall order, no doubt.
Brands have always been about trust, and promises kept. For me, State Farm betrayed that trust. The behavior of one claims adjuster was so “off brand,” I’m ready to start the long and painful process of changing insurance companies.
I think.
If anyone knows of an insurance company that doesn’t operate like two separate entities, let me know. And if there’s anyone out there who works for State Farm and would like to expand on this, please do!)
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John: I’m a State Farm agent in California. I just read your comment about your loss and extend my sympathy for the experience you have had. The State Farm interface which allows us to be the Good Neighbor is the agent who sells the policy. On any claim, but especially a large one, my role is to help the customer know what to expect. We do that by helping to match the customer’s understanding of the policy with the promise made in that contract. If there is ever a disconnect with claims, you’re right, we haven’t done as good a job as we should. We constantly try to make that connection better for our customers. If I don’t agree with claims’ interpretation of the policy I’ll go to bat for my customer, helping them to communicate facts of the loss to claims but I cannot change the language of the policy nor influence the outcome.
Claims job is to work with the customer on an ongoing basis after a loss. Indeed, the agent’s job is to sell the policy, since if no policy is in force at claims time, State Farm cannot pay a dime to anyone. The perception which insurance companies have marketed to sell policies is that if a claim occurs, we’re “Johnny on the spot” and you’ll be made whole instantly. So while that approach may sell policies that is far from reality in a complicated resolution of a loss which will require estimates, contractors, city building department approvals, permits, inventories, purchase receipts and the like which take both the customer and the company a long time to resolve. That is why we have a claims department. In addition, any construction project is stressful since so many decisions have to be made which interrupt our daily lives.
Having been an agent for nearly 23 years, I can assure you that our corporate intention is to be a good neighbor. And that is truly more than a slogan. We work very hard to pay what we owe…not more, not less. Since I’m not licensed in Oregon, nor am I your agent, I cannot personally help you with your loss. Of course, State Farm is not perfect. (No insurance company could ever admit that and sell policies). Nevertheless, when you consider the alternatives to a good neighbor, you’ll find that we still do a very good job at making people whole after bad situations. That is how we got to be #1, a position we’ve maintained for many years. And that is why the press loves to rag on us. Their job is to sell too and if they can raise interest among 20% of the public by mentioning a person’s insurance company (State Farm) whether bad or good, they’ll sell more.
Finally, I encourage you to talk to your agent regularly. If 120 miles is too far, ask for a closer one. One of my biggest challenges as an agent is to get people to come in to review in advance of a loss. As you mentioned, most people don’t want to think about insurance. Then when a loss happens, they’re surprised at the result. The regular contacts with your agent will help to avoid those surprises, and then when the agent needs to get involved with claims, it is much more personal because you’ve both done the hard advance work. Please let me know if this analysis is helpful. –Frank Bliss, working hard to be a good neighbor every day.
I had a similar problem with my insurance company–Allstate. When we were initiating the claims process, luckily, we we stumbled onto using Adjusters International, which ended up being a really good idea. adjusters int’l ended up saving us a lot of time (presumably) and got us a bigger claim. So, that’s just my two cents.
I read a simliar post just the other day by Sandra Kosineck but yours is much better.
Trial lawyers refer to State Farm and Allstate as Snake Farm and Allsnake. In my area State Farm has a pretty good reputation for taking care of their customers. However, let one of their car insurance customers hit you in an accident and hell may freeze over before you see a penny if you see anything at all. My wife was hit by a State Farm insured, 100% his fault. We had to go to the insurance department to make them pay.
If you live near a COSTCO, go through them. They sell Ameriprise Auto & Home and costco members get an awesome discount. Good luck!
State Farm is already too expensive. I hear from people that they have thousands of people at their Bloomington, Illinois headquarters collecting paychecks and doing nothing.