Alyssa Lane
Farmers homeowners insurance is a popular option for many, offering solid coverage with customizable policies. However, it is also one of the more expensive options, with premiums 67% higher than the cheapest company, Amica. There are several reasons for these higher premiums, including costly claims, inflation, and weather-related risks. For example, in 2024, Farmers dropped 1,300 Oklahoma homeowners due to wildfire risk. Despite the higher costs, Farmers provides a long list of discounts, including for nonsmokers and members of certain professions, and offers a range of ways to customize your policy.
| Characteristics | Values |
|---|---|
| Average Annual Rate | $2,600 according to NerdWallet, $1,455 according to The Zebra |
| Average Premiums | 67% higher than the cheapest company, Amica |
| Availability | Available in 42 states |
| Discounts | Affinity, preferred payment, bundling, claim-free, ePolicy, nonsmokers, members of certain professions |
| Customer Satisfaction | Ranked 6th in The Zebra's survey, ranked below average in JD Power's 2024 US Home Insurance Study |
| Reasons for Higher Premiums | Costly claims, impact of inflation, weather-related risks |
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What You'll Learn
Inflation and costly claims
Farmers homeowners insurance offers solid coverage with customizable policies. However, it is not one of the top-rated companies, and its premiums are on the higher end. The average annual rate for Farmers home insurance is $2,600, which is higher than the national average of $2,110.
There are several reasons for these higher premiums, including costly claims and the overall impact of inflation. In addition, Farmers' coverage options include extended replacement cost coverage and emergency mortgage assistance, which can increase the cost of premiums. The company also offers a range of add-ons and endorsements, such as residence glass coverage and earthquake coverage, which can further increase the cost of premiums.
Farmers' high premiums can also be attributed to the company's decision to drop or limit coverage in certain areas due to weather-related risks. For example, in 2024, Farmers announced that it would drop 1,300 Oklahoma homeowners due to wildfire risk. Similarly, the company began limiting coverage in California due to wildfires, which may have contributed to higher premiums for remaining customers in the state.
Inflation has also played a role in the increasing cost of homeowners insurance across the industry. As the cost of goods and services rises, so does the cost of repairing or replacing damaged property. This has led to an increase in the size and frequency of insurance claims, which insurers like Farmers are passing on to policyholders in the form of higher premiums.
While Farmers' premiums are higher than average, the company offers a long list of discounts for policyholders to take advantage of. These include discounts for nonsmokers, members of certain professions, and those who pay in full or enroll in automatic payments. In addition, Farmers allows customers to bundle their home insurance with other policies, such as auto or life insurance, which can lead to additional savings.
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Lack of availability in certain states
Farmers homeowners insurance is not available in all states. The insurance is available in 42 states, but it is not offered in Alaska, Delaware, Florida, Hawaii, Maine, New Hampshire, Rhode Island, Vermont, West Virginia, and Washington, D.C. In addition, Farmers homeowners insurance is not available in South Carolina, although auto insurance is.
Farmers Insurance has also been limiting coverage in California due to wildfires. In 2023, the company began limiting home coverage in the state, and in September 2024, it dropped 1,300 homeowners in Oklahoma for the same reason. However, in December 2024, Farmers Insurance announced an expansion of its coverage options in California, increasing the cap on new homeowners insurance policies and reintroducing coverage for condominiums, renters, and other properties.
The lack of availability in certain states may be due to the high-risk nature of those areas, such as the risk of wildfires in California and Oklahoma. Farmers Insurance may also be unavailable in certain states due to regulatory or business reasons, or because the company is focusing its resources on other markets.
The availability of Farmers homeowners insurance in a particular state can also change over time. For example, as mentioned earlier, Farmers homeowners insurance was previously available in Oklahoma but is no longer offered there due to wildfire risk. Similarly, Farmers Insurance recently stopped writing auto and home policies in Florida. Therefore, it is essential for homeowners to check the availability of Farmers Insurance in their state and explore other insurance options if Farmers is not available in their area.
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Higher premiums for higher-risk areas
The average annual rate for Farmers home insurance is $2,600, according to a NerdWallet analysis. This is higher than the national average homeowners insurance cost of $2,110. Several factors contribute to higher premiums for homeowners insurance in higher-risk areas.
Firstly, the location of the property plays a significant role in determining insurance rates. Properties in areas with a higher risk of natural disasters, such as wildfires, earthquakes, or floods, will typically face higher insurance premiums. For example, in 2024, Farmers Insurance dropped 1,300 Oklahoma homeowners due to the increased risk of wildfires. Similarly, in California, Farmers limited coverage due to the high frequency of wildfires, only to later expand its coverage options in 2025, providing relief to residents in high-risk areas.
Secondly, the age and condition of the home influence insurance rates. Older homes or those in need of repair may be considered higher-risk by insurance companies, leading to higher premiums. This is because older homes may have outdated electrical wiring or plumbing, increasing the likelihood of issues such as water damage or fire hazards.
Additionally, the crime rate in the area can impact insurance rates. Properties in neighbourhoods with higher crime rates, including burglary, vandalism, or theft, will likely have higher insurance premiums. Insurance companies also consider the proximity of the property to emergency services, such as fire stations or police departments. Homes located farther from these services may face higher premiums due to the increased response time in case of an emergency.
Moreover, insurance companies evaluate the risk of paying out claims when setting their rates. Areas with a higher frequency of claims, whether due to natural disasters, accidents, or theft, will likely have higher insurance premiums. This is because the insurance company anticipates having to pay out more in claims in these higher-risk areas.
Finally, insurance rates are influenced by the overall impact of inflation. As the cost of living rises, so do the expenses for insurance companies. Consequently, they pass these increased costs on to their customers in the form of higher premiums.
It is worth noting that Farmers Insurance offers a range of discounts and customizable policies that can help offset the higher premiums. Discounts are available for nonsmokers, members of certain professions, and those who pay in full or enrol in automatic payments. Additionally, bundling insurance policies, such as combining homeowners insurance with auto or life insurance, can lead to significant savings.
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Customizable policies
Farmers homeowners insurance offers customizable policies to meet its customers' ever-changing needs. The company provides a wide range of options and features to tailor your policy to suit your lifestyle.
For instance, Farmers' Extended Replacement Cost coverage ensures that if the cost to rebuild your home exceeds the limit stated on your policy, they will pay up to 25% above that limit. This option guarantees coverage for the full cost of repairing your home, even if it exceeds your policy limits.
Farmers also offers enhanced coverage for specific valuable personal items, such as jewelry, firearms, or silverware. The insured value of each item is listed, and more types of losses or damages are covered. Additionally, they provide professional services if your identity is stolen.
Another example of Farmers' customizable policies is their Personal Liability Umbrella Insurance. While a standard homeowners insurance policy includes personal liability coverage, it may not be sufficient to address all concerns. Umbrella insurance from Farmers provides additional liability coverage beyond the limits of your auto and other personal liability policies. You can choose from $1 million to $10 million in umbrella liability coverage.
Farmers also allows customers to combine their car insurance with homeowners, renters, and life insurance policies, which can lead to savings and added convenience.
The company offers a range of discounts to help offset the higher premiums, including discounts for bundling policies, being claims-free, and receiving statements electronically.
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Discounts and savings
While Farmers Homeowners Insurance premiums are on the higher end, the company offers a variety of discounts and savings opportunities to help lower costs. The availability and applicability of these discounts vary based on factors such as the state you live in, the type of insurance policy you hold, and your individual profile. Here are some of the discounts and savings options offered by Farmers:
Bundling Discounts
Farmers Insurance encourages customers to bundle their insurance policies, and they offer significant discounts for doing so. By combining your home insurance with other types of insurance, such as auto, life, umbrella, small business, or specialty insurance, you can save money on your overall insurance costs. The specific discount percentage may vary, but Farmers has mentioned savings of up to 10% or even 20% on average when bundling policies.
Affinity Discounts
Farmers Insurance offers affinity discounts based on certain professions, degrees, or affiliations. If you work in a qualifying profession (such as teaching, law enforcement, firefighting, military service, healthcare, engineering, etc.), hold a specific degree, or are a member of the armed forces (active duty, reserves, retired, or honorably discharged), you may qualify for an affinity discount on your homeowners insurance.
Payment Method Discounts
Farmers Insurance provides incentives for customers to pay their premiums in certain ways. You may be eligible for a discount if you pay your premium in full, choose to pay in two installments, or enroll in a monthly pay plan with automatic payments.
Claim-Free Discounts
Farmers Insurance rewards customers who have not filed any claims for several years. If you maintain a claims-free status for three consecutive years, you can save money on your homeowners insurance premiums.
EPolicy Discounts
Farmers Insurance promotes paperless transactions by offering discounts to customers who opt to receive their statements and policy documents electronically. By choosing to go paperless, you can reduce costs and contribute to environmental sustainability.
New Home and Protective Device Discounts
Farmers Insurance recognizes the reduced risk associated with newer homes and the presence of protective devices. If your home is less than 14 years old or equipped with protective devices, such as a smart home system that allows for remote monitoring and control, you may be eligible for additional discounts on your homeowners insurance.
Higher Deductible Discounts
Farmers Insurance also offers lower premiums for customers who choose higher deductibles. While a higher deductible means you'll pay more out of pocket if you need to file a claim, it can result in lower monthly or annual insurance costs.
It's important to note that the availability and amount of these discounts may vary based on your specific circumstances and location. To understand the exact discounts applicable to you, it's recommended to consult with a Farmers Insurance agent, who can provide personalized advice and help you maximize your savings.
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Frequently asked questions
Farmers homeowners insurance is not available in all states, and its average annual rate is $2,600, which is higher than the national average of $2,110. The company's premiums are also on the higher end, with its average premiums 67% higher than the cheapest company, Amica.
The high cost of Farmers homeowners insurance can be attributed to various factors, including the company's expansion of coverage options, the impact of inflation, and costly claims. Additionally, Farmers offers a wide range of coverage options and add-ons, which can increase the overall cost of the policy.
Farmers homeowners insurance tends to be more expensive than many of its competitors. According to a survey, Farmers ranked 7th overall for homeowners insurance, with GEICO and Liberty Mutual offering more affordable rates and higher customer satisfaction scores.
Yes, Farmers offers a long list of discounts for policyholders, including discounts for nonsmokers, members of the armed forces, and those with a qualifying degree or profession. Bundling insurance policies, such as auto, life, or renters insurance with homeowners insurance, can also lead to significant savings.
