State Farm Insurance
From Wikipedia, the free encyclopedia
| State Farm Insurance Companies | |
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| Type | Mutual |
|---|---|
| Founded | 1922 |
| Headquarters | Bloomington, Illinois |
| Key people | Edward B. Rust Jr., CEO & Chairman |
| Industry | Finance and Insurance |
| Products | Insurance, Banking, & Investing |
| Revenue | $56.0646 billion USD (2004) [1] |
| Employees | 79,000 |
| Slogan | Like A Good Neighbor, State Farm Is There |
| Website | www.statefarm.com |
State Farm Insurance Companies are a group of large US insurance and financial services companies started in 1922 by former farmer George J. Mecherle (pronounced Ma-herl). The corporate headquarters is in Bloomington, Illinois.
History State Farm was founded as a mutual automobile insurance company owned by its policyholders. Despite the company's name, State Farm did not initially begin as a crop insurance company. Specifically, State Farm specialized in auto insurance for farmers. Founder George J. Mecherle believed that since farmers drove less and had fewer losses than city drivers, they should pay less for insurance. His idea was popular with farmers and made his new company successful.
Since its inception, State Farm has expanded its services into other popular types of insurance, such as homeowners and life insurance, in addition to banking and financial services.
State Farm has grown to include 79,200 employees and more than 16,700 agents servicing 71.6 million policies in the United States and Canada.
Edward B. Rust, Jr. is chairman of the board and chief executive officer of State Farm Mutual Automobile Insurance Company, Bloomington, Ill. He is also president and chief executive officer of State Farm Fire and Casualty Company, State Farm Life Insurance Company and other principal State Farm affiliates.
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[edit] Criticism
Hurricane Katrina's unprecedented storm surge had a severe impact on resident's of the gulf coast of Louisianna, Mississippi and parts of Alabama. Thousands of homeowners lost their homes and their way of life. Unfortunately, many failed to purchase adequate insurance. According to news accounts, fewer than a quarter of gulf coast residents had purchased flood insurance through the National Flood Insurance Program. While insurers(including State Farm Insurance) paid out billions to policy holders in the huricane's aftermath (State Farm paying more than $5 billion itself), individuals have pursued lawsuits in attempt to recover losses which they claim should be covered by their insurance contracts.
One major issue pursued in these cases has been whether insurance contract exclusions for water damage are valid and enforceable. In a much-covered lawsuit Paul and Julie Leonard v. Nationwide Mutual Insurance Company, U.S. District Court Judge L.T. Senter, Jr. ruled that such provisions were valid and enforceable. However, the judge invalidated an exclusion for wind damage that occurs in conjunction with water damage, so the Leonards were able to recover for losses due to wind. Similarly Sen. Trent Lott (R-Miss.) and Rep. Gene Taylor (D-Miss.) have pursued their own personal claims against State Farm Insurance and have pursued legislative changes. State Farm, for its part, has said that it has settled more than 84,700 home, commercial and personal property claims and paid out more than $1.1 billion in Mississippi.
Meanwhile, Kerri and Cori Rigsby, two former independent adjusters who worked for State Farm Insurance exclusively for 8 years have claimed that State Farm Insurance supervisors systematically demanded that Hurricane Katrina damage reports be buried or replaced or changed so that the company would not have to pay policyholders' claims in Mississippi. Kerri and Cori Rigsby, say they have turned over thousands of internal company documents and their own detailed statement to the FBI and Mississippi state investigators.
- Trent Lott Sues State Farm over Katrina Damage
- State Farm's Response to Hurricane Katrina
- VIDEO 20/20 Webcast Katrina Insurance
- ABC's 20/20 Mischaracterizes State Farm's Claims-Handling Process
- Profits for Insurers Are Soaring
- Sisters blow whistle on Katrina claims
[edit] CEOs
| CEO | Years Served |
|---|---|
| George J. Mecherle | 1922 - 1937 |
| Raymond Mecherle | 1937 - 1954 |
| Adlai Rust | 1954 - 1970 |
| Edward B. Rust, Sr. | 1970 - 1985 |
| Edward B. Rust, Jr. | 1985 - Present |
[edit] Financial services
Recently, State Farm has expanded into the financial services arena, such as banking and mutual funds. These are separate from its insurance products.
[edit] Trivia
- State Farm is the nation's largest automobile insurance provider, covering one in every 5 vehicles in America.
- The well-known jingle ("Like a good neighbor, State Farm is there") is just the tag ending on a full-length song. The song was written by legendary American songwriter Barry Manilow in 1971.
