Farmers Insurance in 2025: A Mixed Bag for the Industry Giant

July 24, 2025 – Farmers Insurance, a household name in the U.S. insurance landscape since 1928, continues to hold a significant presence in the auto and home insurance markets. With a broad range of coverage options and a vast network of over 48,000 agents, the company remains a go-to for millions of policyholders. However, recent 2025 industry analyses reveal a complex picture of Farmers’ performance, blending strong financial stability and robust coverage with challenges like high premiums and mixed customer satisfaction. Here’s a deep dive into Farmers Insurance’s latest ratings and how it stacks up in today’s competitive market.

Financial Strength: A Solid Foundation

Farmers Insurance maintains a strong financial footing, earning an A (Excellent) rating from AM Best, a leading credit rating agency for the insurance industry. This rating, reaffirmed as of March 3, 2025, reflects Farmers’ ability to meet its policyholder obligations, even in the face of economic pressures like inflation and rising reinsurance costs. However, a 2022 downgrade by Moody’s Investors Service from A2 to A3 highlighted concerns about weak underwriting results and exposure to natural catastrophes, though the outlook remains stable. These factors suggest that while Farmers is financially robust, it faces ongoing challenges in maintaining profitability amid volatile market conditions.

Auto Insurance: High Costs, High Coverage

In the auto insurance sector, Farmers ranks No. 7 in Insure.com’s 2025 Best Auto Insurance Companies with a score of 3.81 out of 5. Customers praise its claims handling, customer service, and ease of service, with 88% of surveyed policyholders recommending the company and 85% rating it highly for trustworthiness. However, Farmers’ premiums are a sticking point. The average annual premium for full coverage is $3,858 (approximately $322/month), significantly higher than the national average of $2,312. For minimum coverage, Farmers charges around $1,153/year, compared to the national average of $622.

Farmers shines with its extensive add-on coverage options, including rideshare insurance, accident forgiveness, and new car replacement for vehicles under two model years and 24,000 miles. Its Signal® telematics program offers potential discounts of 15-30% for safe driving, though risky driving could lead to rate increases. Discounts for bundling policies (up to 14%), good students, and mature drivers help offset costs for some, but high premiums remain a barrier, particularly for young drivers and those with DUIs or speeding tickets.

Customer feedback is mixed. While 88% of customers are satisfied with claims handling, Farmers received a C- grade from collision repair specialists for its claims processes, and its complaint index is 25% higher than the industry average, according to the National Association of Insurance Commissioners (NAIC). This suggests room for improvement in streamlining claims and addressing policyholder grievances.

Home Insurance: Comprehensive but Costly

Farmers ranks No. 6 in Insure.com’s 2025 Best Homeowners Insurance Companies with a score of 3.86 out of 5, lauded for its claims handling but held back by higher-than-average premiums. The average annual premium for a policy with $300,000 in dwelling coverage is $2,506, compared to the national average of $2,110. For higher coverage limits ($500,000 dwelling), costs rise to $4,722, and premiums for policyholders with poor credit can soar to $8,311.

Farmers offers a wide array of coverage options, including unique features like guaranteed replacement cost and declining deductibles, which reduce out-of-pocket costs over time for claim-free customers. Its green reimbursement coverage, included in base policies, appeals to eco-conscious homeowners. Discounts for bundling, nonsmokers, and homes with safety features like water leak detectors or UL-approved roofing materials can lower costs. However, Farmers’ availability is limited, with no policies offered in Alaska, Delaware, Florida, Hawaii, Maine, New Hampshire, Rhode Island, Vermont, West Virginia, or Washington, D.C.

Customer satisfaction for home insurance is solid but not exceptional. In J.D. Power’s 2024 Home Insurance Study, Farmers scored 676 out of 1,000 for claims satisfaction, below the industry average of 682. Still, 82% of surveyed customers would recommend Farmers, and 87% plan to renew, indicating loyalty despite some dissatisfaction with premium costs and claims processing delays.

Challenges and Strategic Moves

Farmers faces headwinds in 2025, including higher-than-average premiums and a below-average digital shopping experience, as noted by Bankrate. Its withdrawal from offering Farmers-branded policies in Florida and limited new home insurance policies in California reflect strategic adjustments to mitigate risk in high-catastrophe areas. However, subsidiaries like Foremost Insurance and Bristol West continue to serve these markets.

On the sustainability front, Farmers is the first U.S.-based insurer to sign the Principles for Sustainable Insurance, aligning with global efforts to advance eco-friendly practices. This move may bolster its appeal to environmentally conscious consumers. Additionally, Farmers’ acquisition of MetLife’s P&C business in 2021 (rebranded as Farmers Workplace Solutions) has expanded its geographic reach and distribution capabilities, though full benefits are still emerging.

The Verdict

Farmers Insurance remains a formidable player in the industry, with strong financial backing, extensive coverage options, and a loyal customer base. Its high premiums and mixed customer satisfaction ratings, however, suggest it may not be the best fit for budget-conscious consumers or those prioritizing seamless digital experiences. For policyholders who value personalized service through local agents, customizable coverage, and robust claims handling, Farmers is a solid choice. As always, prospective customers should compare quotes to ensure Farmers aligns with their needs and budget.

For more details or to get a personalized quote, visit Farmers Insurance or contact a local agent.