The 104-Year Customer-First Legacy of State Farm: Honest Insurance Built on Risk-Based Pricing

Buck Farley

By Buck Farley, Archivist/Historian

State Farm was born from a simple conviction: people should be able to get honest insurance coverage at fair prices. This year, we mark 104 years of building on that idea—one that reshaped auto insurance and defined what it means to put customers first, innovate with purpose, and stay ready for the future.

George Jacob Mecherle—G.J.— grew up in rural Merna, Illinois. After nearly two decades of farming, he and his wife May retired in 1917 to Florida for May’s health.

When they later returned to Illinois, G.J. worked as an insurance agent, where he was troubled by auto policies that were one-size-fits-all and didn’t account for differences in driving habits or risk. Policies were limited primarily to liability coverage, required the customer to pay an annual premium, and—most importantly—were not based on how people actually drove.

That meant farmers were charged the same as city drivers even though they drove fewer miles and were less likely to have accidents. And paying annually was a serious burden for farmers.

G.J. believed this mismatch was more than just inconvenient. He saw it as a matter of fairness. The customer deserved pricing that matched risk and flexibility that respected people’s ability to pay. This deep commitment to customers endures at State Farm, where future-ready experiences are built on a legacy of listening to what customers need.
 

Putting the customer first, changing an industry

When G.J. suggested updating the auto policy to better serve farmers, his employer dismissed the idea. So G.J. left his job and started selling tractors. Yet the idea stayed with him.

On June 7, 1922, G.J.’s State Farm Mutual Automobile Insurance Company issued its first policy. From the start, State Farm’s foundation was clear, and it has never wavered: as a mutual company, we answer to customers, not shareholders, and the price you pay should match the actual risk, and the structure should work for customers—not against them.

This 104-year milestone comes as we celebrate 250 years of American independence. Both celebrations are grounded in strong tradition and an ongoing journey of improving lives through innovation.
 

Innovation continues as State Farm offers more products

Success in Auto highlighted the need for customer-first products in other insurance lines. State Farm expanded to help families protect more of what mattered in their lives. The Life Company launched in 1929, with G.J. purchasing the first policy. By 1935, the State Farm Fire Company was born, extending protection to homes and property.

Innovation showed up in day-to-day operations, too. Just as today, speed mattered then. In those days, it was important to get mail to Underwriting as quickly as possible. So, a simple solution was found: roller skates. A time-intensive paper binding process (glueing about 40–50 files an hour) produced 750 bindings an hour by introducing sewing machines to streamline the work.

Today, our employees are embracing technology to enhance the customer experience and match the expectation and pace our customers require.
 

Being a Good Neighbor is more than a slogan

Long before the slogan “Like a Good Neighbor, State Farm is There” entered American culture, it was how State Farm behaved. During the Great Depression and the 1933 bank holiday, State Farm stayed open. The company continued writing policies while other insurers folded. Tightening expenses and reducing coverages in the areas with the highest risk allowed us to protect customers where we could rather than leaving them entirely. The promise then, as it is today, was always about customers first, even when the cost of that promise was real.

State Farm’s customer focus has never stopped at coverage—it’s about helping people recover from the unexpected. Until 1969, when Hurricane Camille hit the Gulf Coast, causing catastrophic damage estimated at about $1.4 billion (approximately $11.2 billion in today’s dollars), independent firms handled catastrophe claims. Those specialized firms became overwhelmed, and customers weren’t getting help quickly enough.

So in 1972, State Farm created an in-house Special Disaster Services unit—claims associates from across the country, ready to deploy when disaster strikes. That readiness was sharpened across events through the ’70s and ’80s. Following Hurricane Andrew in 1992, the worst storm recorded at the time with over 361,000 State Farm claims, State Farm launched an industry-leading, national catastrophe team. And State Farm continues to be a good neighbor—a Next Gen Good Neighbor—using technology to build speed and simplicity behind the people helping customers recover. 
 

Becoming a Next Gen Good Neighbor

As America prepares to celebrate 250 years of innovation, State Farm’s celebrates an innovative mindset that started with G.J.: when something doesn’t serve customers well, improve it. It’s a mindset found across the communities we serve, and it drives our work today.

“That’s why we’re focused on becoming a Next Gen Good Neighbor: a State Farm that is faster and tech-enabled, while staying true to our mission and our values,” CEO Jon Farney wrote recently.

“For customers, it means fewer steps, faster answers, and more competitive prices. And in a moment of need, that means digital tools that reduce paperwork and speed up updates, paired with a person who can explain options, exercise judgment, and help a family take the next step.”

As a mutual company that serves customers, not shareholders, State Farm puts that promise into action. We announced a $5B mutual auto policyholder dividend in February and have committed $3M annually to the American Red Cross since 2024 to prepare before disaster strikes. As we continue building a human + digital approach, we honor what G.J. started and commit to what comes next: keeping the promises, serving the people, and continuing to innovate so the promise of the first policy issued in 1922 remains true.