State Farm is coming to the assistance of homeowners, though perhaps not in the exact way they might want. Widespread availability all across the country? No, sorry. Stable rates? Again, no.
Instead, State Farm is teaming up with U.S. Bank to offer personal loans up $50,000 to its policyholders. This may come in especially handy in California, where the company got a 20% rate increase last year and has applied for a 22% increase this year, pending a hearing.
The problem, of course, is that California has been battered by a combination of natural disasters, mostly fires and floods, and until recently, had stopped writing any new insurance in the state. So now, at least, homeowners may be able to take out a loan to cover their insurance premium.
Other parts of the country, particularly the Southeast, have also been taking a beating in recent years. Presumably, the State Farm agent will be a little more welcome in those areas as well.
Not a new idea
This is not an entirely new idea. State Farm agents had previously been offering a number of banking products through the alliance with U.S. bank, including deposits, co-branded credit cards and commercial loans, banking products and services.
The alliance with U.S. Bank began in 2020 when State Farm got out of the banking business and U.S. Bank assumed all of State Farm Bank’s deposit and credit card accounts.
“Together, we have already helped more than 900,000 State Farm customers access the financial products they need through their agent relationships,” said Arijit Roy, head of consumer and business banking at U.S. Bank.
U.S. Bank said its personal loans can provide one-time funding for any major purchase or project, including home improvements, debt consolidation or a private party vehicle purchase. U.S. Bank recently expanded its availability of personal loans to include all 50 states.
The loans and lines of credit are subject to normal credit approval and program guidelines.
U.S. Bancorp, with more than 70,000 employees and $678 billion in assets, is the parent company of U.S. Bank National Association and is headquartered in Minneapolis.