State Farm vs USAA
State Farm was founded in 1922 and holds close to 14% of the market share for auto insurance. The company underwrites its own insurance policies and is known for offering affordable car insurance policies, quality customer service and a standard array of auto insurance options. It also offers a number of bundling options, specialized coverage and discount opportunities that may help drivers save money on their policies. In addition, State Farm was a 2023 Bankrate Awards winner and was named the best company for high-risk drivers, as drivers with blemishes on their driving records may find State Farm’s rates lower than its competitors.
USAA was founded in 1922 in San Antonio, Texas, and currently holds about 5% of the auto insurance market share. USAA is geared toward active military, veterans and qualifying family members, and membership is required to access insurance coverage options from this company, so not all drivers can access USAA’s coverage. However, those who qualify for membership may find this company to be worth considering, as it offers robust policy options and military-focused coverage, along with in-person support through local agents.
State Farm | USAA | |
|---|---|---|
Bankrate score | 4.2 | 4.3 |
Tier 1 | 4.2 | 4.3 |
Tier 2 | 4.0 | 4.0 |
Tier 3 | 4.7 | 4.6 |
Bankrate Score methodology
Our 2023 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.
Like our previous Bankrate Scores, each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. This year, our 2023 scoring model provides a more comprehensive view, indicating when companies excel across several key areas and better highlighting where they fall short.
Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, 2023 quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best and the NAIC, were analyzed.
Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
Tier 3 (Support): To encompass the many ways an auto insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored a company’s corporate sustainability efforts.
Tier scores are unweighted to show the company’s true score in each category out of a possible five points.
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Our verdict
Both USAA and State Farm offer competitive average car insurance rates that are below the national average. One of the biggest differences between these companies is coverage eligibility. USAA coverage is exclusively available to military members, veterans and qualifying family members, while State Farm has no such restrictions. So, while USAA offers lower average rates and scores higher with third parties like J.D. Power, State Farm is much more accessible to the average driver.
State Farm vs. USAA comparison
When comparing State Farm vs. USAA there are several important variables to consider. Average rates matter, but financial strength ratings, customer satisfaction, coverage options and discount opportunities may also be important to consider when determining what company works best for you.
State Farm pros and cons
Pros | Cons |
|---|---|
J.D. Power scores indicate a high level of customers satisfaction | Higher than average rates for drivers with certain driving profiles |
AM Best financial strength rating of A++ | Lower third-party ratings and scores compared to USAA |
Range of policy/bundling options and discount opportunities |
USAA pros and cons
Pros | Cons |
|---|---|
Consistently high scores from J.D. Power | Strict eligibility requirements |
Lower than average rates for numerous types of coverage | Limited claims management options |
Unique military-focused discount opportunities |
Is State Farm cheaper than USAA?
Both companies have average rates for full and minimum coverage that are below the national average, but USAA tends to have slightly cheaper average rates compared to State Farm. However, the option that is cheaper for you will generally depend on personal rating factors, like driving record, vehicle type, your ZIP code and more, as well as coverage requirements, add-on coverage options and other factors.
Car insurance company | Average annual premium for full coverage | Average annual premium for minimum coverage |
|---|---|---|
State Farm | $1,480 | $464 |
USAA | $1,361 | $371 |
Car insurance rates methodology
Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
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USAA is generally cheaper for drivers with poor credit
Your credit score is commonly reviewed by car insurance carriers in most states when you apply for insurance. Having a higher credit score typically results in lower average premiums. One caveat to this is if you live in California, Hawaii or Massachusetts, where the use of credit as a rating factor is banned. Michigan bans the use of your actual credit score but does allow companies to rate based on factors that make up your credit score.
Our research reveals that USAA generally has lower rates for all credit tiers when compared to State Farm. Whether your credit score is used to determine rates for USAA will depend on which state you are in and which insurer underwrites the policy.
Credit Score | State Farm | USAA |
|---|---|---|
Poor | $3,813 | $2,625 |
Average | $1,712 | $1,476 |
Good | $1,480 | $1,361 |
Excellent | $1,173 | $1,204 |
Rates by credit score methodology
Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit the use of credit-based insurance scores as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.
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USAA is generally cheaper for young drivers
Age is one of the key determiners for auto insurance rates. In general, younger drivers present a statistically higher risk of accidents and other incidents behind the wheel, and insurers charge them more to offset this higher risk of insuring them. On average, USAA is cheaper for teen drivers, except for drivers at the age of 16.
State Farm | USAA | |
|---|---|---|
$3,139 | $3,402 | |
$2,874 | $2,698 | |
$2,689 | $2,294 | |
$2,489 | $1,924 | |
$2,361 | $1,798 |
*Rates for young drivers are based on them being on their parents’ policy.
Rates by age (young drivers) methodology
The rates displayed reflect the total cost of a 16- through 20-year-old driver added to their parents’ policy. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.
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USAA is generally cheaper for adult drivers
As drivers age and develop more experience behind the wheel, the risk declines for insurance companies, and, in turn, average car insurance rates tend to go down. State Farm has lower averages for 25-year-old drivers, but USAA has lower averages for the remaining age groups.
State Farm | USAA | |
|---|---|---|
Age 18 | $4,066 | $3,674 |
$1,742 | $1,765 | |
$1,522 | $1,506 | |
$1,480 | $1,361 | |
$1,363 | $1,253 |
*Rates for adult drivers are based on them having their own policy.
Rates by age (adult drivers) methodology
Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.
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State Farm is generally cheaper for high-risk drivers
Driving records can have a significant impact on car insurance rates. In general, State Farm is cheaper for high-risk drivers, but USAA does have lower average rates for drivers with a speeding ticket. It’s important to note that although rates for a DUI are included, this does not necessarily indicate these companies will offer coverage to a driver with a DUI on their record.
State Farm | USAA | |
|---|---|---|
Clean driving record | $1,480 | $1,361 |
$1,704 | $1,652 | |
$1,876 | $1,971 | |
$2,431 | $2,620 |
Rates by driving record methodology
Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket and single DUI conviction.
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State Farm vs. USAA: Discounts
Car insurance companies often offer discounts for eligible drivers. These car insurance discounts can help drivers save on the cost of their car insurance premiums, but you have to meet the criteria first. While both State Farm and USAA have distinctive discounts, each also offers multi-policy, multi-vehicle and good student discounts.
State Farm unique discounts
Steer Clear: Drivers under the age of 25 with a clean driving record for the past three years may be eligible for this program with State Farm, which could earn you a discount.
Drive Safe and Save: This is a car insurance telematics program through State Farm that requires enrollment. Your driving is monitored through a smartphone app and, depending on your driving habits, you may receive a discount.
Safety equipment: If your vehicle uses an anti-theft system, airbags or anti-lock brakes, you may be eligible to receive a discount.
USAA unique discounts
SafePilot: USAA’s version of the telematics program also tracks your driving habits with an app and may assign you a personalized discount at your policy renewal.
Military installation: If you store your vehicle in a garage or storage facility on base, you may receive additional savings.
Loyal member: If your parents had USAA and you also purchased a policy of your own, you might qualify for a loyalty discount.
Usage-based insurance comparison: State Farm vs USAA
Both companies offer a usage-based car insurance program that may help you save on premiums when you drive safer. These telematics programs use real-time data from phone apps or in-car devices to evaluate your driving patterns.
State Farm | USAA | |
|---|---|---|
Device | App or in-car device | App |
Can it raise your rates? | No | No |
Availability | Not available in California, Massachusetts or Rhode Island | Select states |
Discount | Up to 30% | Up to 30% |
What it monitors | Acceleration, braking, cornering, speed and phone use | Phone use and breaking and other driving habits |
State Farm vs USAA: Customer experience comparison
Customer satisfaction and digital tools can also make a difference when comparing potential insurance companies. When it comes to the 2022 J.D. Power Auto Claims Satisfaction study, USAA is rated higher than State Farm, but both score relatively highly as part of the study. State Farm and USAA also both offer a robust lineup of online tools and features that give customers access to digital policy management. Both carriers offer a mobile app for access to ID cards, bill payment, roadside assistance and submitting a claim. However, State Farm also offers other features for on-the-go policy management, such as the ability to message an agent through the app or obtaining technical assistance.
State Farm | USAA | |
|---|---|---|
Apple store | 4.8 out of 5 | 4.8 out of 5 |
Google play | 4.7 out of 5 | 4.1 out of 5 |
J.D. Power | 882 / 1,000 | *890/ 1,000 |
*USAA not officially eligible ass it does not meet study award criteria
Frequently asked questions
Do State Farm and USAA offer homeowners insurance?
Yes, both USAA and State Farm offer homeowners insurance policies. To see which offers better rates on the homeowners coverage you want, it may be helpful to get personalized quotes from each provider. It’s important when comparing quotes to use the same levels and types of coverage so that you can see exactly how the rates line up.
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How do I choose a car insurance company?
Your choice of company will depend on what you are looking for and your unique rating factors. Understanding your specific wants and needs can help guide you to a company that is right for you. Shopping around between several companies can help you to identify which will offer the best rates on the coverage you need.
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What is the best car insurance company?
The best car insurance company for your needs will depend on your specific situation. It is important to review a variety of aspects of each carrier, including financial strength, coverage and discounts available, customer service ratings and digital assets. After considering these details, pulling free online quotes from several insurers can help narrow your choices down to a top few.
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Can I switch car insurance carriers anytime?
Yes, you can switch auto insurance at any point. It may be convenient to switch at your renewal period, but you generally do not have to. One word of caution, be sure not to cancel your old policy until you have your new one officially in place. This will help avoid any lapse of coverage.
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