State Farm was founded in 1922 and started off as an auto insurance-only provider. The company now has 16.19% of the private passenger auto market share and all of their underwriting is done within the company. Their customer base started off as local farmers, but today they service people of all ages throughout the country. State Farm specializes in auto, home and life insurance.
AAA, also known as the American Automobile Association, was established in 1902. They currently have 1.22% of the private passenger auto market share (under the title “CSAA”). AAA uses several companies for underwriting for its home and auto policies, based on geographic region. This includes Auto Club Insurance Association and MemberSelect Insurance Company. Its customer base includes members of AAA clubs and its associated clubs. The auto portion of the company is known as CSAA rather than AAA; the adopted abbreviation previously indicative of AAA’s presence in California and the surrounding region.
AAA vs State Farm: car insurance rates comparison
To help compare these providers on face-value, Bankrate reviewed each on the basis of industry-recognized third-party agencies for customer satisfaction and financial strength, as well as each company’s quoted average annual premiums. Based on these factors, Bankrate assigned each company a Bankrate Score. While these factors provide a starting point for your comparison and review, your own circumstances may lend one provider more beneficial than the other. Your unique situation will also affect your rate, which will vary from the average premiums shown here.
|Car insurance company||Bankrate Score||AM Best||J.D. Power||Average annual premium for minimum coverage||Average annual premium for full coverage|
Rates by credit score
The following depicts each company’s average annual premium for full coverage based on credit scores. California, Hawaii and Massachusetts do not allow credit scores as rating factors. As of June 20, 2021, Washington will also be placing a temporary, three year ban on using credit scores as a determining factor in deciding rates.
|Car insurance company||Poor||Average||Good||Excellent|
Rates by age
Age is also commonly a determining factor when car insurance companies set rates. While 2021 quoted average annual premiums from Quadrant Information Services indicate State Farm’s rates are more affordable on average, nationally, AAA and State Farm both see a trend in rates for standalone policy holders declining in cost over time. Because these are national averages, your own rates will vary; comparing quotes for your situation directly will give you a personalized understanding of which provider may offer you the best rate for the coverage you need.
|Car insurance company||Age 16*||Age 18||Age 25||Age 30||Age 40||Age 60|
*16 year old cost when added to parents’ policy, 18-year-old renter
Rates by driving record
The following shows each company’s average annual premium for full coverage based on driving record. Average annual full coverage premiums show a significant increase for drivers with convictions, with AAA and with State Farm. However, AAA’s quoted average annual premiums increased more than double with a DUI conviction factored in. Speak with these providers to determine if your rates may be lower with an incident on your record, based on your situation and which discounts you may be eligible for.
|Car insurance company||Clean driving record||Speeding ticket||Accident||DUI conviction|
AAA vs State Farm: discounts
While insurance companies typically offer a variety of industry-standard discounts, there are also often discounts unique to each provider. Standard discounts most providers offer include those for insuring multiple cars or for bundling home and auto policies. AAA and State have these as well, plus a few more that are designed to assist new customers and to retain existing policyholders. AAA offers unique member discounts and an incentive for new customers who switch, and State Farm has a few discounts that specifically favor drivers who practice safe driving habits.
- AAA Dollars — Offers discounts and deals to members for more than just insurance. Helps members save on gas, rental cars and much more.
- Paying in full — Insureds receive a discount on premiums when they pay in full, as opposed to setting up a payment plan.
- Advanced shopping discount — Great for new members, drivers may be eligible for this discount if they purchase a policy more than seven days before the coverage begins on a vehicle that was previously covered by another policy for at least six continuous months.
- Accident Free — Insureds receive a discount for remaining accident free. Discount increases the longer a customer goes without accidents.
- Steer clear — This discount is offered to drivers under the age of 25; those who participate in the program to learn to be a better driver and save money on their premium.
- Drive Safe & Save — Drivers eligible for this discount will save based on their personal driving habits. Mileage and other factors help determine how much they can save.
AAA vs State Farm: online and mobile experience comparison
Both AAA and State Farm make it easy for customers to navigate its websites, as well as the mobile apps. Each site provides helpful information regarding understanding and managing policies and the apps offer similar functionalities for policy management. Based on app feedback from users, State Farm’s mobile app is more positively reviewed, with the iOS version of the app receiving the highest scores.
- Apple store rating: 4.2 — Allows for easy emergency roadside assistance. Also displays local perks to members, as well as overview of policies.
- Google Play rating: 4.2 — Features the same functionality of the iOS version, but the display may differ slightly on Android devices.
- Apple store rating: 4.8 — Shows snapshot of policy information, along with alerts for anything the insured has to do to manage their policy. Makes filing a claim quick and easy, and lets customers check status along the way.
- Google Play rating: 4.6 — While the Android application shares the same functional aspects as iOS users experience, the ratings indicate the Android experience is not as highly reviewed. However, anything above a 4.5 is an excellent score for an app.
Frequently asked questions
Which insurance company is better?
Overall, State Farm has better ratings and lower overall average annual premiums, but this does not mean it will necessarily be the best provider for you. The best way to see which company is better for you is to get quotes from both and compare your personalized rate and coverage options, as well as finding out which discounts you could qualify for.
Does AAA insure drivers who are not members?
No. To qualify for a AAA insurance policy, at least one named insured has to be a member. If you are interested, an agent can help you sign up for a membership after providing a quote. Policyholders may also be eligible for additional discounts just based on AAA membership.
Does State Farm offer memberships?
No, State Farm is a mutual company that offers insurance to any eligible person. As long as you can meet underwriting requirements, you can purchase insurance through State Farm.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. 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 coverages that meet each state’s requirements. Our base profile drivers own a 2019 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.
Credit: 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. The following states do not allow credit to be a factor in determining auto insurance rates: CA, HI, MA
Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. 16-year-old rates were factored as the added cost to their parents’ policy; 18-year-old rates were calculated as drivers who rent their primary residence.
Incident: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket, single DUI conviction (BAC of >= .08) and lapse in coverage.