State Farm vs USAA

State Farm was founded in 1922 and holds close to 14 percent of the market share for auto insurance. The company underwrites its own insurance policies and is known for offering affordable car insurance, 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 percent 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 — only certain drivers are eligible. However, those who qualify for coverage may find USAA to be worth considering, as it offers robust policy options and military-focused coverage, along with in-person support through local agents.

• 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.

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 which company works best for you.

State Farm pros and cons

USAA pros and cons

Is State Farm cheaper than USAA?

When comparing State Farm vs. USAA, a common concern is usually pricing. For an idea of how much you might pay, consider the average rates for full and minimum coverage from both companies. Typically, State Farm and USAA offer rates that fall below the national average, per data sourced from Quadrant Information Services. However, USAA is often cheaper for those who qualify for coverage.

Nonetheless, it’s crucial to understand that the more cost-effective option varies based on your individual circumstances. Factors such as your driving record, your ZIP code, your coverage needs and the type of vehicle you own play a significant role in determining your premium. The average rates below simply offer a baseline for comparison when getting a quote from State Farm or USAA.

• 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.

USAA is generally cheaper for drivers with poor credit

Your credit history is commonly reviewed by car insurance carriers in most states when you apply for insurance. Better credit 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 consider factors that make up your credit score. In the table below, you’ll see that USAA has lower average rates for all credit tiers when compared to State Farm.

• 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.

USAA is generally cheaper for young drivers

Age also has an influence on auto insurance rates. Younger drivers typically face higher premiums due to a statistically higher occurrence of accidents among this cohort. The table below shows each company’s average annual premium for full coverage based on age. It’s noteworthy that in states like Hawaii and Massachusetts, age is not factored into car insurance rates. On average, USAA tends to offer more competitive rates for teen drivers, although this can vary at different ages, such as for drivers who are 16.

*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.

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. If you reside in Hawaii or Massachusetts, your age will not impact your auto insurance rates. As you’ll see in the table, State Farm has lower averages for 25-year-old drivers, but USAA has lower averages for the remaining age groups.

*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.

USAA is generally cheaper for high-risk drivers

Driving records play a crucial role in determining car insurance rates. The following table illustrates USAA vs. State Farm as it pertains to average annual premiums for full coverage based on various driver profiles. It’s important to note that while the table includes rates for drivers with DUIs, not every company offers policies for such drivers. For instance, State Farm typically does not. This emphasizes the need for drivers to carefully consider their options, especially when their driving record includes serious violations.

• 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.

State Farm vs. USAA: discounts

Car insurance companies often offer discounts for eligible drivers. Car insurance discounts can help drivers save on their premiums if they meet certain criteria. 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.
• Good driver discount: New State Farm customers who have maintained a clean driving record for at least three years, with no moving violations or at-fault accidents, may be eligible.

USAA unique discounts

• SafePilot: USAA’s 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 have USAA and you purchase a policy of your own, you might qualify for a loyalty discount through the MyUSAA Legacy Discount program.

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 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 2023 J.D. Power Auto Claims Satisfaction study, USAA scored higher than State Farm, but both performed above average. 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 claims filing. However, State Farm offers additional features for on-the-go policy management, such as the ability to message an agent through the app or obtain technical assistance.

*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 similar levels and types of coverage so that you can best see how the rates line up.

  • 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.

  • 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, obtaining free online quotes from several insurers can help narrow your choices down.

  • Can I switch car insurance carriers anytime?

    Yes, you can switch auto insurance at any point. It may be convenient to switch during 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.