USAA vs State Farm: Which Insurance Provider Is Better?

USAA vs State Farm
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Two of the most prominent insurance carriers, USAA and State Farm, have distinct advantages over one another. To begin, not everyone can join USAA. Only active-duty military personnel and their eligible dependents are eligible for membership in the USAA. However, according to the Insurance Information Institute, State Farm has a larger market share of the auto insurance market than any other company in the United States, with over 16%. In this article, we will discuss the full comparison between USAA vs. State Farm car and home insurance, along with its pricing.

USAA vs State Farm Insurance Overview

State Farm, which has been around since 1922, has a near-14% proportion of the U.S. vehicle insurance industry. The company is famous for its low rates, excellent service to policyholders, and comprehensive range of auto insurance products, all of which it underwrites in-house. It also offers a number of bundling choices, specialist coverage, and discount opportunities that may help drivers save money on their policy. In addition, State Farm won the 2023 Bankrate Awards for best company for high-risk drivers, as drivers with tickets and accidents on their records may discover that State Farm’s prices are more reasonable than those of other insurers.

Established in San Antonio, Texas, in 1922, USAA now controls around 5% of the country’s car insurance market. However, not all drivers have access to USAA’s coverage because the firm caters to active military, veterans, and qualifying family members, and membership is required to access insurance coverage alternatives from this company. Those who are eligible for membership, however, may find the company’s extensive policy choices and military-specific coverage, as well as the personal support available from local agents, to be compelling enough to make the investment.

USAA vs. State Farm: Which Is Better?

We found that USAA outperformed State Farm in every category related to car insurance, making them the clear winner. Its customer service, claims processing, customer loyalty, and pricing consistently earn top marks, whereas State Farm’s scores are more erratic but still quite excellent. For instance, just about a third of State Farm insurance policyholders reported being entirely satisfied with the company’s excellent driver-tracking programs, and fewer than half reported being completely content with the discounts to which they were entitled.

The biggest negative of USAA auto insurance is that it is only available to active-duty military, veterans, and their families. Therefore, it is not a viable choice for the vast majority of people. Even if you meet the requirements, you’ll need to become a member before you can request a price quote. Therefore, it is less convenient to receive a quote from them than it is from a business like State Farm, which offers free internet quotes to everyone who is interested. The typical premiums for drivers with a DUI on their record are lower at State Farm as well. Based on the data we have, it also does very well in the areas of customer service, customer loyalty, and policy renewal rates.

USAA vs. State Farm: Coverage

Standard insurance coverage options, including liability, property, and medical, are available from both USAA and State Farm. 

The range of available coverage extensions from the two services is likewise comparable. While State Farm provides some coverage, USAA provides others.

For instance, if your automobile is totaled, USAA’s auto replacement aid coverage will pay out 20% more than the car’s cash value. Guaranteed asset protection coverage, often known as gap insurance, is another service that USAA provides. State Farm doesn’t offer either of these options. Yet although USAA offers glass coverage as an add-on, State Farm covers glass claims in its complete coverage policy.

USAAState Farm
Bodily injury liability (BI)
Property damage liability (PD
Collision coverage
Comprehensive coverage
Medical payments (MedPay)
Personal injury protection (PIP)
Uninsured/underinsured motorist 
Roadside assistance
Rental car reimbursement coverage
Rideshare insurance
Accident forgiveness
Glass coverage(included with comprehensive coverage)
Guaranteed asset protection
Car replacement assistance
Mechanical breakdown insurance (MBI)

USAA vs State Farm: Customer Service

According to the research, USAA provides better service to its customers than State Farm does. Insured respondents who haven’t yet filed a claim with USAA reported a high level of satisfaction with the company’s customer service. Also, almost 68% of State Farm customers who haven’t filed a claim agree with this statement.

About 81% of those who’d filed a claim with USAA were entirely satisfied with the ease of the process while 71% of those drivers with State Farm offered the same rating. Note, however, that when compared to other leading auto insurers, State Farm ranks second in this respect.

USAA vs State Farm: Pricing

Average prices at USAA ($875) are lower than at State Farm ($1,169), although both are less than the national average ($1,321). So, it’s vital to keep in mind that vehicle insurance premiums can vary substantially depending on several factors. You may pay more or less depending on factors including where you live, your age, and your driving record. That’s why it can help to seek quotes from multiple insurance companies and compare them side by side. 

We’ve also looked at State Farm and USAA’s typical rates across many demographics to give you a sense of how these characteristics might affect your rates.

Company17-Year-Old Females17-Year-Old Males
State Farm$2,986$3,661
USAA$2,714$2,955
National Average$4,515$5,140

Insurance for teen drivers can be costly, but both USAA vs. State Farm offer policies with rates well below the national average. USAA is the more cost-effective choice for this group, both when compared to the other company and to the other leading insurers.

USAA vs. State Farm: Discounts

Car insurance reductions are plentiful between USAA and State Farm. Both carriers provide usual discounts, such as one for bundling your homeowners’ insurance, life insurance, renters insurance, or other insurance products with your auto policy.

There are some discounts that USAA provides for military personnel that State Farm does not, and there are some savings that State Farm provides for drivers that USAA does not.

USAA Car Insurance DiscountsState Farm Car Insurance Discounts
Multi-policy
Multi-vehicle
Vehicle Storage
Good student
Good driver
Accident-free
Driver’s education
Defensive driving
Anti-theft device
Student away at school
Passive restraint
Usage-based
Military Discount
Military discount

In addition, discounts on car insurance aren’t always the same from one area to the next. Before committing to a policy, make sure you’ve explored all of the discounts available to you by consulting with an insurance representative.

USAA vs State Farm: Claims Handling

When comparing USAA vs. State Farm, USAA comes out on top when it comes to car insurance claims. Even though State Farm’s rating is higher than the national average for auto insurers, it still places it below the industry’s top four competitors. When comparing USAA and State Farm, we see that 74% of respondents are entirely satisfied with the manner in which their claim was addressed by USAA, while just 67% say the same about State Farm.

USAA vs. State Farm: Usage-Based Insurance

Usage-based insurance (UBI) schemes from both USAA and State Farm reward safe drivers with premium reductions. To track things like speeding, accelerating quickly, and stopping suddenly, UBI apps use data gathered from your mobile phone or other connected devices to track car telemetry. Users who demonstrate a history of safe driving may be eligible for a premium reduction.

USAA SafePilot®State Farm Drive Safe & Save™
DeviceMobile appMobile app, OnStar, FordPass™, Lincoln Way™
41 statesNoYes
Availability41 States41 states
DiscountUp to 30%Varies
What It MonitorsSpeed, acceleration, braking, swerving, cornering, distance, location, phone use and moreDistracted driving, hard braking, cornering, smoothness, annual mileage, time of day and acceleration

Except for the states of California, Delaware, Indiana, Massachusetts, New Jersey, New York, North Carolina, Vermont, and Wisconsin, USAA’s SafePilot is available everywhere else. 

State Farm’s Drive Safe & Save program is more widely accessible than SafePilot. Participants can be licensed drivers in any state besides California, Massachusetts, and Rhode Island. North Carolina motorists may find themselves with a limited selection.

USAA vs State Farm Home Insurance

USAA and State Farm are both well-known insurance companies that offer home insurance policies in the United States. When comparing USAA and State Farm home insurance, several factors come into play.

USAA:

USAA primarily caters to military members, veterans, and their families. Their home insurance policies often come with competitive rates and excellent customer service. USAA is renowned for its exceptional customer satisfaction ratings, personalized service, and a range of discounts for policyholders. They offer coverage for standard perils, additional living expenses, personal property, and liability protection.

State Farm:

State Farm is one of the largest insurance providers in the country, serving a diverse customer base. They offer a wide array of home insurance options, customizable to meet individual needs. State Farm policies cover dwelling protection, personal property, liability coverage, and additional living expenses. State Farm is known for its extensive network of agents, making it easy for customers to access in-person assistance and personalized advice.

When choosing between USAA and State Farm, it’s essential to consider factors such as customer service, coverage options, premiums, and discounts. USAA may be a better choice for military members and their families due to its specialized focus, while State Farm offers broader accessibility and a vast network of agents, appealing to a wider demographic. It’s advisable to compare quotes, read policy details carefully, and consider individual needs and preferences before making a decision on home insurance.

USAA vs. State Farm Home Insurance Cost Comparison

Homeowners’ insurance typically runs about $101 monthly. However, insurance rates and premiums can change depending on a variety of factors, such as a person’s claims history, credit score, the state of the insured’s home, the prevalence of crime in the area, the level of coverage selected, and the insurance company itself.

To discover how USAA and State Farm compare to the national average, we sought out the firms for estimates.

USAA Cost

Coverage amounts for dwelling, other structures, personal property, and loss of use were computed after the rebuilding cost of a hypothetical home was estimated to be $329,000. We opted for the minimum required by law for liability, medical payments, and deductibles, as well as the typical amounts for credit card, supplemental loss, and commercial property coverage.

Type of CoverageAmount of Coverage
Dwelling$329,000
Other structures$32,900
Personal property$164,500
Loss of use$65,800
Liability$300,000
Medical payments to others$5,000
Credit card and forgery$500
Supplemental loss assessment$1,000
Business property$2,500
Deductible (all other perils/wind and hail)$1,000/$1,000
Monthly cost$151.17

Home Insurance premiums can be lowered by taking advantage of five of USAA’s discounts:

  • Bundling insurance policies
  • Being claims-free
  • Having home security systems
  • Insuring your home for the full amount of the rebuilding cost
  • Buying a new home

State Farm Cost

State Farm’s quote system is quite similar to USAA’s; the amount of coverage for the home itself, other structures, personal property, and loss of use is based on the cost to rebuild, while the amount of coverage for liability, medical payments, and deductibles is set by the policyholder.

Type of CoverageAmount of Coverage
Dwelling$250,000
Other structures$25,000
Personal property$125,000
Loss of use$50,000
Liability$300,000
Medical payments to others$1,000 per person
Deductible$1,000
Monthly cost$122
Based on pricing information from The Zebra

State Farm offers a few discounts to help lower your home insurance premium:

  • Multiple line
  • Home alert protection
  • Roofing

What Are the Disadvantages of USAA?

While USAA is widely praised for its excellent customer service and specialized offerings for military members and their families, there are a few disadvantages to consider:

  • Limited Membership: USAA membership is restricted to military members, veterans, and their families. If you don’t meet these criteria, you cannot access their services, which limits its availability to the general public.
  • Limited Physical Locations: USAA operates mainly online and over the phone, which can be a disadvantage if you prefer in-person interactions. They have a limited number of financial centers and ATM locations compared to traditional banks.
  • Potential Higher Premiums: Some customers have reported slightly higher premiums compared to other insurance providers. While USAA often provides competitive rates, individual factors such as location and specific coverage needs can lead to higher costs for some policyholders.
  • Limited Product Offerings: USAA’s primary focus is on insurance, banking, and financial services. They may not offer the same variety of products and services as larger, more diversified financial institutions.
  • Claims Handling Challenges: While USAA generally receives positive feedback for claims handling, some customers have reported delays or difficulties in the claims process, leading to occasional dissatisfaction.

Prospective clients should consider these drawbacks in light of USAA’s many advantages. Before deciding if USAA is the best option for you, think about your requirements and preferences.

Why Is USAA So Expensive?

USAA’s insurance premiums can sometimes appear higher due to several factors:

  • Specialized Coverage: USAA provides specialized coverage tailored to military members and their families, including unique features and benefits. This specialized coverage can come at a higher cost compared to standard insurance policies.
  • Targeted Customer Base: USAA primarily serves military personnel and their families, a demographic that might have specific risk profiles. Certain military-related factors, such as deployments or frequent relocations, can influence premiums, potentially leading to higher costs.
  • Comprehensive Coverage: USAA offers comprehensive coverage options, and customers often choose higher coverage limits or additional features, which can increase premiums.
  • Risk Factors: Individual risk factors, such as the location of the insured property, previous claims history, and credit score, can impact insurance premiums. Areas prone to natural disasters or with higher crime rates may have higher premiums to compensate for increased risks.
  • Customer Service and Benefits: USAA is known for its exceptional customer service and various member benefits. While these services enhance customer satisfaction, they can contribute to slightly higher premiums to support the overall customer experience.
  • Limited Pool of Customers: USAA’s membership is limited to military members, veterans, and their families. With a smaller customer base, the risk pool is limited, which can affect premium pricing.

In order to find the best value for their needs and budget, prospective policyholders need to compare quotations from numerous insurance companies, giving careful consideration to the coverage options and quality of customer service offered by each. In addition, the insurance rates you pay depend on a number of factors, so it’s smart to shop around before settling.

Who Is State Farms Biggest Competitor?

State Farm’s main rival is Allstate. Both are well-established names in the insurance market, and their offerings span the gamut from car and home protection to health and life coverage. They compete fiercely with major US property and liability insurance providers in market share and customer base.

Geico, Progressive, and Nationwide are three additional major rivals in the auto insurance market. These companies are formidable rivals to Allstate because of their innovative marketing strategies, accommodating payment policies, and warm customer service.

Is It Better to Own an Allstate or State Farm?

The choice between Allstate and State Farm insurance ultimately depends on your individual needs, preferences, and specific circumstances. Both companies are reputable and well-established insurers, each with its strengths and weaknesses. Here are a few factors to consider when making your decision:

Allstate:

  • Allstate is known for its variety of insurance products and services, including auto, home, life, and more.
  • They offer innovative features like Claim Satisfaction Guarantee, Safe Driving Bonus, and the Drivewise program, which tracks driving behavior for potential discounts.
  • Allstate has a large network of agents and offices, providing in-person support and assistance.

State Farm:

  • State Farm is one of the largest insurers in the U.S., offering a range of insurance and financial products.
  • They have a vast network of agents, making it easy to find local, personalized assistance.
  • State Farm is known for its excellent customer service and comprehensive coverage options.

However, in order to choose the best provider, you need to think about things like the coverage you require, your budget, your preferred level of customer service, and any special features or discounts that are vital to you. Getting price estimates from both companies will help you choose the one that is best suited to your requirements.

Is USAA Hard to Deal With?

USAA is generally known for its excellent customer service and high customer satisfaction ratings. Many policyholders appreciate the personalized attention, prompt responses, and helpfulness of USAA representatives. However, like any large organization, individual experiences can vary based on specific circumstances, such as the complexity of the issue, the individual representative handling the case, or the customer’s expectations.

While the majority of USAA customers have positive experiences, some individuals may encounter challenges or find certain processes more complex than expected. It’s essential to communicate your concerns clearly, be patient, and persist in seeking assistance if you encounter difficulties. Additionally, utilizing online resources, such as the USAA website and mobile app, can often streamline common tasks and provide helpful information.

Overall, USAA is committed to providing excellent customer service, but individual experiences may differ. The best way to get answers to your questions or resolve your problems is to contact USAA directly.

What Types of Car Insurance Do State Farm and USAA Offer?

If State Farm and USAA operate in your area, you should be able to obtain insurance that at least satisfies the legal minimums in your state. And, when it comes to the sorts of car insurance offered, the providers are relatively compatible. Liability, collision, and comprehensive coverage, as well as choices for teenage drivers and coverage for rental cars, vintage cars, and ridesharing vehicles, are all available from both firms’ auto insurance offerings.

USAA vs State Farm: Bottom Line

USAA and State Farm both provide all-inclusive car and house insurance policies at costs well below the market norm. Both insurance providers have high ratings for reliability and consumer happiness. There are some key differences between USAA and State Farm auto and home insurance, including available discounts and policy riders. These factors can help you determine which service provider is most suited to fulfill your requirements.

Frequently Asked Questions

Is USAA only for military?

Yes, since USAA only accepts military members, you must be a military family to buy auto insurance.

How can I join USAA without military?

You may qualify if you are a spouse, parent (including stepparent or legal guardian), or family member. One or both of your parents must have had USAA coverage for you to be able to join USAA.

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