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When it comes to car insurance, two of the biggest names in the industry are American Family Insurance and State Farm. But which one is the better choice for your needs? In this article, we’ll compare and contrast American Family and State Farm’s auto insurance offerings so you can make an informed decision.
Overview of American Family Insurance
Founded in 1927, American Family Insurance is the nation’s 13th largest property/casualty insurance group. The company sells auto, homeowners, life, business, farm/ranch insurance and more. Some key facts:
- Available in 19 states, primarily in the Midwest and Southeast regions
- Over 4,600 exclusive agents nationwide
- A.M. Best financial strength rating of A (Excellent)
- Over 6 million policies in force
American Family takes pride in its customer service and works to tailor policies to each customer’s unique needs. The company has won numerous awards and honors for its claims service, including the J.D. Power award for customer satisfaction.
Overview of State Farm Insurance
State Farm is the #1 insurer of autos and homes in the U.S. The company was founded in 1922 and now serves over 83 million policies. Some vital facts:
- Available in all 50 states
- Over 19,000 agents nationwide
- A.M. Best rating of A++ (Superior)
- Over 29 million auto policies in force
State Farm is known for its extensive agent network, 24/7 claims service, and many discounts The company has a focus on local community support, auto safety features, and innovative technology State Farm often touts its 97% customer satisfaction rating.
Auto Insurance Offerings Compared
When it comes to their car insurance products here’s how American Family and State Farm stack up
Coverage Options
- Both companies offer standard coverages like liability, collision, comprehensive, medical payments, and uninsured/underinsured motorist. Plus, additional options like roadside assistance and rental reimbursement.
Discounts
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American Family offers discounts for bundled policies,paperless billing, good driving,affinity membership, anti-theft devices, and more.
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State Farm discounts include good driver, safe vehicle, multiple policies, student away from home, anti-theft, and automatic payment enrollment.
Usage-Based Insurance Programs
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American Family’s program is called KnowYourDrive. It uses an app or plug-in device to track driving habits.
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State Farm’s Drive Safe & Save monitors driving through a smartphone app or OnStar.
High-Risk Drivers
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American Family will work with some high-risk drivers, assigning them to specialized agents. Rates may be higher.
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State Farm’s options for high-risk drivers vary by state. Drivers can be assigned to the specialty Titanium package in some areas.
Gap Insurance
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American Family includes gap coverage in certain auto policies automatically for new cars. It can also be added onto other vehicles for an additional cost.
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State Farm’s gap insurance, called Auto Loan Protection, can be added to a policy to cover the difference between the car’s value and remaining loan balance if it’s totaled. There’s an extra charge for this coverage.
Rideshare Coverage
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American Family offers rideshare coverage as an endorsement in some states, providing coverage during the rideshare period.
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State Farm has rideshare coverage available nationwide. It fills in the gaps between personal and rideshare insurance.
Additional Products Offered
Aside from auto insurance, American Family and State Farm also provide other policies:
American Family
- Home insurance
- Life insurance
- Business insurance
- Farm/ranch insurance
- Specialty products like identity theft and travel insurance
State Farm
- Homeowners insurance
- Renters insurance
- Condo insurance
- Personal liability umbrella policies
- Life insurance
- Banking and financial services
- Health insurance (in select states)
So when it comes to overall product selection, State Farm offers a wider range of non-auto insurance options. American Family focuses more heavily on property, auto, and life products.
Financial Strength Ratings
When choosing an insurance company, you want one that’s financially stable with a good reputation for paying out claims. Third-party rating agencies assess insurers’ financial strength:
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American Family: A (Excellent) rating from A.M. Best
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State Farm: A++ (Superior) rating from A.M. Best, the highest available
State Farm’s superior rating indicates it has a stronger ability to pay out insurance claims. American Family is still rated quite well, but State Farm edges them out in terms of financial strength assessments.
Customer Satisfaction Comparison
Insurance is a very customer service oriented industry. Here’s how American Family and State Farm grade out in terms of customer satisfaction:
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American Family: Received high marks for claims process and customer service from J.D. Power. However, didn’t score quite as high on pricing satisfaction.
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State Farm: Has maintained an excellent 97% customer satisfaction rating based on their own internal surveys. Has achieved high ratings from J.D. Power over the years.
Both insurers provide excellent customer service overall. However, State Farm edges out American Family slightly when it comes to customer satisfaction feedback and ratings.
Geographical Availability
One important consideration is availability in your state.
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American Family: Offers insurance in 19 states, mostly concentrated in the Midwest and Southeast regions.
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State Farm: Has availability nationwide in all 50 states.
So State Farm definitely has the advantage here in terms of widely available service across the U.S. American Family does have strong regional presences in areas where it operates, however.
Pricing and Discounts
Pricing can vary quite a bit between insurers based on your location, driving record, age, type of car, and other factors. Here are some notes on discounts and costs:
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American Family: Tends to offer competitive base rates on auto insurance tailored to your specifics. Lots of discounts are available to help lower premiums.
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State Farm: Known for bundling discounts that can save you up to 30%. But base rates on auto insurance are frequently reported to be a little higher than some competitors.
To get an accurate read on pricing, you really need to get quotes customized to your situation. But be sure to ask both companies about all available discounts to help lower your costs.
Technology and Convenience
Insurers today provide apps and online services for increased convenience:
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American Family: Features a useful mobile app and online account access 24/7. Pay bills, file claims, access ID cards, and more. Decent reviews of the technology experience.
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State Farm: Also has a highly-rated mobile app and website. File claims instantly, pay your bill, set up recurring payments, and access virtual ID cards. One of the best insurers for technology.
The technology offerings are quite similar. Both American Family and State Farm invest significantly in digital tools to provide convenience and mobile access.
Our Recommendation
Overall, State Farm does come out slightly ahead in most categories except regional availability. The stellar financial strength ratings, broad coverage options, discounts, customer satisfaction, and technology give State Farm an edge. However, American Family provides outstanding claims and customer service for its 19-state area. We suggest getting quotes from both companies to compare pricing and coverage. Consider bundling home or life insurance for the best deal. For most drivers across the U.S., State Farm may be the best bet for those looking for national insurers with strong financials and all the right coverages. But American Family also deserves consideration for its competitive pricing and great service.
American Family vs. State Farm: Average Rates by Gender
| American Family | State Farm | |
|---|---|---|
| Male | $143 | $164 |
| Female | $138 | $152 |
Men are statistically more likely than women to get into an accident or get pulled over for speeding. That means when it comes to auto insurance men will usually end up paying a little more.
Aflac charges men $5 more per month than women, and State Farm charges men $12 more per month.
When it comes to overall affordability, American Family has the most reasonable average rates for both men and women, with premiums that are 9% cheaper for women and 3% less for men.
Find your best rate in just a few minutes
American Family or State Farm: Compare State Minimum vs. Full Coverage Rates
| American Family | State Farm | |
|---|---|---|
| State Minimum* | $96 | $99 |
| Full Coverage** | $185 | $216 |
*State minimum value indicates liability-only policies at each states minimum bodily injury and property damage (BI/PD) limits
**Full coverage indicates state minimum BI/PD limits with collision and comprehensive coverages added to policy.
For most people, car insurance isnt the easiest topic to understand. You might find it hard to choose the right policy because there are so many options and terms.
You can choose between two main types of insurance policies: liability only and full coverage. Liability only covers damage to other drivers’ property and injuries to passengers and drivers who are in an accident caused by you, while full coverage usually includes comprehensive and collision coverages as well.
If you want to know what the state’s minimum liability limits are, American Family usually charges $96 instead of $99, which is a little less. Again, American Family has the better full coverage policies with similar limits. On average, their policies cost $30 less a month than State Farm policies.
State Farm Car Insurance Review for 2024 (The Good & Bad)
FAQ
Why is American family insurance so expensive?
What is the #1 insurance in America?
Does American family insurance pay claims well?
Are American family insurance rates competitive?
Which is better American family or State Farm?
State Farm usually offers lower rates than American Family. State Farm offers full coverage insurance for an average of $1,482 per year and American Family provides full coverage for $1,496 annually. The cost of state minimum coverage from State Farm is $435 per year and American Family offers state minimum coverage for $631 annually.
How much does State Farm Insurance Cost?
The cost of state minimum coverage from State Farm is $435 per year and American Family offers state minimum coverage for $631 annually. However, it’s still a good idea to get quotes from both companies though to see what’s better for your specific situation.
What is the difference between State Farm & American family car insurance?
State Farm’s car insurance rates for drivers with a clean record are lower than the national average, while American Family’s insurance rate is higher than the national average. An individual’s driving history with accidents, tickets, and other incidents can raise rates.
Are state Farm auto insurance rates higher than the national average?
Compared to the national average insurance rates for male and female adult drivers, State Farm’s rates are lower. However, rates for both males and females are the same (usually, female rates are lower). American Family’s auto insurance rates are higher than the national average.