American Family Insurance vs. USAA Car Insurance: Expert Recommended (2024)

American Family Car Insurance

Pros:

• Pricing Structure: Offers competitive rates and sometimes substantially cheaper in certain states compared to the state average.
• Discount Programs: Provides various discounts, such as the Dreams Restored Program, enhancing affordability.
• Claims Process: Offers convenient options for filing claims both online and via phone, with positive customer feedback on claim resolutions.
• Digital Features: Comprehensive mobile app and online account management capabilities for easy policy management.

Cons:

• Mixed State Performance: Pricing can be hit or miss, with rates sometimes higher than competitors in certain states.
• Limited Eligibility: Available to the general public, not exclusive to a specific community like the military.

USAA Car Insurance

Pros:

• Competitive Pricing: Generally offers competitive rates, often substantially cheaper than other companies across various states.
• Military-Focused: Tailored specifically for military personnel and their families, known for higher customer satisfaction.
• Discount Programs: Offers mileage-based discounts and provides various savings opportunities.
• Financial Stability: Achieved a top-notch rating (A++) from A.M. Best, reflecting strong financial stability.

Cons:

• Limited Eligibility: Exclusive to the military community, restricting access to the general public.
• BBB Rating: Received a suboptimal rating (B-) from the Better Business Bureau, indicating potential issues in customer service or business practices.

Best Car Insurance Provider: USAA Car Insurance

When evaluating car insurance companies like American Family Insurance and USAA Car Insurance, it’s crucial to consider various aspects beyond just pricing. However, when assessing rates and the breadth of what they offer, USAA Car Insurance emerges as the superior choice for most consumers.

Competitive Pricing: In most states, USAA offers substantially lower rates compared to American Family and other major insurers. Notably, in Idaho, USAA’s rates are about 50% cheaper than American Family.

Special Discounts: USAA provides unique discounts tailored to changing lifestyles, such as discounts based on mileage for drivers aged 29 and above, which can significantly lower premiums, especially for those working remotely due to the COVID-19 pandemic.

Customer Satisfaction: USAA consistently ranks higher in customer satisfaction surveys, particularly among the military community and veterans, reflecting a commitment to exceptional service and coverage.

Financial Stability: Despite a slightly lower BBB rating (B-) compared to American Family, USAA boasts an impressive A++ rating from A.M. Best, signifying strong financial stability and reliability.

Target Market: While USAA is limited to military personnel, veterans, and their families, its specialized services and exceptional offerings make it the preferred choice within its niche (read our “Best Car Insurance for Veterans” for more information).

While American Family Insurance has its merits, including sporadic affordability in certain states and the Dreams Restored Program, USAA’s consistent affordability, tailored discounts, high customer satisfaction, and financial stability make it the superior choice overall.

American Family

Established in 1927 by Herman Wittwer as Farmers Mutual Automobile Insurance Company in Madison, Wisconsin, the company started by providing auto insurance to farmers in the region. Over time, it expanded its offerings beyond auto insurance to include home, renters, business, and life insurance products.

In 1963, the company changed its name to American Family Mutual Insurance Company, representing its broader scope. American Family Insurance has grown steadily, becoming one of the largest mutual property and casualty insurance companies in the United States.

With a commitment to customer-centric service and community involvement, American Family has built a reputation for stability and reliability in the insurance industry.

USAA 

Founded in 1922 by a group of Army officers who struggled to find insurance due to their occupation, the United Services Automobile Association (USAA) initially provided auto insurance to military officers. What began as a small association in San Antonio, Texas, has evolved into a comprehensive financial services provider catering primarily to the military community and their families.

Over the years, USAA expanded its services to include not only car insurance but also banking, investment, and retirement products. With a strong emphasis on serving those who serve the nation, USAA has garnered a reputation for exceptional customer service, financial stability, and tailored offerings to meet the unique needs of military personnel and veterans.

What can USAA do for you?

Let’s start with something that’s probably pretty important to you: pricing structure. Let’s take a look at a table that shows rates for the 10 main insurers in the country in each and every state.

Average Monthly Car Insurance Rates Comparison for Top 10 Companies by State

Take note of the difference between American Family’s prices and USAA’s. Occasionally, USAA is more expensive than American Family, like in Kansas.

However, the vast majority of the states show that USAA is substantially cheaper than American Family as well as numerous other shown companies. For instance, look at Idaho, where USAA is about a whopping 50 percent cheaper than American Family.

Speaking of price, always accumulate as many special car insurance discounts as you can. In the age of COVID-19, you may be working from home. Inform your insurance agent of this and see if they have a program to lower your rates since you’ll be on the road less. Does USAA offer auto insurance discounts like this?

They do! USAA will give a discount on premiums based on the number of miles the insured drives in a given year. All you have to do is be age 29 or above and plug a USAA-provided device into your vehicle.

What can American Family Insurance do for you?

Another way to analyze a company’s pricing structure is to compare its rates to the state average. Let’s take a look at a table to see if American Family Insurance’s rates are better than your state’s average.

American Family Average Monthly Car Insurance Rates Compared to State Average

All in all, it’s pretty hit or miss. On the plus side, however, in the states where American Family is cheaper than the state average, it can be much cheaper. Take a look at Wisconsin, where American Family is a staggering 138% cheaper than the state average.

Remember how we discussed accumulating discounts? One such discount from American Family is the Dreams Restored Program.

This program finds the cheapest auto body shop located within your area, should the need arise.

Read more: How long does it take for American Family to process a car insurance claim?

Comparison of Claim Processes: American Family Insurance vs. USAA Car Insurance

Ease of Filing a Claim

When it comes to filing a claim with American Family Insurance and USAA Car Insurance, both companies offer a variety of convenient options. Policyholders can easily file claims online through the respective websites or dedicated mobile apps, ensuring a hassle-free and efficient process. Additionally, claims can also be filed over the phone for those who prefer a more traditional approach.

Average Claim Processing Time

The average claim processing time for both American Family Insurance and USAA Car Insurance is competitive and varies based on the nature and complexity of the claim. While specific processing times may differ, both companies strive to expedite the claims process to provide timely assistance to their policyholders.

Customer Feedback on Claim Resolutions and Payouts

Customer feedback on claim resolutions and payouts for both American Family Insurance and USAA Car Insurance is generally positive. Both companies are known for their commitment to customer satisfaction and work diligently to resolve claims fairly and efficiently. Policyholders often express satisfaction with the fairness of payouts and the overall claims experience.

Read more: How does USAA handle claims involving hit-and-run accidents?

Exploring Digital and Technological Features: American Family Insurance vs. USAA Car Insurance

Mobile App Features and Functionality

Both American Family Insurance and USAA Car Insurance offer comprehensive mobile apps equipped with a wide range of features and functionalities. These apps empower users to manage their insurance policies, file claims, access digital ID cards, and even monitor safe driving behaviors.

The user-friendly interfaces make it convenient for customers to handle their insurance needs conveniently on the go.

Online Account Management Capabilities

American Family Insurance and USAA Car Insurance provide robust online account management capabilities through their respective websites. Policyholders can easily log in to their accounts to view policy details, make payments, update personal information, and track the progress of their claims. These online platforms enhance the convenience of managing insurance policies.

Digital Tools and Resources

Both companies offer a wealth of digital tools and resources designed to assist their customers. These resources may include insurance calculators, educational materials, and resources to help policyholders better understand their coverage options. By leveraging these digital tools, policyholders can make informed decisions about their insurance needs.

How are USAA and American Family rated?

When you’re trying to decide if a company is right for you, you want to know that they’re going to be around for the long haul.

A good way to know this is to look at the reviews given by A.M. Best and the Better Business Bureau. Let’s take a look at a table showing these ratings for American Family, including some consumer complaint data.

American Family Car Insurance Company Ratings

As you can see, both A.M. Best and the BBB gave American Family an A rating. Not too shabby, right? Let’s see how USAA measures up.

USAA Company Ratings

As you can see, USAA scored a terrific A++ rating from A.M. Best. This is highly encouraging. However, the Better Business Bureau gave them a suboptimal rating of B-.

This all goes to show that you need to be thorough when comparing and contrasting companies. And, again, we want to stress how important it is that you ask questions about discounts. Any discount you think could apply to you, get.

Get a start on finding appealing auto insurance rates by typing your ZIP code into our free and helpful tool below. Which auto insurance company is for you? Find out now.