American Family vs. USAA Car Insurance [2021]

Our American Family vs. USAA car insurance guide will help you decide between two great companies based on age, driving record, and credit score. But, there is a catch — USAA car insurance is available only to active and retired military and their family members. However, American Family offers competitive discounts. Continue reading to decide for yourself which company is the best choice.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Mar 23, 2021

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Here's what you need to know

  • USAA car insurance is available only to active and retired military and their family members.
  • USAA’s rates will always be 20 to 30 percent cheaper than that of other car insurance companies.
  • American Family offers a higher discount for using its driving app than USAA.
  • American Family doesn’t have a military or garaging discount.

Both American Family and USAA are good choices, but what is USAA? What does USAA stand for? Is there a catch? yes.

USAA stands for United Services Automobile Association — which means any branch of the military is eligible. A car insurance policy with this company is available to only active and retired military and their family members.

In our American Family vs. USAA car insurance guide, we examine rates by your specific demographics: age, gender, marital status, driving record, and credit score. We also compare discounts offered by both companies and ratings from credible agencies that rate all of the best car insurance companies.

Keep reading to compare American Family auto insurance and USAA auto insurance, or enter your ZIP code to start comparing affordable car insurance companies in your local area.

Is American Family car insurance or USAA car insurance cheaper based on age?

The more we drive in a variety of situations and the longer we drive, the safer and more aware we become when behind the wheel. For this reason, car insurance companies use age as one of the most influential factors in quoting your car insurance rates.

In most states, it’s legal to base car insurance rates on marital status and gender; however, some have banned it. Let’s compare American Family insurance and USAA insurance rates based on age, gender, and marital status.

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Generally, expect USAA rates to be about 25 to 30 percent cheaper than most other car insurance companies.

Car insurance for teen drivers will always be high. Why? They have limited time behind the wheel and their brains are not developed enough to make the best decisions.

With that said, American Family’s rates for teens are around 30 percent higher than drivers older than 25 no matter what company you choose.

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Is American Family car insurance or USAA car insurance cheaper based on driving record?

Speeding tickets, accidents, or DUIs on your driving record will raise your car insurance rates no matter what company you pick because you become a higher risk driver.

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When it comes to rates by driving record, USAA’s rates are about half the amount of American Family’ rates.

However, USAA takes accidents and DUIs much more seriously. Rates with USAA will increase 30 to 81 percent if you are in an accident or get a DUI while carrying a policy.

Rates with American Family will increase 12 to 61 percent if you are in an accident or get a DUI while carrying a policy.

Is American Family car insurance or USAA car insurance cheaper based on credit score?

If you experience some type of financial trauma such as medical debt or going through a divorce, a good credit score can drop in a matter of months.

In most states it’s legal for car insurance companies to factor in your credit score when determining your rates; however, some are banning this along with factoring in gender and marital status.

Based on the assumption that those with higher credit scores are more responsible and overall safer drivers less likely to file a claim, car insurance companies justify using your credit score to determine your rates.

Let’s take a look at how American Family and USAA address rates for drivers with varying credit scores.

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Again, USAA will always have cheaper rates than other car insurance companies.

Rates with American Family will increase 18 to 66 percent if your credit score drops significantly while carrying a policy.

Rates with USAA will more than double if your credit score drops significantly while carrying a policy.

Before you choose American Family or USAA, read about car insurance laws in your state and examine rates from a variety of companies by reading your state car insurance guide.

It may be that basing car insurance rates on gender, marital status, and/or credit score has been outlawed in your state.

Does American Family or USAA have better car insurance discounts?

A car insurance company often determines discounts based on its philosophy and values. Therefore, if you have a bad driving record or low credit score, getting good discounts will offset your high rates.

USAA has more discounts than American Family based on our records, but it never hurts to ask to make sure you’re taking advantage of as many discounts as possible.

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American Family offers discounts of 10 to 40 percent for having defensive driver training, airbags, and using their driving device or app.

To note, American Family and USAA both offer up to a 20 percent discount for using its driving app or driving device.

USAA may offer lower discounts, but the ones they do offer are pretty good. You can save 10 to 12 percent by being a family legacy, signing early, driving a newer vehicle, being claim-free, and being a safe driver.

And, with USAA, if you are an active military member and get deployed, you will get a 90 percent discount for garaging your vehicle while you are away.

Our records show that American Family doesn’t have a military or garaging discount, but it still pays to get a quote because car insurance companies are offering new discounts daily to compete with other companies.

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Does American Family or USAA have better car insurance mobile apps?

Usage-based car insurance has become a hot trend in the car insurance industry in the last decade or so, and all of the larger car insurance companies have a driving app that uses your mobile phone or a device installed into your vehicle.

Large car insurance companies also provide a more general app to enable you to pay your bill, make changes to your coverage levels, and use it for electronic verification of insurance in states that permit it.

Read about American Family’s KnowYourDrive and USAA’s SafePilot usage-based car insurance apps in our American Family company review and our USAA company review.

How do American Family and USAA car insurance compare in financial strength and customer satisfaction?

Purchasing car insurance is an important financial responsibility, so you want to make sure you’re selecting the appropriate company that will be there for you when you need it most.

A company’s financial strength, customer satisfaction with the claims process, and customer complaints should be reviewed prior to making your decision.

The following three agencies provide insight into these factors:

A.M. Best scores companies based on their ability to meet their ongoing insurance obligations such as balancing premiums collected and claims paid. The highest score A.M. Best awards is Superior A++.

Consumer Reports collects annual data from its subscribers regarding customer satisfaction of the claims process, step by step. In their 2017 survey, 27 insurance companies were rated, and scores ranged between 86 to 96.

And the National Association of Insurance Commissioners (NAIC) calculates a complaint ratio based on the total number of customers against the total number of complaints. In 2017, the national average complaint ratio was 1. The lower the ratio, the better.

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As determined by A.M. Best rating, American Family comes in strong with an excellent rating, but USAA has the highest possible rating.

The two companies are also highly competitive when it comes to customer complaint ratio. Both are below 1.0, which is a good sign of customer satisfaction.

Also a strong sign of customer satisfaction through the claims process, USAA has a much higher score than American Family from Consumer Reports.

Ready to buy car insurance? When you’re unsure which company to choose, you can always use our FREE comparison tool to compare American Family vs. USAA car insurance to other companies’ car insurance quotes in your area.

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