American Family vs. State Farm Car Insurance (2021)

Our American Family vs. State Farm car insurance guide will help you decide between two great companies when taking into consideration your unique factors such as age, driving record, and credit score. Rates are similar in comparison, but State Farm is better for drivers with a bad driving record. American Family has a stronger financial outlook. Which is better? Continue reading to decide for yourself.

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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: Feb 22, 2021

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Here's what you need to know

  • American Family and State Farm are competitive when it comes to customer satisfaction through the claims process.
  • State Farm has a lower customer complaint ratio than American Family.
  • Car insurance rates with American Family and State Farm are similar; however, State Farm has lower car insurance rates overall and for male teen drivers.
  • State Farm has the highest financial stability rating from A.M. Best and offers higher discounts than American Family.
  • American Family has better rates for drivers with a low credit score, but if you have a bad driving record, State Farm is a good option.

In our American Family vs. State Farm 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 insurance and State Farm auto insurance, or enter your ZIP code to start comparing multiple companies in your local area.

Is American Family car insurance or State Farm 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’s auto insurance rates and State Farm’s auto insurance rates based on age, gender, and marital status.

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American Family and State Farm have fairly competitive rates. State Farm rates are up to 10 percent cheaper than American Family rates. State Farm does give young male drivers a break compared to American Family.

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Is American Family car insurance or State Farm 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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State Farm has slightly higher rates for drivers with a speeding ticket but lower rates than American Family if you have an accident or DUI on your record.

Compared to a driver with a clean record, American Family rates for having a speeding ticket, accident, or DUI on your record will increase by 12 to 61 percent.

State Farm, however, is more forgiving when its drivers have infractions added to their driving record. Drivers that get a speeding ticket, cause an accident, or get a DUI will see their rates increase by only 13 to 29 percent in comparison to a driver with a clean record.

In general, if you have any occurrences on your driving record, State Farm is the best option for you.

Is American Family car insurance or State Farm 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 State Farm address rates for drivers with varying credit scores.

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Car insurance rates with State Farm are generally lower than American Family unless you have poor credit — then you will pay more.

However, American Family is a little more lenient than State Farm when it comes to credit scores that drop over time. Drivers with State Farm that have poor credit will pay over twice as much as a driver with good credit.

If you have a bad credit history, State Farm is a better choice initially; but, if you anticipate your credit score dropping, you may want to consider changing companies.

Before you choose American Family or State Farm, 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 State Farm have better car insurance discounts?

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

Unfortunately, our source includes only three American Family car insurance discounts: defensive driver, airbags, and using their driving device or app.

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But, with State Farm, you can save 30 to 50 percent by having a short commute, driving a newer vehicle, having airbags, or using their driving app or device.

So it really makes a difference if you look into all of the discounts offered by every car insurance company.

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Does American Family or State Farm 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 State Farm’s
Drive Safe & Save usage-based car insurance apps in our American Family company review and our State Farm company review.

But if you really prefer talking to someone about your car insurance needs, call the company directly. Who knows? Maybe Jake from State Farm will answer.

How do American Family and State Farm 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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Both companies have a strong financial future, but State Farm carries the highest rating from A.M. Best. Additionally, both American Family and State Farm are competitively rated when it comes to customer satisfaction with the claims process.

However, State Farm has a slightly lower customer complaint ratio.

When you’re unsure which company to choose, you can always use our FREE comparison tool to compare American Family vs. State Farm car insurance to other companies in your area to find the best car insurance quotes for your car insurance rates.

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