If you’re shopping for homeowners insurance, two big names you’re likely to encounter are USAA and State Farm. Both companies have strong reputations, but there are some key differences between them as well.
In this in-depth guide, we’ll compare USAA and State Farm on important factors like:
- Cost of coverage
- Discounts offered
- Claims satisfaction
- Financial strength
- Features and add-ons
- Availability and eligibility
Understanding how these two leading insurers stack up can help you make an informed choice on the right homeowners insurance provider for your needs and budget.
Cost of Coverage: Who Offers Cheaper Rates?
On average, State Farm tends to offer slightly lower homeowners insurance rates than USAA. Here’s how they compare:
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USAA: Typical annual premiums range from $800 to $2,500 nationwide, averaging about $1,500 per year.
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State Farm: Average annual premiums span $500 to $2,000, with a nationwide mean of approximately $1,200 per year.
However, the cost difference between the two companies can vary significantly based on factors like your location, amount of coverage, and eligibility for discounts.
To get an accurate comparison, it’s best to get quotes directly from both insurers based on the specifics of your property and policy needs. Pricing can be quite competitive between USAA and State Farm.
Discounts Offered
Both USAA and State Farm offer a range of discounts that can lower your homeowners insurance costs. Here are some common savings opportunities with each company:
USAA Homeowners Discounts
- Multi-policy discount
- New home discount
- Security system discount
- Smart home discount
- Claim-free discount
- Good payer discount
State Farm Homeowners Discounts
- Multi-line discount
- New home discount
- Protective devices discount
- Seniors discount
- Loss-free discount
- Continuous policy discount
The specific discounts you qualify for will depend on your policy details and eligibility criteria. But both insurers provide multiple opportunities to save money through discounts.
Claims Satisfaction and Payments
The responsiveness, customer service, and claim payments process can vary between insurance companies. Here is how USAA and State Farm compare:
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USAA: Consistently earns high marks for claims satisfaction based on policyholder surveys. Known for excellent customer service and fast claim resolution. Paid out approximately $2.7 billion in homeowners claims in 2021.
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State Farm: Also scores well in claims satisfaction ratings, although not quite as high as USAA. Has a reputation for good customer service during the claims process. Paid out $5.4 billion in homeowners claims in 2021.
Both insurers have a track record of responsive claims handling and paying out billions in home insurance claims per year. USAA frequently earns the highest customer satisfaction marks though.
Financial Strength and Stability
You want to ensure your insurance company will have the financial resources to pay out claims now and in the future. Here are the ratings for USAA and State Farm:
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USAA: Rated A++ (Superior) by A.M. Best and AA+ (Very Strong) by Fitch. Extremely strong financial position.
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State Farm: Rated A++ (Superior) by A.M. Best and AA+ (Very Strong) by S&P Global Ratings. Also maintains excellent financial strength.
Based on independent rater assessments, both USAA and State Farm are in equally strong financial standing to pay claims while protecting their policyholders.
Features and Add-Ons
USAA and State Farm offer standard homeowners policy features plus a range of optional add-ons:
Standard Features
- Dwelling and property coverage
- Liability coverage
- Loss of use and additional living expenses
- Personal property coverage
- Medical payments coverage
Optional Add-Ons
- Identity theft protection
- Water backup coverage
- Earthquake coverage
- Extended replacement cost
- Home systems protection
- Valley inundation protection
The specific extras available can vary by state and insurer. But both USAA and State Farm allow customized home insurance through add-ons to suit your needs.
Availability and Eligibility
One key difference between USAA and State Farm is eligibility requirements:
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USAA: Only available to active/former military members and their direct families. Not accessible to the general public.
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State Farm: Open to all homeowners nationwide as long as property meets underwriting criteria. No military affiliation required.
So while State Farm is widely accessible, USAA home insurance is restricted primarily to the military community. Verify your eligibility before getting a USAA quote.
Which Is the Best Choice for You?
When weighing USAA vs State Farm for your home insurance policy, keep the following key factors in mind:
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Cost – Get quotes from both. Premiums can be competitive either way.
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Discounts – Compare discount opportunities to maximize savings.
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Claims service – USAA claims satisfaction ratings edge out State Farm’s.
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Financial strength – Both are equally strong.
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Availability – State Farm is open to all; USAA restricted to military ties.
For most homeowners, State Farm presents the simpler option thanks to open eligibility. But USAA is worth considering if you qualify based on military affiliation. The company earns high marks for customer satisfaction and claims handling.
Shop around and compare quotes to find the right homeowners insurance fit based on your budget, location, and coverage needs. Both USAA and State Farm are leading choices to protect your property.
State Farm vs USAA, which is better
FAQ
Is USAA cheaper than other home insurance companies?
Is USAA really the cheapest insurance?
Does USAA homeowners insurance go up after a claim?