What’s Better for Auto Insurance – USAA or State Farm?

Last Updated on October 7, 2026

By James Shaffer Reviewed by Thomas Rockford, insurance industry executive and financial analyst, on October 5, 2026 How we fact-check

USAA and State Farm are two of the most well-known auto insurers in the U.S.—but they’re “best” for different kinds of drivers.

Start with the part that settles it for most people: USAA sells only to the military community. In its own words it “serves 14 million members of the U.S. military, veterans who have honorably served and their families,” and separated service members need a discharge of Honorable or General Under Honorable Conditions to join. If that isn’t you or a close family member, USAA is not an option and the rest of this comparison doesn’t apply. State Farm has no membership restriction.

If you do qualify, you should get both quotes. Nobody can tell you in advance which will be cheaper, us included: there is no study and no filing that compares two named carriers on price for one driver’s profile. What can be compared is each company’s financial strength rating, its complaint record, its size and the discounts it actually publishes, and this page does that.

USAA is only for the military community: service members, veterans who were honorably discharged, and their families. If you don’t qualify, the comparison is moot.
State Farm is the largest US personal auto insurer, with 18.9% of premiums on 2024 NAIC data and 19,000 agents. USAA is fifth at 6.2%.
A.M. Best rates USAA A++, affirmed June 25, 2026, and State Farm A+ after a downgrade from A++ on November 14, 2025. On the BBB, USAA holds an A+ and State Farm’s corporate profile is rated F. Neither is accredited.
Both run telematics. State Farm publishes a 10% discount for enrolling in Drive Safe & Save and up to 30% overall; USAA raised its SafePilot participation discount to 15% in many states in February 2026, with up to 30% at renewal.

Table Of Contents

USAA vs. State Farm: Quick comparison
1) Eligibility: the biggest deciding factor
2) Rates and discounts: who’s cheaper?
3) Coverage options and add-ons
4) Claims and customer experience
5) Bundling and working with an agent
FAQs on USAA vs. State Farm Auto Insurance
So… which one is better?
Sources

USAA vs. State Farm: Quick comparison

Eligibility: USAA is limited to the military community and their families; State Farm is open to anyone.
Best for low rates: Unknowable in advance. No published study compares the two on price for a given driver, so quote both.
Best for local support: State Farm, which publishes a network of 19,000 agents. USAA is phone and app.
Best for financial strength: USAA, at A++ from A.M. Best against State Farm’s A+.
Best for complaint record: USAA, at A+ with the BBB against State Farm’s F. Neither company is BBB accredited.
Best for telematics: Depends on your state. Drive Safe & Save isn’t sold in California, Massachusetts or Rhode Island, and USAA’s 15% participation discount is in “many states” rather than all.

1) Eligibility: the biggest deciding factor

USAA was founded in 1922 by a group of military officers and has stayed with that population ever since. It is not available to everyone. Its own newsroom describes the membership as the U.S. military, veterans who have honorably served, and their families, and its 2025 annual report sets the discharge rule out plainly: “to join USAA, separated military personnel must have received a discharge type of Honorable or General Under Honorable Conditions.” The report puts membership at 14.3 million.

The family-member rules are the part people get wrong, and USAA does not publish them in a form I could read, so confirm your own case with USAA directly rather than with a comparison site. If you are serving now, start with auto insurance options for active-duty military members.

State Farm has no membership restriction, and it is the biggest personal auto insurer in the country. On 2024 NAIC data compiled by the Insurance Information Institute, State Farm wrote 18.9% of US private passenger auto premiums, ahead of Progressive at 16.7%. USAA was fifth at 6.2%, which is still a top-five carrier by any reading.

2) Rates and discounts: who’s cheaper?

There’s no universal winner on price because your premium depends on your state, ZIP code, vehicle, driving record, credit (where allowed), and coverage limits. That said:

USAA has a reputation for low rates in the military community, and that reputation is not the same thing as a published comparison. USAA does not publish a discount list I could read, so see our own rundown of USAA auto insurance discounts and check each one at quote time.
State Farm publishes its discount percentages, which is unusual and useful. Its own page gives up to 40% off medical-related coverage for qualifying vehicle safety features, up to 25% for a teen driver with good grades, and the safe-driver discount for new customers who have gone three years or more without a moving violation or at-fault accident.

One easy way to compare both companies is to quote them at the same coverage levels and deductibles. Small changes (like increasing your deductible, adjusting rental coverage, or adding a driver) can shift which carrier is cheaper.

Telematics (usage-based insurance): a big savings lever for both

Both companies run one, and both publish a headline of “up to 30%.” The number that actually lands in your pocket first is the participation discount for signing up, and those differ.

State Farm Drive Safe & Save publishes a “10% initial participation decrease” and “up to 30% on your auto insurance” after that. It runs through the State Farm app and scores acceleration, braking, cornering, phone distraction and speed, plus your annual mileage. Its own page says it is “not available in CA, MA, RI,” that a discount “may not be available in NC depending on individual facts and circumstances,” and that New York is capped at 30%.
USAA SafePilot raised its participation discount to 15%. USAA announced that on February 18, 2026, saying the discount “has increased to 15% in many states” and that SafePilot “reduces auto premiums by an average of $200 for a six-month policy at renewal.” If you see 10% quoted for SafePilot anywhere, that is USAA’s 2021 figure and it is five years stale.

Neither program is a free win. A telematics score that can go down can usually go up, so ask the quoting rep directly whether a poor score can raise your premium in your state, and get the answer before you enroll.

3) Coverage options and add-ons

Both offer the core building blocks: liability, comprehensive, collision and the medical-related coverages your state uses, plus optional extras like rental reimbursement and roadside help. One gap worth knowing about before you buy: State Farm does not sell gap insurance. Its own auto page answers the question with a flat “no” and points you at your loan provider instead. If you owe more on the car than it is worth, that matters more than a few dollars of premium. USAA publishes nothing readable about gap coverage either way, so ask.

State Farm is known for a wide variety of vehicle insurance options and add-ons, including a popular roadside option (here’s a breakdown of State Farm roadside assistance). If you’re shopping for something beyond a standard commuter car—like a motorcycle or a classic/collector vehicle—State Farm is often easy to place those policies with (and bundle them).

For a quick overview of common upgrades that can be worth the cost, see auto insurance add-ons explained.

4) Claims and customer experience

Both have strong reputations, and the published evidence is thinner than the reputations. Here is what exists.

USAA is built around one population and sells by phone and app rather than through offices. J.D. Power profiles USAA in its auto studies but marks it “not rank eligible because it does not meet study award criteria,” so there is no J.D. Power score for USAA to compare with anyone. Its Better Business Bureau rating is A+, read October 5, 2026, and it is not BBB accredited. BBB’s complaint tracker showed 3,456 complaints over three years and 1,094 closed in twelve months when I read it on October 1, 2026.
State Farm combines digital tools with 19,000 agents, which is the point of it if you want a “call my agent” relationship. In J.D. Power’s 2026 U.S. Auto Insurance Study, published June 9, 2026, it ranked highest in the Northwest region at 667, for a second consecutive year. Its corporate Better Business Bureau profile is a harder read: rated F, not accredited, with 825 complaints recorded as unresolved and a failure to respond to 12, as of October 5, 2026.

Read those BBB figures with the companies’ sizes in mind. State Farm writes three times the premium USAA does, so a raw complaint count was never going to be comparable. The letter grade and the accreditation status are the parts that are. A BBB rating is also not a regulator’s finding, so if you want the official version, your state insurance department publishes complaint data for carriers licensed in your state.

No matter which company you choose, the best time to understand their service is before you need it. If you’ve never filed a claim before, review the proper way to file an insurance claim after an accident so you know what documentation matters and what to expect.

Financial strength, with the dates

This is the one place the two companies have clearly moved apart, and most comparisons have not caught up. A.M. Best affirmed USAA’s Financial Strength Rating of A++ (Superior) on June 25, 2026, with a stable outlook. State Farm no longer holds that grade: A.M. Best downgraded State Farm Mutual Automobile Insurance Company from A++ to A+ (Superior) on November 14, 2025. A+ is still a strong rating and nobody should lose sleep over it, but if you read somewhere that both carriers hold A.M. Best’s top mark, that stopped being true in November 2025.

5) Bundling and working with an agent

State Farm writes many personal lines itself, including home and renters, and its official name for the bundling discount is the Multiple Line Discount, which life and health policies also count toward. With 19,000 agents, one person can usually quote the whole household. If you’re trying to reduce premiums across multiple policies, learn how bundling auto and homeowners insurance can lower your total costs.

If you prefer guidance—especially with coverage limits, deductibles, and endorsements—an agent can be a big help. Here’s a practical look at whether auto insurance is cheaper through an agent (sometimes it is, sometimes it isn’t).

FAQs on USAA vs. State Farm Auto Insurance

Is USAA always cheaper than State Farm?

Nobody can tell you in advance, because no published study compares two named carriers on price for one driver’s profile. Your rate depends on your state, ZIP code, vehicle, driving record and coverage choices. The only reliable way to know is to quote both using the same limits and deductibles on the same day.

Who qualifies for USAA auto insurance?

USAA describes its membership as the U.S. military, veterans who have honorably served, and their families. Its 2025 annual report adds the specific rule for people who have left the service: “to join USAA, separated military personnel must have received a discharge type of Honorable or General Under Honorable Conditions.” The family-member rules are narrower than people expect and USAA does not publish them in a form we could read, so confirm your own case with USAA rather than with a comparison site.

Which company is better for claims: USAA or State Farm?

There is less published data here than you would expect. J.D. Power profiles USAA but marks it not rank eligible, so USAA has no score to compare. State Farm ranked highest in J.D. Power’s Northwest region in the 2026 auto insurance study, at 667, for a second consecutive year. On the Better Business Bureau, USAA holds an A+ and State Farm’s corporate profile is rated F, with neither company accredited. If claims service is your priority, your own state insurance department’s complaint data is better evidence than either of those.

Do USAA and State Farm offer accident forgiveness?

Neither company publishes one. State Farm’s discounts page doesn’t mention accident forgiveness, and USAA doesn’t publish a discount list we could read, so treat this as a question for the quote rather than a feature to count on. Where insurers do offer it, some sell it as an add-on and some grant it as a loyalty benefit after several clean years, and it may apply to one driver rather than everyone on the policy. Ask what qualifies and who it covers.

Which is better for discounts?

State Farm is the one that publishes figures, which makes it easier to plan around: up to 40% off medical-related coverage for qualifying vehicle safety features, up to 25% for a teen with good grades, and 10% for enrolling in Drive Safe & Save. USAA publishes its SafePilot participation discount, 15% in many states as of February 2026, and little else that we could read. The best setup still depends on your household and your state, but if you want to know the numbers before you call, State Farm tells you more.

Is State Farm better if I want an agent?

Often, yes. State Farm publishes a network of 19,000 agents, which is helpful if you prefer in-person support or want someone to walk you through coverage choices. USAA is phone and app driven, which many members prefer, but it is a different style of service and there is no office to walk into.

What’s the best way to compare USAA and State Farm policies?

Get quotes from both using identical coverage limits, deductibles, drivers and vehicles. Then compare the total premium, the coverages and exclusions, the optional add-ons, and how claims are handled. On add-ons, note that State Farm answers “no” to gap insurance on its own site, so if you have a car loan, ask both companies where that protection would come from. Choose the best combination of price and protection rather than the lowest monthly bill.

So… which one is better?

Choose USAA if you’re eligible. That is most of the answer. It holds A.M. Best’s top financial strength grade, affirmed in June 2026, and an A+ with the BBB, and it is the fifth largest personal auto insurer in the country while only selling to one population. If you qualify, it belongs in your quote set.

Choose State Farm if you don’t qualify for USAA, or if you want an agent you can sit across from. It is the largest personal auto insurer in the US, it publishes more of its discount percentages than almost anyone, and its 19,000 agents are the reason people stay with it. The two marks against it are both checkable: A.M. Best cut its rating to A+ in November 2025, and its corporate BBB profile is rated F.

Don’t stop at one quote. Pricing varies so much that the best option is usually the company that gives you the best rate for the same coverage and still delivers when you need it. My advice for anyone eligible for USAA is to get the USAA quote and then take it to a State Farm agent in person. An agent who wants the household business has room to find discounts a web form won’t, and the worst case is that you keep the USAA quote. (If you’re weighing big-name carriers generally, see whether major insurers are better than smaller ones.)

Sources

Checked October 5, 2026