Can't-Miss Facts

  • American Family Insurance is about $300 more expensive than State Farm annually.
  • State Farm offers many more discounts than American Family, based on available information.
  • Both companies have identical ratings from A.M. Best and the Better Business Bureau.

If you’re with us today, you’re probably looking for your next insurer. Comparison shopping can be a bit of a complicated process, so we’re going to focus only on American Family vs. State Farm.

You can also read our American Family review to learn specifics on American Family’s rates, offered discounts, American Family care insurance, etc.

So, State Farm vs. American Family: Which company is best in 2021? Let’s find out together.

Before we jump into our American Family vs. State Farm comparison, type your ZIP code into our free and helpful tool above to find affordable auto insurance quotes in your area.

American Family vs. State Farm: Which is cheaper?

When comparing insurers it’s best to start with the most important factor: pricing. Let’s now take a look at a table that will show the average annual premiums not only for American Family and State Farm but for all of the main, big insurers.

Average Annual Auto Insurance Rates by Company
CompanyAverage Annual Rates
State Farm$3,269.80
American Family$3,544.37
Liberty Mutual$6,058.57

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As you can see, of the 10 insurers shown, American Family is cheaper than five: Progressive, Farmers, Travelers, Allstate, and Liberty Mutual.

How did State Farm insurance do? State Farm is about $300 cheaper than American Family annually. In total, it is cheaper than seven of its competitors: American Family, Nationwide, Progressive, Farmers, Travelers, Allstate, and Liberty Mutual.

So, while these two companies offer comparable prices, State Farm has the edge. Let’s now move on to what discounts are offered.

American Family vs. State Farm: Which offers better discounts?

The importance of discounts in auto insurance cannot be overstated. When you are assigned an agent be absolutely sure to inquire as to what discounts you can accrue that are applicable to your life. Let’s take a look at a table showing many of these discounts available from various large insurers.

Auto Insurance Discounts Available by Company and Discount Amount
Discount NameAllstateAmerican FamilyFarmersGeicoLiberty MutualNationwideProgressiveState FarmTravelersUSAA
Adaptive Cruise Control5%
Adaptive Headlights5%
Anti-lock Brakes10%5%5%5%5%
Claim Free35%26%10%15%23%12%
Continuous Coverage15%
Daytime Running Lights2%3%5%5%
Defensive Driver10%10%10%5%10%5%10%3%
Distant Student35%10%7%
Driver's Ed10%10%10%15%8%3%
Driving Device/App20%40%30%40%20%50%30%5%
Early Signing10%8%10%12%
Electronic Stability Control2%5%
Emergency Deployment25%
Engaged Couple
Family Legacy10%
Family Plan25%
Farm Vehicle10%
Fast 5
Federal Employee12%10%
Forward Collision Warning5%
Full Payment10%$508%
Further Education10%15%
Good Credit
Good Student20%15%23%10%25%8%3%
Green Vehicle10%5%10%10%
Lane Departure Warning
Life Insurance
Low Mileage30%
Military Garaging15%
Multiple Drivers
Multiple Policies10%29%10%20%10%12%17%13%
Multiple Vehicles25%10%20%10%20%8%
New Address5%
New Customer/New Plan
New Graduate5%
New Vehicle30%15%40%10%12%
Newly Licensed5%
Occasional Operator
On-Time Payments5%15%
Online Shopper7%
Paperless Documents10%5%$50
Paperless/Auto Billing5%$30$203%3%
Passive Restraint30%30%40%20%40%
Recent Retirees4%
Roadside Assistance
Safe Driver45%15%35%31%15%23%12%
Seat Belt Use15%
Senior Driver10%
Stable Residence
Students & Alumni10%7%
Switching Provider10%
Utility Vehicle15%
Vehicle Recovery10%15%35%25%5%
VIN Etching5%
Young Driver$75

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As you can see, of the 63 discounts shown, American Family offers three. By comparison, State Farm offers a whopping 16 discounts. What’s great is a lot of these are as simple as typing in your State Farm login.

With this information, we can say that State Farm wins in terms of discounts. What’s great about these discounts offered by big insurers is the range. There are discounts for safety features (which are becoming increasingly common in newer vehicles), paying your bills on time, and driving accident-free.

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American Family vs. State Farm: Which is more highly rated?

When comparing insurers, one last thing to look at is the ratings given to the companies by A.M. Best and the Better Business Bureau. These ratings can help reassure a consumer that a life insurance company is and will be financially strong.

A.M. Best’s rating scale goes from A++ down to D. Currently, American Family has a rating of A from A.M. Best. It turns out that State Farm has an identical rating from A.M. Best.

A.M. Best also has what is called Long-Term Issuer Credit Ratings (Long-Term ICR). Whereas their Financial Strength Ratings are about an insurer’s financial strength as well as its ability to meet ongoing policy and contractual obligations, a Long-Term ICR is focused on the future.  A Long-Term ICR can be issued on a long-term basis or short-term basis.

This scale goes from the high end of “aaa” (Exceptional) down to the low end of “c”.  It’s a little confusing, so the scale goes like this: “aaa”, “aa”, “a”, “bbb”, “bb”, “b”, “ccc”, “cc”, “c”.  A company can also score notches in their ratings, i.e. “aa+”.

American Family score an A.M. Best Long-Term Issuer Credit Rating of “a+”.  How did State Farm do in terms of A.M. Best’s Long-Term ICR? It turns out that recently they have been downgraded to a rating of “a” from a rating of “a+”.

The Better Business Bureau gave American Family a rating of A, and the company is currently unaccredited. State Farm has not only an identical rating, but they are also not BBB accredited.

Don’t let your comparison shopping stop with this article. Type your ZIP code into our free and helpful tool below to find affordable auto insurance quotes in your area. It’s certainly easier than calling up Jake from State Farm.