State Farm and USAA are two of the largest nationwide providers of homeowners, renters, auto and life insurance products. While we ranked both among our picks for the best homeowners insurance companies, there are differences in coverage options and available discounts.
We at the MarketWatch Guides team have reviewed independent data on costs, coverage options, customer satisfaction and financial stability to compare USAA and State Farm homeowners insurance.
At a Glance: USAA vs. State Farm
State Farm is our top pick for new homeowners. It offers comprehensive coverage, lower-than-average insurance rates and 24/7 customer support, backed by a strong record of financial stability.
USAA is our top pick for military members. It offers home insurance to active-duty military members, veterans and their families. Despite limited discount options, its insurance premiums are below the national average. USAA also has a below-average number of customer complaints to the National Association of Insurance Commissioners (NAIC).
Compare both companies at a glance using the chart below:
| Metric | USAA | State Farm |
|---|---|---|
| Annual premium cost* | $2,029 | $2,200 |
| Discounts | Multi-policy bundling, claims-free, connected home and security devices | Bundling, claims-free, home security devices, impact or fire-resistant roofing, high deductible, and automatic sprinklers or fire suppression device |
| Coverage add-ons | Flooding, earthquake, valuables and dwelling replacement cost | Flooding, earthquake, valuables, water backup and dwelling actual replacement cost |
| Customer support | Offers 24/7 online support and phone support Monday to Friday | Offers 24/7 online, phone and claims support |
| Percent of claims approved** | 98% | 97% |
| NAIC Complaint Index for Homeowners Insurance (average rating is 1.0) | 0.3 | 0.53 |
| J.D. Power Score | 881 out of 1,000 | 829 out of 1,000 |
| AM Best Score*** | A++ | B |
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*Premiums are based on data obtained from Quadrant Information Services. For comparison, the national average cost for home insurance is $2,728 per year.
**Percentage of claims approved is based on our 2024 survey of 1,000 policyholders who have filed a homeowners insurance claim with the providers in this review. Your experience will vary.
USAA Overview
USAA Best for military members and veterans
4.6
Cost: 4.6/5
Customer Experience: 4.6/5
Industry Standing: 4.3/5
Coverage: 5/5
A.M. BestA++J.D. Power881/1000Annual Cost$2,029
Why We Like USAA
Our team rated USAA 4.6 out of 5 stars based on its below-average costs for basic home insurance coverage and financial stability. USAA received an A++ financial strength rating from credit rating agency AM Best, which shows a superior ability to pay potential claims.
A unique perk of USAA home insurance is its standard policy provides replacement cost coverage for personal belongings. In other words, the policy will pay enough to replace eligible personal property that’s damaged or stolen without subtracting for deterioration or depreciation.
Customers filed relatively few complaints against USAA with the NAIC, and customer satisfaction ratings from J.D. Power are above average for homeowners insurance companies. However, USAA has somewhat limited phone customer support and claims hours. Still, policyholders can manage policies and file a claim online at any time.
Pros and Cons
Pros Provides comprehensive member benefits Covers homes in all 50 U.S. states and Washington, D.C. Offers basic homeowners insurance at below-average rates Cons Limits eligibility to military members, veterans and their family members Has limited endorsem*nts to customize your policy
Coverage Options
A USAA insurance policy includes the following basic insurance coverages:
- Dwelling and additional structures
- Personal liability
- Personal belongings (at replacement cost)
- Additional living expenses and loss of use
USAA endorsem*nt options include:
- Dwelling replacement cost
- Earthquake
- Flooding
- Valuables
State Farm Overview
State Farm Best for Value
4.7
Cost: 4.6/5
Customer Experience: 4.9/5
Industry Standing: 4.2/5
Coverage: 5/5
Our Review
A.M. BestBJ.D. Power829/1000Annual Cost$2,200
Why We Like State Farm
Our team gave State Farm Insurance 4.7 out of 5 stars for its home insurance products. It has a relatively strong financial position with an B A.M. Best score and a long history in the insurance industry. Coupled with 24/7 customer support, available local agents and below-average premiums, it is worth considering for new homeowners on a budget.
Pros and Cons
Pros Maintains an extensive online resource library for homeowners Includes extra protection as part of standard home policies Charges below-average premiums in many home insurance markets Cons Limited discount offerings may reduce potential savings Is not writing new home insurance policies in California
Coverage Options
State Farm’s basic insurance coverage is fairly standard, with the added perk of limited coverage for detached structures, such as a garage. The company’s standard homeowner’s insurance policy includes the following coverage:
- Dwelling
- Limited dwelling for detached structures
- Personal liability insurance
- Loss of use
- Personal property
State Farm endorsem*nts include:
- Actual replacement cost coverage for dwellings
- Earthquake
- Flooding
- Higher coverage limits for valuables
- Water backup
USAA vs. State Farm: Cost and Discounts
According to data from Quadrant Information Services, the average USAA home insurance premium is $2,029 per year, compared to $2,200 from State Farm. Both amounts are below the national average of $2,728.
Discounts for bundling home and auto insurance, installing safety features and purchasing a new home can help you get the best rates. State Farm offers slightly better discounts than USAA, with the potential to save more than $1,000 on home and auto insurance rates by bundling.
Cost by State
Nationally, USAA and State Farm have comparable rates compared to the national average. However, the companies have widely different home insurance premium costs when you look at state-specific data.
Variables such as home size, dwelling age, construction type, location and your credit score determine your insurance rates. Requesting insurance quotes is the best way to get a clear picture of how much you will pay for a homeowner’s policy.
Home Insurance Discounts
State Farm and USAA insurance make it easy to lower premiums with discounts, but State Farm offers more opportunities for significant savings. You can save more than $1,000 by bundling your home and car insurance policy with State Farm. The same combination may only lower your USAA premium by 10%, which may be about $200 in savings based on the company’s national average premium.
USAA Discounts
- Multi-policy bundling
- Claims-free
- Connected home
- Installed security devices
State Farm Discounts
- Bundling
- Claims-free
- Home security and anti-theft devices
- Impact and fire-resistant roofing
- High deductible
- Automatic sprinklers/fire suppression device
USAA vs. State Farm: Customer Service and Claims
Both USAA and State Farm have lower-than-average complaint rates. State Farm has an NAIC complaint index of 0.53 and USAA’s NAIC complaint ratio is 0.30. Both homeowners insurance policies are below the National Complaint Index average of 1.0, showing fewer-than-average complaints about home insurance policies. It also indicates high customer satisfaction regarding policy servicing, with both insurance companies scoring well for claims satisfaction.
State Farm has online, phone and agent-handled avenues for assistance and claims handling. The average wait time for claims processing and response is 12 days, with 95% approved based on a 2023 MarketWatch Guides survey. USAA has policy servicing through a mobile app and online customer portal. Policyholders typically receive a response in 15 days, with 93% of claims approved.
According to the 2023 J.D. Power U.S. Property Claims Satisfaction study, USAA received 886 out of 1,000 points on the customer satisfaction index ranking. This is above the national average of 874 but below State Farm’s score of 829.
USAA vs. State Farm: Customer Reviews
Customer reviews for both insurance providers indicate a lack of quality customer service from local offices. However, there are also many positive comments from policyholders, especially highlighting quick claims settlements and easy-to-use technology.
USAA Reviews
“I really like USAA — it serves veterans. The mobile app is amazing. Intuitive and easy to use. Every time I talk to an agent they are friendly and knowledgeable.” —Richard Pedro via Trustpilot
“I have been a member for over 30 years and have been happy with [USAA’s] service. I have auto and home insurance and do my banking with [USAA]. I have even taken out a USAA loan. I have never had a problem with any of its services. [USAA] has helped when I needed collision repair, roof replacement and when a company said it had not received payment, [USAA] assumed responsibility. ” —GA Thomas via Trustpilot
“A recent hail storm hit our neighborhood. Very large hailstones rained down for 15 minutes. I contacted my friend's roofing company to see if I should file a claim. Yes, extensive damage on a roof less than four years old. I had paid out of pocket for a better roof, plus gutters and gutter guards. The inspector showed up and said some damage. USAA sent me a check for $3,500 [with] no explanation of what it covered. When the roofer looked at the letter he asked what it was supposed to cover, no explanation.” —Sky H. via Trustpilot
State Farm Reviews
“I can't express how pleased l am with State Farm in Texas. I have been a client of this specific office for about seven years and couldn't ask for a more responsive and kind group of people than those there. I started with one car, then went to two [and] recently added my home. State Farm is extremely responsive if there is a problem.” —Cynthia O. via the Better Business Bureau (BBB)
“Very good experience with NYC agent [who] was very helpful!!” —Heike K. via the BBB
“[State Farm] would like to patch our siding instead of replace [it]. We have been customers for 20 years and have only ever had one claim. The new siding looks new and the old siding is faded and stained. [State Farm] refuses to listen or compromise at all. Every time I call they ask me to send pictures, which I do. Then [State Farm] says it doesn’t look so bad. My house is a $600,000 plus investment [and] I don’t think a patchwork is acceptable.” — Alexandra S. via the BBB
The Bottom Line
Both USAA and State Farm offer comprehensive home coverage options at below-industry-average insurance rates. Both insurance companies receive strong scores for financial stability and customer satisfaction. However, you will note a few differences when comparing USAA and State Farm homeowners insurance policies, such as available discounts and endorsem*nts. These can influence which provider is a better choice to meet your coverage needs.
USAA is our choice for a homeowner’s insurance provider for active-duty military members, veterans and their families. It only offers financial products to this market segment and has specialized knowledge of coverage needs and potential discounts.
State Farm offers quality customer service, with representatives available around the clock to answer questions, make policy adjustments or help you file a claim. Standard coverage with State Farm is robust and includes a few benefits that other insurance companies offer for an added fee. For these reasons, we find that State Farm home insurance is a suitable choice for new homeowners.
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Frequently Asked Questions About USAA and State Farm
USAA has a higher J.D. Power customer satisfaction rating for homeowners insurance compared to State Farm. USAA holds a rating of 881 while State Farm’s rating is 829.
Like most insurance companies, USAA may increase your insurance policy rate after a claim. This is a common complaint against the company on third-party review sites. Maintaining good credit and taking advantage of discounts, such as bundling home and car insurance, can help keep your insurance rates lower.
Disadvantages of USAA home insurance include limited extra coverage options and availability since the company only writes policies for homeowners with military affiliations.
State Farm offers a more robust basic home insurance package compared to USAA, but its insurance rates are about the same. If you are a new homeowner or someone looking to take advantage of available discounts, State Farm may be a better choice for homeowners insurance. However, USAA may be best if you are an active-duty military member.
Methodology: Our System for Ranking the Best Home Insurance Companies
Our team surveyed dozens of home insurance providers and created a scoring system to assess and compare each company’s quality and service. Here are the factors that account for our provider scores according to our home insurance rating methodology:
- Coverage (28%): We analyze the comprehensiveness of each provider’s standard home insurance policy and compare optional policy endorsem*nts to determine the quality of coverage.
- Cost (27%): We compare cost data for homes nationwide to assess how competitively priced each provider is. We also consider each company’s available discounts when determining its overall cost of coverage.
- Availability and ease of use (25%): We evaluate each company’s customer service options, such as live chat, a customer support phone line, and multiple channels for filing claims and generating quotes. Similarly, we score providers based on their digital resources, such as a mobile app or online customer portal.
- Brand trust (20%): We gauge reputation by evaluating consumer reviews and third-party financial strength and customer experience ratings, including from J.D. Power, AM Best and customer review aggregators.
Companies with the best customer service exhibit 24/7 availability, useful digital tools and a quick claims-filing process. Providers that offer extensive discount options, endorsem*nts, customizable coverage options and unique features score significantly higher than those that don’t, putting them toward the top of our recommendations to readers.
AM Best Disclaimer
***AM Best ratings are accurate as of September 2024.
How We Gather Cost Data
We at the Marketwatch Guides Team gathered home insurance quotes for the providers in this article using 2024 data from Quadrant Information Services. Quadrant is a leading source of property and casualty insurance solutions and data.
Our sample homeowner is a 40-year-old single male with good credit and no prior claims history. Our sample policies featured a $1,000 deductible and the following coverage and limits:
- Dwelling: $350,000
- Other Structures: $25,000
- Personal Property: $150,000
- Loss of Use: $50,000
- Liability: $300,000
- Medical Payments: $1,000
For each provider, we gathered a quote for 50% of the ZIP codes in every state it is licensed in. We used the most populous ZIP codes for our study. We took the average of these individual quotes to calculate a national average premium per provider. Our sample rates are for informational purposes only. Actual premiums will vary.
If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.com.
