- Broad selection of financial services products
- Local agent network
This content is created by AP Buyline in accordance with AP’s editorial guidelines and supervised and edited by AP staff. Our evaluations and opinions are not influenced by our advertising relationships, but we may earn commissions from our partners’ links in this content. Learn more about AP Buyline here.
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Updated February 26, 2024
State Farm is an insurance and financial services giant. In a crowded and competitive marketplace, the Bloomington, Illinois-based company sells more homeowners and auto insurance than any other provider. It’s also a leading provider of life, health, and disability insurance, plus banking and investment products. In short, State Farm appeals to a wide variety of consumers. It sells homeowners insurance in 47 states.
While USAA is also a leading homeowners insurer, it has a different approach to marketing its products. USAA policies are available only to its members: Active and retired U.S. military, pre-commissioned officers, and their immediate families. This, in fact, is the company’s reason for being. USAA was established in the 1920s by a group of military officers to insure their own vehicles. The company has since expanded beyond military officers, but it retains its focus on the financial needs of military families. USAA sells homeowners insurance in all 50 states.
Overall best: USAA
Make no mistake: State Farm and USAA are both excellent homeowners insurance companies. Both offer competitive rates and a variety of coverage options and discounts.
But we give the nod to USAA as the superior choice for homeowners insurance. The company’s third-party ratings and reviews stand well above other leaders in the industry, and its policies come standard with features that others offer only as options. If you’re eligible for USAA membership, you owe it to yourself to learn more about all this company offers.
State Farm pros and cons
Pros:
Cons:
- Slightly more expensive
- Fewer advertised discounts
USAA pros and cons
Pros:
- Outstanding performance in third-party reviews
- Identity theft and replacement cost dwelling coverages are standard
Cons:
- Must purchase over the phone; no local agents
Ratings and rankings: USAA
Many companies claim to focus on the needs of their customers. With USAA, the proof is in the ratings. Its Net Promoter Score (a measure of customer satisfaction and loyalty) of 79% outclasses not only its rival State Farm’s 42%, but the insurance industry as a whole. Its J.D. Power homeowners insurance ratings are also superior to other homeowners insurance providers. In fact, USAA is cited across industries as an example of a true customer service leader.
| Ratings and Rankings | State Farm | USAA |
|---|---|---|
Net Promoter Score (NPS) | 42% | 79% |
J.D. Power Home Insurance Satisfaction | 829 | 884 |
J.D. Power Claims Satisfaction | 880 | 906 |
NAIC Complaint Index* | 0.35 | 0.37 |
AM Best | A++ | A++ |
Optional coverages: USAA
A homeowners policy from either State Farm or USAA provides all the standard coverages. These include dwelling, other structures, contents, loss of use, personal liability, and medical payments. Both companies offer a variety of optional coverages as well.
USAA, however, offers replacement cost dwelling as standard, whereas State Farm offers it as an option. This means a standard USAA policy is based on the cost to rebuild a home rather than its market or other appraised value. USAA also provides $5,000 worth of identity theft coverage as standard.
| Optional Coverage | State Farm | USAA |
|---|---|---|
Extended replacement cost | * | * |
Identity theft | * | * |
Ordinance/law | * | |
Personal Injury | * | |
Replacement cost contents | * | |
Replacement cost dwelling | * | * |
Scheduled contents | * | |
Water backup | * |
This is a list of optional coverages commonly available from homeowners insurance companies. Note that the companies in this review may identify specific coverages with different names.
Discounts: USAA
Many insurance experts recommend “bundling” your home and auto policies to save money. In other words, get policies from the same company to earn a generous discount. Both State Farm and USAA offer this important way to save.
However, USAA offers a broader variety of discounts than State Farm (on top of lower prices, which we’ll cover next). These include discounts for being claim-free, having a connected home, having a home security system, and for customer loyalty.
| Discounts | State Farm | USAA |
|---|---|---|
Affiliation | ||
Bundling | * | * |
Claim free | * | |
Connected home | * | |
Good payer | ||
Green certified | ||
Home security | * | * |
Loyalty | * | |
New home | ||
Nonsmoker | ||
Paperless | ||
Roof material | * |
Note: This is a list of types of discounts commonly available from homeowners insurance companies. Note that the companies in this review may identify specific discounts with different names. Some discounts may not be available in some states.
Which is cheaper: USAA
USAA has an edge over State Farm in every pricing category we reviewed.
| State Farm | USAA | |
|---|---|---|
$300,000 replacement cost | $2,081 | $1,710 |
$500,000 replacement cost | $3,217 | $2,402 |
$1,000 deductible | $1,356 | $1,231 |
$2,500 deductible | $1,207 | $1,049 |
Wood frame construction | $1,356 | $1,231 |
Masonry construction | $1,228 | $1,182 |
Fire-resistant construction | $1,050 | $1,173 |
New home | $885 | $706 |
10-year-old home | $1,356 | $1,231 |
20-year-old home | $1,520 | $1,477 |
40-year-old home | $1,531 | $1,495 |
Excellent credit | $1,183 | $1,068 |
Good credit | $1,543 | $1,256 |
Poor credit | $3,435 | $2,553 |
Note: These are annual costs. Source: Quadrant Information Services via The Zebra.
Methodology
We compared these homeowners insurance companies across multiple areas, including third-party ratings and rankings, optional coverages and discounts, and pricing. We considered important factors to the consumer experience such as the ease of buying coverage, product availability, and customer service ratings. We also looked at how each carrier fared in terms of industry strength ratings and rankings. Lastly, we considered all of the products, features, and services offered by each insurance company along with any discounts available.
Frequently asked questions (FAQs)
Is State Farm a good company for homeowners insurance?
State Farm, the country’s largest insurer, is an excellent choice for homeowners insurance. The company performs well across multiple third-party ratings and rankings of companies in the industry. It also offers a variety of coverage options and discounts, and competitive pricing.
Is USAA a good company for homeowners insurance?
If you’re eligible for membership (limited to active and retired U.S. military, pre-commissioned officers, and immediate military family), USAA is an excellent choice for homeowners insurance. The company offers competitive pricing and a variety of coverage options and discounts. It also consistently leads the industry in third-party reviews and customer satisfaction and loyalty ratings.
Do State Farm and USAA offer discounts for bundling?
Yes, both State Farm and USAA offer a discount for bundling, or having multiple insurance policies (such as auto and homeowners) from the company. This can be an excellent way to save money on your insurance costs.
Do State Farm and USAA offer online homeowners insurance quotes?
Yes, both State Farm and Farmers offer online quotes for homeowners insurance. However, you must work with a local agent to buy a State Farm policy. USAA policy purchases are completed over the phone with a tele-agent.
Are State Farm and USAA available in every state?
State Farm homeowners insurance is currently available in 47 U.S. states and the District of Columbia. The company announced in May 2023 that it has stopped issuing new homeowners policies in California but continues to service existing policies there.
USAA homeowners insurance is available in all 50 U.S. states and the District of Columbia.
This content is created by AP Buyline in accordance with AP’s editorial guidelines and supervised and edited by AP staff. Our evaluations and opinions are not influenced by our advertising relationships, but we may earn commissions from our partners’ links in this content. Learn more about AP Buyline here.