Farmers Vs American Family: Who Offers The Best Auto Insurance?

Farmers Insurance and American Family Insurance are two of the biggest names in auto insurance in the United States. Both companies offer excellent customer service, solid financial standings, and highly-rated coverage options. However, there are some key differences between the two insurers. American Family is known for its customer satisfaction and affordable policy options, while Farmers stands out for its wide range of discounts. When it comes to cost, American Family beats Farmers, with lower rates for different age groups and drivers with poor credit. On the other hand, Farmers offers a wider variety of coverage options and has a larger market share, meaning more resources. Overall, Farmers is generally considered to be the better option, with higher ratings from WalletHub's editors.

Customer satisfaction

American Family is known for its customer satisfaction and commitment to providing the best service and products to its customers. In a survey, American Family scored 14 percentile points ahead of Farmers in customer satisfaction. WalletHub's review also gave American Family a higher score of 4.3 out of 5 stars, compared to Farmers' 3 out of 5 stars.

J.D. Power Auto Claims Satisfaction Score

J.D. Power's 2022 U.S. Auto Claims Satisfaction Study measures customer satisfaction with a company's auto claims handling. Farmers scored 882, and American Family scored 874, both above the industry average of 873. This indicates that both companies handle auto claims satisfactorily according to their customers.

Customer Service

Both Farmers and American Family are known for providing excellent customer service. In a survey, more than 46% of respondents were completely satisfied with the customer service provided by Farmers, and American Family ranked highly for customer service in another survey.

Claims Handling

Farmers Insurance customers are generally satisfied with how their claims are resolved. 39% of Farmers customers were completely satisfied with the ease of filing a claim, and 58% were satisfied with the resolution. American Family ranks lower in complete satisfaction for claims handling, with only 7% of customers stating they were completely satisfied with the final claims resolution.

Customer Loyalty and Renewal

Farmers Insurance performs well in customer loyalty and the likelihood of customers renewing their policies. 44% of respondents said they were very likely to renew their Farmers policy, and 36% said they were very likely to recommend the company. American Family also has a high renewal rate of 86%, but a lower percentage of customers who plan to renew, with only 50% saying they were completely satisfied with the value received.

Discounts

American Family offers better discounts than Farmers, making it a more attractive option for price-conscious customers. American Family has a total of 29 auto insurance discounts, while Farmers has 34.

Overall Customer Satisfaction

While both Farmers and American Family have their strengths and weaknesses, American Family generally ranks higher in customer satisfaction surveys and ratings. However, Farmers performs well in customer loyalty and renewal intentions, indicating that their customers are satisfied enough to continue doing business with them.

Discounts

American Family Discounts

American Family offers 29 auto insurance discounts, including:

• Anti-lock brake system
• Anti-theft devices
• Auto safety equipment
• Daytime running lights
• Student away at school
• Hybrid car discount
• Rideshare insurance
• Annual, semi-annual, or monthly payment options
• Discounts for young drivers and teens
• Discounts for college students
• Discounts for senior drivers
• Discounts for drivers with a ticket
• Discounts for high-risk drivers
• Discounts for auto/home bundling

Farmers Discounts

Farmers offers 34 auto insurance discounts, including:

• Alternative fuel vehicle
• Business/professional group eligibility
• Bundling with other insurance products (home, life, renters, and umbrella coverage)
• Paying by electronic funds transfer (EFT)
• Receiving documents by electronic delivery
• Good student discount
• Senior defensive driver discount
• Discounts for drivers with a poor driving record or bad credit
• Discounts for young adults
• Discounts for adults
• Discounts for seniors
• Discounts for drivers with poor credit
• Discounts for good drivers
• Discounts for drivers with a speeding ticket
• Discounts for drivers after an accident
• Discounts for drivers after a DUI
• Discounts for high coverage
• Discounts for minimum coverage

Customer Satisfaction with Discounts

While American Family offers better discounts than Farmers, making it a more attractive option for those concerned about price, customer satisfaction surveys reveal that more customers are satisfied with Farmers' discounts. In one survey, 47% of American Family customers who opened a policy gave a high satisfaction rate for discounts, which fell to 41% among those who filed a claim. In contrast, 42% of State Farm customers were satisfied with discounts before filing a claim, and 39% remained satisfied after filing a claim.

Cost

When it comes to cost, American Family beats Farmers. A minimum-coverage policy for a good driver in Illinois, for example, costs an average of $3,204 per year from Farmers and $1,290 per year from American Family.

American Family is cheaper than Farmers for every age group — teens aged 16-19, young adults aged 20-24, the average driver at age 40, and seniors aged 65.

American Family's auto insurance rates for teen drivers are about 27% cheaper than Farmers. For drivers 25 and older, American Family is 19% cheaper than Farmers.

The real savings from American Family are in auto insurance for female teen drivers. You can save over $2,500 a year by choosing American Family for the young woman in your household.

American Family's auto insurance rates for 25 and older are 31% cheaper than Farmers. That's certainly a bigger difference.

American Family is also a better choice if you have a poor driving record or bad credit. By choosing American Family, you can save between $400 and $1000 per year if you have a speeding ticket, accident, or DUI on your record.

If you have extremely bad credit, American Family could be the way to go. On average, American Family offers cheaper premiums than Farmers for prospective clients with credit scores of 579 or less. Insurance shoppers with exceptional credit — a score of 800 or better — should also lean toward American Family.

The national average auto insurance rate is $1,321. State Farm's average rate of $1,169 is lower than the national average, while American Family's average rate is $1,451, higher than the national average.

Types of insurance

There are several types of insurance policies available to consumers, and most financial experts recommend four types of insurance that everyone should have: life, health, auto, and long-term disability.

Life Insurance

Life insurance provides financial support to your survivors in the event of your death. It is especially important if your family depends on your salary. Industry experts suggest getting a policy that pays out 10 times your yearly income, factoring in funeral expenses and your family's daily living expenses. The two basic types of life insurance are traditional whole life and term life. Whole life insurance can be used as an income tool and has a death benefit and a cash value component. Term life insurance covers you for a set amount of time, and your premiums remain stable. It is typically the most affordable type of life insurance.

Health Insurance

Health insurance protects you from catastrophic bills in the event of a serious accident or illness. In the US, most people get health insurance through their employer, the federal health insurance marketplace, or private insurance companies. In 2021, only about 9.2% of the American population was without health insurance coverage, according to the CDC.

Auto Insurance

Auto insurance is required by law in almost every state in the US. It covers vehicle damage and injuries after an accident. There are several types of auto insurance, including liability coverage, uninsured/underinsured motorist coverage, personal injury protection, medical payment coverage, and comprehensive and collision coverage. When choosing an auto insurance company, it is important to compare rates, coverage options, and customer satisfaction ratings.

Long-Term Disability Insurance

Long-term disability insurance provides financial support if you become unable to work due to an illness or injury. It typically replaces 40% to 70% of your base income and usually has a waiting period before coverage begins. Many employers offer long-term disability insurance as part of their benefits package, but you can also purchase it on your own.

In addition to these four main types of insurance, there are other types of insurance that individuals may want to consider depending on their specific needs, such as homeowners insurance, renters insurance, and business insurance.

Customer service

When it comes to customer service, Farmers and American Family both have their pros and cons. According to a survey by WalletHub, American Family has an average customer service rating, while Farmers does not have a customer service rating as it is not included in the survey. However, Farmers has a wide range of customizable coverage options, while American Family is known for its focus on personal relationships with customers.

In terms of customer satisfaction, American Family scored 14 percentile points ahead of Farmers, indicating its commitment to providing excellent service and products. On the other hand, Farmers has higher customer satisfaction ratings when it comes to claims handling, with 58% of survey respondents satisfied with how their claims were resolved.

When it comes to opening a policy, 68% of Farmers' policyholders were satisfied with the ease of the process, while only 57% of American Family customers said the same. In terms of contacting customer service, Farmers performed better, with 52% of policyholders satisfied, compared to 50% for American Family.

Overall, both companies provide excellent customer service and have solid financial standings. However, American Family is known for its customer satisfaction, while Farmers offers a wider range of coverage options. The choice between the two depends on the specific needs and preferences of the individual.

Frequently asked questions