American Family Auto Insurance review and ratings 2024

Our take: American Family Insurance policyholders pay less on average for full coverage car insurance than drivers insured by the nation’s four largest carriers. Consumers rated the insurer highly for its digital shopping and service experiences, according to market research firm J.D. Power.

However, American Family is one of the more expensive insurers for liability policies and state minimum coverage, so if you are in the market for liability insurance only, you may want to consider other insurers.

When shopping for coverage, it is essential to consider more than just price. “I always advise clients to consider a carrier's financial stability and customer service ratings,” says Ryan McEachron, CEO of ISU Insurance Services in Victorville, California.

“Look for companies with strong credit ratings and few significant complaints. Pay attention to carriers' handling of claims. You want fast, fair resolution so you can get back to business quickly after a loss,” McEachron says.

American Family scored well on J.D. Power’s annual customer service and claim handling surveys and earned a financial strength rating of A+ (Superior) from AM Best.

Perhaps the greatest drawback is the lack of availability. At present, American Family writes car insurance policies in only 19 states. But if you live in an area where it is available, it can be an excellent choice.

How we compared American Family

When reviewing insurers, we examine various industry studies and benchmarks, including the annual J.D. Power Customer Satisfaction Survey and AM Best ratings for financial stability. We also check the National Association of Insurance Commissioners (NAIC) complaint index to see how many complaints each insurer has received.

Finally, we also compared American Family’s average rates to those of the four largest insurers: Progressive, Allstate, Geico and State Farm.

American Family versus other top auto insurers

Who are the biggest auto insurers?

Four companies dominate the U.S. car insurance industry. Together, Allstate, State Farm, Progressive and Geico control about 56% of the market. According to the NAIC, American Family ranks No. 8 among the top auto insurers, with approximately $6.7 billion in premiums written in 2023. The industry’s market leader, State Farm, had $58 billion in premiums written in 2023.

How do American Family’s rates compare to other top insurers?

American Family’s full coverage premium averages $1,554 per year, lower than the rates of the four largest carriers. However, American Family is more expensive, on average, when it comes to liability insurance and state minimum coverage. It’s the second-most expensive for state minimum coverage at $602 and the most expensive for liability-only coverage at $870. In both instances, Geico is the cheapest.

The rates below were collected from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for the following: state minimum liability insurance, standard liability with coverage limits of 50/100/500, and full coverage with liability limits of 100/300/100 and a $500 comprehensive and collision deductible.

How does American Family do in claims satisfaction?

Price should not be the only factor you consider when shopping for insurance. Consumers should also consider how fairly and quickly an insurance company handles a claim, experts say.

J.D. Power’s 2024 Auto Claims Satisfaction Study examines how happy policyholders are with the general claims handling process. Compared to the four largest insurers, American Family ranked second with a score of 692 out of 1,000, tied with Geico. That's below the study average of 697. State Farm was the only of the big four carriers to earn an above-average score (710), still well behind the No. 1 overall carrier, NJM Insurance Co.

The CRASH Network performs an annual survey of national body shops to rate their experiences in working with auto insurers on claims. Specifically, it asks body shops, “How well does this company’s claims handling policies, attitude, and payment practices ensure quality repairs and customer service for motorists?”

In its 2024 rating, none of the largest auto insurers cracked the top 10 rankings. American Family earned a C+, which is slightly higher than the Big Four insurers. Progressive scored a C, State Farm and Geico earned C-minus grades, and Allstate got a D+.

What is American Family’s financial stability?

One of the most important considerations when shopping for coverage is having the financial strength to cover your claim when you need help. Experts recommend checking the financial rating of any insurer you are considering with AM Best. This credit rating agency provides research reports and credit ratings on roughly 16,000 insurance companies worldwide.

American Family is considered financially solid, with an A+ (Superior) rating, the second-highest rating an insurer can receive. The other major insurers we looked at had equally impressive ratings. State Farm and Geico earned the highest ranking of A++ (Superior), while Progressive and Allstate both had A+ ratings.

Does American Family receive a lot of complaints?

One of the biggest frustrations with insurance is dealing with claims and customer service issues, so it's extremely important to choose an insurer that handles claims quickly and fairly.

The National Association of Insurance Commissioners (NAIC) Complaint Index examines the volume of consumer complaints each insurer receives. American Family scored a 1.08, slightly higher than the industry benchmark of 1.0. A score below 1.0 means a company received fewer complaints than the benchmark, while a score higher than 1.0 means it received a higher-than-average number of complaints.

All four of the nation’s largest insurers have lower complaint index scores: Progressive and Allstate (0.65), State Farm (0.7) and Geico (0.91).

What is American Family’s digital shopping experience like?

The J.D. Power annual Insurance Digital Experience Study asks policyholders to rank their online experience with insurers related to service and shopping. In both categories, AmFam did remarkably well.

In the shopping category, American Family finished second to Progressive overall. Its score of 717 out of 1,000 was well behind Progressive’s score of 737 and just a couple of points better than Allstate's at 713. Only Geico (668) scored below the subcategory average of 698 among the Big Four insurers.

4In the service subcategory, American Family did less well. Its score of 527 put it in fourth place overall behind No. 1 AAA (546). But AmFam did better than any of the Big Four insurers, among which Allstate (521) was best.

How is American Family for shopping in general?

According to J.D. Power’s annual U.S. Insurance Shopping Study, American Family scored higher than any of the Big Four insurers. Its score of 702 out of 1,000 put it in third place behind overall winner Erie Insurance, which had a score of 730. Among the four major carriers, State Farm did best at 695. Both Allstate and Geico finished below the study average.

Is American Family good at offering usage-based insurance?

Usage-based insurance (UBI) uses an app on your phone or a plug-in device to measure your mileage, what time of day you are driving, and whether or not you’re prone to speeding, hard stops or tailgating. If the data shows that you are driving safely, your insurer will typically offer a discount. American Family offers two usage-based programs:

DriveMyWay. Download the MyAmFamDrive app to monitor your driving, and you can earn a 10% introductory discount on your car insurance premium. Once the app has gathered enough data to analyze your vehicular habits, safe drivers can save between 5% and 20%. Your rates can also increase if you repeatedly demonstrate reckless driving habits.

MilesMyWay. If you travel less than 8,000 miles per year, this program could help lower your premium. Policyholders pay a flat monthly fee plus a per-mile surcharge. The fewer miles you drive, the more you can save – up to 25%, according to the company website.

Key offerings by American Family

American Family offers all of the standard coverages for car insurance. Their liability-only policies meet all state requirements and their full coverage policies will cover the cost to repair or replace your vehicle after an accident or other incident.

American Family also offers a variety of add-ons that can be included in your policy for an extra premium. Here are a few of the policy add-ons that American Family offers:

• Rental reimbursement coverage
• Emergency roadside assistance
• Uninsured motorist protection
• Gap coverage
• Personal injury protection (PIP)
• Medical expense coverage
• First accident forgiveness
• Diminishing deductible
• Ridesharing

Making the choice: Why go with American Family?

American Family is an excellent choice for car insurance if you live in one of the states where they write coverage. It offers competitive rates on full coverage car insurance and earns high marks for overall customer satisfaction and online shopping and service. AmFam offers two usage-based insurance (UBI) options, as well as coverage options for ridesharing and gap insurance.

American Family is financially sound, with an A+ (Superior) AM Best rating.

Before you sign up: Things to consider

Although American Family has very low rates for full coverage car insurance when compared to the four largest carriers, its rates for liability and minimum coverage are less competitive. Also, American Family isn’t available nationwide the way the largest insurers are.

It currently writes insurance in these states:

• Arizona
• Colorado
• Georgia
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Minnesota
• Missouri
• Nebraska
• Nevada
• North Dakota
• Ohio
• Oregon
• South Dakota
• Utah
• Washington
• Wisconsin

American Family car insurance: Our verdict

American Family is an excellent choice for coverage. The company offers great rates for full coverage car insurance, plus top-notch claims handling and customer service, according to policyholders. The one drawback? The carrier only does business in 19 states.

Methodology

Rates were collected from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for the following: state minimum liability insurance, standard liability with coverage limits of 50/100/500, and full coverage with liability limits of 100/300/100 and a $500 comprehensive and collision deductible.

We analyzed more than 53 million quotes, more than 34,000 ZIP codes and 170 insurance companies nationwide.

Note: 100/300/100 means up to $100,000 for the medical bills of those you injure, up to $300,000 per accident for bodily injury liability for all persons injured in one accident, and $100,000 to repair other drivers’ cars and property that you damage.

AM Best’s Financial Strength Ratings (FSRs) are an independent assessment of an insurer’s financial strength and ability to meet its policy and contract obligations. Best’s FSRs are based on a graded scale from A++ (Superior) to D (Poor). For more information, visit AM Best’s ratings guide. For the latest AM Best credit ratings, visit www.ambest.com  

The National Association of Insurance Commissioners (NAIC) Complaint Index analyzes consumer complaints submitted to state insurance departments. The Complaint Index is used to compare a company’s performance to others in the market. The National Complaint Index is benchmarked at 1.0. For example, a company with a score of 2 has a complaint index that is twice as high as expected in the market. A company’s complaint index score is determined by dividing the number of complaints by its share of premiums in the U.S. market.  

J.D. Power is a marketing, consumer intelligence, and data and analytics company that publishes a variety of studies on the insurance industry and carriers. The rankings included in this story originate from JD Power’s 2024 U.S. Insurance Digital Experience Study, 2024 U.S. Insurance Shopping Study and 2023 U.S. Auto Insurance Study.

CRASH Network’s Insurer Report Card is an annual survey of more than 1,100 collision repair professionals nationwide. Participants awarded each company a grade from A+ to F based on this question: “How well does this insurer's claims handling policies, attitude and payment practices ensure quality repairs and customer service for motorists?” Those polled also indicated whether or not they participate in that insurer's direct repair program.