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USAA is a large insurance and financial services company with a unique market; they serve members of the U.S. military and their families. For nearly a hundred years they have been providing a range of insurance products, covering home, auto, life, and more for service men and women.
Marketed as the company that understands the needs of military families, they have a few features to their products you won’t find elsewhere.
USAA opened it’s doors in 1922 as United States Army Automobile Association, providing car insurance to military members who were having trouble obtaining coverage elsewhere due to insurers who considered them high-risk. Two years later they opened up their products to members of other branches of the military and changed the name to United Services Automobile Association (USAA).
In the 1960s, USAA expanded its product range to include homeowner’s and life insurance. They have a large headquarters in San Antonio, TX, and also have offices in England and Germany.
USAA is not a corporation, but rather an inter-insurance exchange. This basically means that all of the policyholders insure each other, and are all owners of USAA’s assets. There are no stock or shareholders, and the company’s profits are kept either as assets or returned to the policyholders – we’ll take a closer look at how that works further down in the section on Subscriber’s Accounts.
USAA is a full-service insurance and financial services company, offering banking, investment services, retirement planning, and more in addition to insurance policies. Some of their policies are underwritten by wholly owned subsidiary companies. They meet nearly every insurance and financial need that the average person could possibly need, making them a popular choice.
USAA ranks as the 6th largest auto insurer in the nation according to a 2015 Insure.com study, and the 10th largest property & casualty insurer according to a 2014 FIO report. That makes it pretty clear that limiting their market to the military is not hurting the bottom line. In fact they continue to show a lot of growth and are likely to continue that way.
Who Can Join USAA
USAA is different from most insurance companies – many may offer affiliate discounts, but they don’t cater to one specific population. In order to obtain insurance from USAA, you will need to be eligible. The website provides a questionnaire to help people determine whether or not they will qualify.
A basic list of qualified people includes:
- U.S. Military personnel and officers, whether active, retired, or honorably discharged
- Children of current or former USAA members who had auto or property insurance
- Academy cadets and midshipmen, those in ROTC (Reserve Officers Training Corps) on scholarships, and officer candidates
- Former USAA members who have had auto or property insurance
- Widows, widowers, or former spouses (who are not re-married) of USAA members who had USAA insurance while married
USAA has historically offered products to members of certain government agencies as well, but some of those rules have changed recently. It’s best to check with the company to determine if you qualify.
USAA offers all of the basics of personal insurance as well as some specialty policies. Their product range is fairy comprehensive, so they are likely a one-stop shopping option for many people.
Auto insurance is USAA’s original product they have been offering for almost 100 years. USAA offers everything you would expect from a comprehensive auto policy, including liability, comprehensive and collision, and many other options. Discounts include many of the choices offered by other major insurance companies along with a few more unusual ones.
Here are some of the available discounts:
- Safe Driver
- Defensive Driving Course
- Good Student
- New Vehicle
- In-Storage discount of up to 90%
- Military Installation discount for cars kept on military bases
USAA auto policies also include roadside assistance and guaranteed renewal as long as you meet a few simple eligibility requirements.
Collector car insurance is also available, although it is underwritten by a different company.
Insuring a variety of homes, including single-family dwellings, mobile homes, and condos, USAA home insurance provides a number of features:
- Full replacement cost coverage for the home itself
- Personal property coverage up to 75% of the home’s insured value
- Up to $5000 in identity theft coverage
- Coverage for assessment costs charged by condo associations
- Personal liability coverage
In addition to insuring owner-occupied dwellings, USAA writes rental property coverage, which caters to the needs of landlords. Coverage includes dwelling protection, liability, and loss of income from a home that is vacant during repairs under a covered loss.
This type of policy is designed to cover the personal property of those who are living in a rental property. It also offers tenants liability coverage and other features and benefits. Because renters don’t need structure coverage, this policy is usually very affordable, and is even more so with multi-policy discounts.
Valuables and Collectibles
USAA writes policies to cover high-value items such as jewelry, art, musical instruments, and collectibles. The Valuable Personal Property policy is written as a stand-alone, but you are required to have a USAA homeowner’s insurance policy to qualify.
The Collectibles policy can cover a variety of collections including memorabilia and more, and is also a stand-alone policy that does not require an underlying policy. It’s fairly unusual for insurance companies to offer stand-alone policies of this nature, and collectibles are usually included under other headings, so that makes USAA stand out in terms of covering special items.
Motorcycle, Moped, and ATV
USAA writes policies for a variety of motorcycles, mopeds, scooters, and ATVs. They offer discounts for members who have other policies with the company and a series of other discounts including safety course. Their motorcycle insurance covers all of the basics as well as a variety of motorcycle-specific benefits.
Like their auto insurance, USAA includes roadside assistance with these policies as an added feature. Motorcycle insurance is underwritten by a third party.
USAA has insurance for a variety of watercraft, including pleasure boats and personal watercraft. They offer several discounts with these policies as well, including safety course discounts and a multi-policy discount for insuring more than one watercraft.
USAA offers this product underwritten by a third-party company to cover motorhomes. The coverage includes vacation liability and emergency expenses, as well as coverage for the motorhome itself as a vehicle. These policies also come with roadside assistance, just like all vehicle insurance from USAA, which is a nice perk on a motorhome, since towing and other assistance can be very costly.
Aviation is one of the more unusual products offered through USAA, although it is not underwritten by the company. It covers personally owned aircraft, aviation businesses, and has higher liability limits available. It will also cover you when flying an aircraft that is owned by someone else.
Finding a product like this from a major insurer definitely sets USAA apart and also points to their military connections.
USAA has a basic range of life insurance products available, and caters to the needs of military personnel by offering life policies that do not have the standard war exclusion. Life products come in four main types:
- Term Life
- Military Term
USAA has a list of other products to round out their offerings: umbrella, special event insurance, pet insurance, travel insurance, and even small business insurance. They also write flood insurance through the National Flood Insurance Program.
Prices and Premiums
USAA offers online quotes as well as over-the-phone services, but you must have a login to the customer portal in order to obtain quotes. This makes it more difficult to comparison shop, but is likely intended to avoid providing quotes to those who are not eligible for the products but may not realize it.
Because of the very specific market for USAA, they do not tend to show up on comparison shopping sites, and if it was not for their fairly major advertising presence in recent years, it’s likely most non-military customers would not even know they existed, much less request a quote.
Like most insurance companies, USAA promises big savings, averaging $434 per year for those who switch. Also like other insurers, we have to remember to take this number with a grain of salt, because it only includes those people who actually switched and doesn’t take into account anyone who was not pleased with the quote and chose to stay with another company.
That said, they do have a reputation for offering affordable car insurance rates, and they offer a pretty good list of discounts that are likely to help keep rates down.
As previously mentioned, USAA is a membership insurer, which means that anyone who has a policy is also an owner of the company. USAA uses something called a Subscriber’s Account through which they distribute any profits that are not retained to maintain the company’s financial strength.
Capital is allocated to these accounts and a portion of that money is returned via check to members each year, as long as there is enough of a surplus to do so. As an added bonus, any member of more than 40 years duration gets a Senior Bonus that is 10% of the account balance.
USAA has a simple FAQ regarding how these accounts work on their website. When a membership ends, the Subscriber account balance is paid out in full; this applies even when a member passes away as a benefit to any surviving family members.
Distributions from this account can certainly be considered a bonus that adds value to the policy and can offset premium cost. It is something well worth keeping in mind when comparing USAA rates against other companies.
Advertising and Media
Not surprisingly, all of USAA’s advertising is directed at military personnel and their families. Also not surprisingly, the company takes a patriotic approach to selling its products and common themes are support and gratitude to the military for their service, and pride in serving them in return.
USAA is also involved in sponsorship, including the NFL – they were named the NFL’s Official Military Appreciation Sponsor. They also sponsor the annual Army-Navy college football game. You’ll of course see their name as sponsor on a long list of military charities and groups, which is in keeping with the company’s market and goals. USAA accepts requests for sponsorships and donations through it’s website, something that is not often seen.
As a direct marketing company since its inception, USAA has always relied on a lot of word-of-mouth and direct campaigns, but has stepped up its game in television and radio advertising in recent years. The company’s advertising spots are much more visible than they were even ten years ago, but the message has stayed the same. As a result of the advertising, the company has seen a lot of growth. Surprisingly though, they have moved in recent years towards tightening their list of eligible members, something that seems to reduce their customer base a bit.
USAA has one of the highest rated claims departments of all auto insurance companies, which is a huge mark in their favor. J.D. Power’s 2016 Claims Satisfaction survey gave USAA a 5 out of 5 rating for overall service. Four other companies, Amica Mutual, The Hartford, NJM Insurance Co, Auto-Owners Insurance, received 5 out of 5.
The only particular area of the survey that showed a rating on the low side was the Service Interaction part of the claims service, where USAA got only 3 out of 5. However, compared to the ratings with other companies of a similar size, this ranking is stellar.
Claims can be filed in a variety of ways, making it quick and easy for customers. The website offers all of the information you need to file. Choices for filing are:
- Online, for auto and for home, via the customer portal
- Using the USAA mobile app
- By phone at 1-800-531-USAA
Roadside assistance claims and auto glass claims can also be handled through the same online service. Members can follow up on claims easily online or by calling the same phone number for an update.
The mobile app allows quick upload of pictures from the accident scene, request roadside assistance, and view the status of your claim. This is the type of service that is quickly becoming expected from major insurance companies.
USAA also has disaster assistance teams with mobile claims units that can arrive on the scene of major catastrophes to assist members with recovery and claims handling. Again, this is an expected service for a company this large, and USAA seems to have this well in hand.
Claims process information is not readily available on the USAA website, nor is it easy to locate the online claims center, which should be front and center on any insurance website, since it’s one of the major reasons for people to visit the site. While USAA is certainly offering the technology to handle claims the way today’s insurance customers expect, their access to this information is somewhat lacking.
Consumer Feedback and Ratings
We’ve already noted how well USAA scores in claims satisfaction, which is a huge part of any insurance company’s reputation, but there is more to a well-rounded customer service experience.
Again, USAA scores very well in J.D. Power’s 2017 Insurance Shopping Study, ranking 5 out of 5 just as with the claims satisfaction. Only one company ranked as well, although overall insurance companies tend to rank better in this type of survey – it’s fairly easy to get good service when it comes to buying a policy, but less common to find an equally good ranking for the claims side of things. Most companies do well when taking your money, but when it comes to paying out claims, fail the test. USAA ranks well on both ends.
USAA is well known for consistently rating high on various customer service surveys and reports. They have won numerous awards over the years and are almost always found at the top in any sort of rankings. That said, there is some reason for concern that things could be changing.
The Better Business Bureau gives USAA an A+ rating, and there have been 1405 complaints against the company in the past three years, with 524 in the past 12 months. That’s a middle of the road complaint level for a company of this size.
Bottom line is that while it’s not an extremely large number of complaints for a company as big as USAA, it is higher than some competitors – surprisingly so considering high rankings elsewhere.
One of the major things that jump out from the reviews written by USAA customers is that they feel the company is not as good in terms of service as it once was. The common refrain among complaints is that people who have been insured for many years have seen service go downhill. Some of the complaints include large rate increases, rude customer service personnel, and claims that have been processed poorly or denied.
Complaints found in large numbers on ConsumerAffairs.com really seem to bear this out. There are 156 one-star rankings out of 199 total rankings. Only 23 five-star reviews appear on the site, which is really not unusual for a company of this size on this site, and on similar sites.
Keeping in mind the fact that most people only write a review of a company when they are unhappy with the service – sites like ConsumerAffairs are basically a place to lodge complaints – the common complaints raise some questions regarding whether USAA will continue to receive such high survey ratings in the future if there is in fact a change in the way they are treating customers. This will be something to watch in the future.
USAA is a highly rated insurance company that is almost always ranked at the top for customer satisfaction. They are generally known for good rates and offer a good list of discounts across the board on their many products. Overall, they are one of the best-rated major insurance companies in the nation.
The bad news is that USAA only writes policies for a very specific market, therefore those who are un-eligible, none of the many perks and accolades have much bearing. For those who do qualify under the eligibility requirements, USAA is well worth considering and likely to be a very good value.
With a wide range of products, USAA can meet most people’s insurance needs, and they can further cover all kinds of financial needs as well, allowing you to keep everything under one roof. They even offer some benefits other insurance companies don’t, specifically targeted at military members and their families, which will further enhance their appeal. Some increasing complaints about the company are worth keeping an eye on, but may simply be a symptom of growth.
If you meet the requirements, USAA is definitely worth considering for your insurance needs.
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