Updated November 19th, 2020
Shaun Fyffe
Insurance Author
In 1922, five fellow Army officers in Texas formed a group along the lines of a cooperative or a mutual group to find a way to insure their collection of automobiles and equipment.
USAA Car Insurance Focusing on Military Personnel
By maintaining their focus on the men (and later women) who served our country in the armed services, they were able to grow and even thrive during the Great Depression, the Dust Bowl, and WWII.
Today, United Services Automobile Association (USAA) routinely rings in at either the 5th or 6th largest car insurance provider in the country (alternating that position with Farmers) with an annual direct premium approaching $8 billion.
Note: As illustrated above, USAA can offer quotes from 2 to 10% lower than the average premium for a 30-year-old driver. When I compared quotes side-by-side for any driver, no matter the circumstances, USAA was able to beat each competitor 90 percent of the time.
USAA can boast membership and participation by more than 90% of currently active military service personnel.
Membership Eligibility
Maintaining its focus on the men and women who serve or who have served our country and their families, USAA requires certain membership conditions for drivers to access car insurance through them.
Membership in USAA (and therefore access to its products and services) is limited to:
Active retired, and honorably separated officers and enlisted personnel of the U.S. military
Officer candidates in commissioning programs (Academy, ROTC, OCS/OTS)
Note: As illustrated above, I compared USAA with a direct competitor and credit scores. I compared each credit score from poor (350) to excellent (800). Every time USAA was able to offer the same coverage for less price. This is good to know if you have poor credit.
Adult children of USAA members who have or had a USAA auto or property insurance policy (children under the age of 18 can be added to a parent or legal guardian’s policy and after they turn 18).
Separate policies can be purchased for them, or they can remain on a parent or guardian’s policy until they turn 25 or 26.
Depending on the state where they live and drive and in some circumstances or a full-time student).
Widows, widowers, and former spouses of USAA members have or had a USAA auto or property insurance policy while married.
And USAA does recognize same-sex marriages and legally recognized partnerships for this eligibility requirement.
USAA Products Available to the General Public
There are certain USAA products, including investments, financial planning services, and life insurance products available to the general public.
Note: Illustrated above is the average cost of a premium by price for USAA, Farmers, and Allstate. I compared a 20-year-old driver, a family of three, and a 50-year-old driver. Farmers and Allstate are 10% to 30% more expensive than USAA’s price in each instance.
USAA’s Rates by Violation Compared to Competitors
Below is a table comparing USAA’s average premium to national competitors by price.
I have included a speeding ticket, reckless driving, DUI, and an automobile accident with less than $1,000 and greater than $1,000 in damage.
| Violation* | USAA Premium | Farmers | Allstate | Liberty Mutual |
|---|---|---|---|---|
| Speeding ticket | $1,206 | $1,265 | $1,476 | $1,532 |
| Reckless driving | $1,447 | $1,578 | $1,654 | $1,711 |
| DUI/DWI | $1,951 | $2,132 | $2,321 | $2,539 |
| At-fault accident (damage | $1,032 | $1,121 | $1,237 | $1,411 |
| At-fault accident (damage > $1,000) | $1,332 | $1,417 | $1,538 | $1,699 |
*Your rates can vary depending on the state you reside in.
Policy Options
USAA is licensed to offer car insurance in all 50 states, the District of Columbia, and our territorial land.
It also offers unique coverage for established military outposts where service personnel are on extended deployment.
Drivers and car owners can build USAA policies using most of the standard coverage options, including:
– Bodily injury liability coverage
– Property damage liability coverage
– Collision coverage
– Comprehensive coverage
– Personal injury protection (PIP) coverage
– Medial payments & extended benefits coverage
– Uninsured/underinsured motorist bodily injury coverage
– Uninsured/underinsured motorist property damage coverage
– Roadside assistance
– Rental reimbursement
– Accident forgiveness
While USAA does not, generally speaking, offer GAP car insurance or loan/lease payoff options, it does offer that endorsement for drivers and car owners who live in the state of Washington.
If you have a loan on your vehicle you can ask if the finance company offers GAP insurance.
Note: Illustrated above is the average premium from USAA for a teenage driver. And up to a 50-year-old driver. In each instance, USAA offered quotes from 6% to 25% lower than a direct competitor such as Farmers or Allstate.
They are also routinely reviewing and upgrading the coverage options they can offer state-by-state.
It’s always a good idea to check in with them from time to time to see what is available in your state.
Generous Discounts
By focusing on a targeted group (military personnel and their families), USAA can maintain solid control over the prices and premiums it has to charge its members.
Even beyond the generous rates members will find, USAA offers an impressive range of discounts that members can apply for.
While not all discounts will be available in every state, USAA members can apply for discounts on premium for their car insurance coverage.
Below I have outlined common discounts offered by USAA.
Which I compared to Allstate, Farmers, and Liberty Mutual.
| Discount | USAA | Allstate | Farmers | Liberty Mutual |
|---|---|---|---|---|
| Multiple Policies | ✔ | ✔ | ✔ | ✔ |
| Multiple Vehicles | ✔ | ✔ | ✔ | ✔ |
| Good Student | ✔ | ✔ | ✔ | ✔ |
| Anti-Lock Brake System | ✔ | |||
| Air Bags | ✔ | ✔ | ✔ | |
| Anti-Theft Device(s) | ✔ | ✔ | ✔ | ✔ |
| Defensive Driver | ✔ | ✔ | ||
| Good Driver | ✔ | ✔ | ✔ | ✔ |
| Student Away at School | ✔ | ✔ | ||
| Green Vehicles | ✔ | |||
| Affinity Membership Alum | ✔ | ✔ | ||
| Advanced Purchase | ||||
| Pay in Full | ✔ | ✔ | ||
| New Vehicle | ✔ | ✔ | ||
| eSign or ePay | ✔ | ✔ | ||
| Annual Mileage | ✔ | ✔ | ✔ | ✔ |
| Military | ✔ | ✔ | ||
| Homeowner | ✔ | ✔ |
Members can also receive discounts of up to 90% off standard premium if they store a car.
Especially if storage is due to a deployment or other military-related event.)
Excellent Ratings
While joining USAA has its own incentives as an organization that supports our servicemen, women, and their families.
The consistent high marks earned by USAA are other impressive reasons to consider them for your insurance and financial investment needs.
| Industry | Rating* | Value |
|---|---|---|
| NAIC | Complaint Index Rating | .88 |
| J.D. Power | Claims Satisfaction Rating | 5 |
| A.M. Best | Financial Strength Rating | A++ (Superior) |
| Moody's Investors Service | Financial Strength Rating | Aaa (Exceptional, highest of 21 possible ratings) |
| Standard & Poor's | Financial Strength Rating | AA+ (Very Strong, second highest of 21 possible ratings) |
*Current as of January 2020
Combined ratings from A.M. Best and Standard & Poors give USAA a perfect score of 100.
The only other major provider in the country to earn that rating is Amica.
J.D. Powers & Associates has a five-point scale they use to rate companies, and USAA has earned a five-point rating for several years in a row.
A nationwide survey of state insurance commissioners and departments indicates that few people have complaints about USAA.
The company earns a 4.9 ranking in a consumer complaint survey where 5 is the highest mark given.
The higher the mark, the fewer the complaints from consumers.
If you or your relatives have served this country as a member of the armed services, you owe yourself the opportunity to get some of the best and most affordable coverage you can buy.
USAA could be your source for it.
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