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UPDATED: Mar 13, 2020
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USAA, or United Services Automobile Association, is a specialty insurer that provides coverage to military personnel and their families. In addition to auto insurance, the company provides homeowner’s insurance, life insurance and financial services like banking and credit cards. For qualifying members, USAA has some of the lowest rates and highest-ranked customer service of any insurance company. Coverage is not open to everyone, however, which does pose a major limitation to most people seeking affordable insurance.
Based in San Antonio, Texas, USAA was founded in 1922 by a group of Army officers. Since then, it has grown to insure over eight million people. Most policies are sold through direct marketing utilizing the company’s website and toll-free number rather than agencies. Although it does run advertisements, USAA does not rely on an advertising campaign as heavily as other direct sales companies like Geico or Progressive.
Because all members need to either be in the armed forces or have a direct family relation to someone in the service, USAA receives most of its new policies through private invitations and family growth. As new drivers are added to their parents’ policies, they often choose to stay with the company and get policies of their own.
Children of current USAA members can obtain their own policies whether or not their parents are military personnel. Additionally, people who have ever been insured with USAA are able to return to the company and resume their membership at any time as long as their driving record is admissable.
USAA is a niche insurer, and as such it can afford to be selective. One of the ways it keeps cost down is by keeping fairly strict risk assessments. People with poor driving records may not qualify for USAA even if they are in the service.
What Makes USAA Unique?
Aside from its limited scope, USAA has several attractive features and discounts that make it stand out from the competition:
— Accident forgiveness for around $1 a year
— Flexible payment options to customize to a person’s pay schedule
— Affordable roadside assistance and towing
— Discounts for defensive driving and other driver’s education classes
— Loyalty discounts; USAA pays you back a month’s premium each year as a reward for loyalty
— Rate decreases for low annual mileage
Because people in the military may often need to put their vehicles in storage during deployment or other situations, USAA offers an extremely affordable policy for stored vehicles. Members can leave basic comprehensive coverage on the car and enjoy up to an 80% discount until the vehicle is put back into regular use.
USAA is also especially well-known for its exemplary customer service. It won the 2011 J.D. Power and Associates award for Customer Service Champion, and it’s received top rankings in customer service from Forrester Research, Inc., Satmetrix, Nunwood, EquiTrend and others. It’s also won multiple awards as an employer and financial institution.
How to Qualify for USAA Coverage
If you’re currently enlisted in any branch of the military or are a veteran, you automatically qualify for USAA coverage. If not, you may still be able to qualify if any of your blood relatives are in the military or currently carry USAA coverage. If your parents or grandparents have ever been insured with USAA, you may be able to qualify for a policy.
How much does USAA Car Insurance cost?
The overall cost of auto insurance will vary from one individual to the next, so it’s impossible to know for sure how much a policy will cost without getting an individualized quote. As a rule, USAA is able to provide cheaper insurance than most other companies. It can do this because, as a niche market, it has a smaller risk pool than other insurers. The fact that most customers are brand-loyal and carry multiple different accounts with the insurer helps the company keep costs low.
On average, people who switch to USAA save around $450 per year according to the website. A full coverage auto policy can cost as little as $80 per month in some cases, depending on the type of car being insured and the amount of the policy’s limits and deductibles.
The only way to know for sure how much your policy might cost is by obtaining a quote from the company. You will also need to prove your eligibility before purchasing a policy. If you can qualify, you can sign up for the policy online or over the phone after receiving your quote.
For people who qualify, USAA insurance is one of the best companies. Although all insurers will have consumer complaints, most members of USAA are extremely satisfied with their service and cost. If you cannot qualify for USAA, you may be interested in pursuing coverage with another direct-sales insurer.
For example, Geico was founded in a similar manner and offers policies through the same venues; people who do not qualify for USAA may like a company like Geico or Progressive. On the other hand, individuals who would prefer a more hands-on approach to their insurance would benefit from a company like Allstate or State Farm that utilizes agencies.
By assessing your desires and qualifications, you can determine what insurance company will best suit your needs. This will help you choose a company based on more than just price, ensuring that you will have a long-lasting positive relationship with your insurer.