USAA Home Insurance Review

USAA has an impressive reputation for providing quality coverage and customer service, but it’s only available to military personnel, veterans, and their families.

USAA offers homeowners insurance to former and active-duty military personnel and their families. It includes complete coverage for all major perils, and it offers several endorsements to customize your policy in case you need added protection. USAA doesn’t offer much in the way of discounts, but its rates are known for being affordable. It’s one of the few home insurers that pays you the complete replacement cost of your home without factoring in depreciation, so you don’t have to worry about paying out of pocket.

Despite its limited accessibility, USAA is the fifth-largest home insurer in the nation and much of this popularity stems from its incredible customer service. It routinely scores at the top of customer satisfaction surveys, in many cases beating the competition by a significant margin. However, it doesn’t offer branch locations, so if you’d prefer to deal with a representative face-to-face, you may prefer a company like State Farm.

The Specs

The Claim

USAA proudly serves members of the U.S. military and their families. It provides them with comprehensive home insurance protection at an affordable rate and the best customer service in the industry.

Is it True?

Yes. USAA is only open to active military personnel, veterans and their families. It protects your home against all types of perils, including fire, theft, vandalism, and natural disasters. USAA is one of the few homeowners insurance companies that pays you the complete cost to rebuild your home, without factoring in depreciation. It also covers lost belongings, including military uniforms, up to 75% of the insured value of your home, which is more than what most other insurers offer you. There’s also the option to customize your policy with endorsements for added coverage on valuables like jewelry and electronics.

USAA doesn’t offer many discounts to homeowners, but it’s still known for offering consistently affordable rates. Those looking to save a little more should consider bundling their home and auto insurance together and selecting a higher deductible. You’ll pay more in the event of a claim, but your monthly premium will be much lower.

Customer service is where USAA really shines, though. In J.D. Power’s 2015 U.S. Household Insurance Study, USAA scored 49 points ahead of the second-best insurer, Amica Mutual. Customers reported a high degree of satisfaction with all aspects of USAA’s service, from its rates and policy coverage to the clarity of billing statements and helpfulness of representatives. In terms of claims resolution, USAA scored third with most customers reporting an above-average experience.

Our Deep Dive

• Only for military personnel and family: USAA only serves active military personnel, veterans, and their former spouses and adult children. If you don’t meet one of these criteria, you’ll have to consider some other options.

• Coverage for total replacement costs: If your home is damaged, most insurers will pay for the cost of the repair, factoring in depreciation, which means the amount you receive may not be enough to cover the total. USAA pays the replacement cost without factoring in depreciation, so you don’t have to pay anything out of pocket besides your deductible.

• No branch offices: Unlike most insurers, USAA doesn’t have any branch locations you can visit in person. If you’d like to speak to a representative, you’ll have to reach out to the company via phone or email. This shouldn’t be an issue for most customers, though, given the company’s reputation for providing excellent service.

• Few discounts: Apart from bundling home and auto insurance, there are few ways to save on your homeowners insurance. USAA gives discounts to those with new homes, security systems, and residents of Firewise communities, but that’s about it. However, USAA’s rates are known for being affordable, so even without discounts, you may still be able to get a good deal.

• Prompt claims service: USAA operates a 24/7 claims center, so you can get started filing your claim right away. You can do so online, over the phone, or through one of the company’s mobile apps. Once your claim has been submitted, you can track its progress online every step of the way. USAA is known for its quick turnaround times, so you shouldn’t have to wait too long before your home is good as new again.

• Covers cost of replacing possessions: While all insurers cover the loss of personal possessions to some degree, few companies give you as much protection as USAA. It will pay to replace damaged or stolen items up to 75 % of the insured value of your home.

• Customize your policy with endorsements: USAA offers several optional endorsements if you feel the basic policy doesn’t provide you enough coverage. For example, if you live in an area prone to earthquakes or hurricanes, you can add endorsements to protect against this type of damage. There’s also endorsements to cover certain valuable items like computers, jewelry, and credit cards.

• Identity theft coverage: If your identity is stolen, USAA will pay up to $5,000 to cover the costs of restoring your identity. These include lost wages and legal fees.

• Military uniforms covered: USAA will pay to replace any military uniform that is damaged due to a covered loss.

• Mobile policy management: USAA has mobile apps for iOS and Android devices. These apps enable you to view your policy documents, including ID cards, pay your bills, get a quote on a new policy, and file a claim. If you use any of USAA’s other services, like their banking or investment products, you can also manage these accounts from the app.

Cost Rundown

Homeowners insurance rates vary, depending on several factors like location, home age, and creditworthiness. Every company weighs these factors slightly differently, so it’s best to get quotes from several companies to ensure you’re getting the best deal.

Rates also depend on the types of coverage you’re interested in. As a general rule, most homeowners insurance policies cover the following perils:

• Damage caused by aircraft
• Damage caused by vehicles
• Explosion
• Fire or lightning
• Riot or civil commotion
• Smoke damage
• Theft
• Vandalism
• Volcanic eruption
• Windstorm or hail

Certain natural disasters, like earthquakes and floods, are not covered under traditional insurance policies, so if you live in an area where these disasters are common, you’ll need to purchase extra coverage. You may also want to purchase endorsements for valuables like jewelry, art or electronics.

Cheaper (or Free!) Alternatives

Lenders require you to have homeowners insurance in order to get approved for your loan, so there’s no way to skip it. However, there are some steps you can take to decrease your rates with all insurers:

• Compare rates from several companies. This is the best way to ensure you’re getting the most coverage for your money.

• Improve your credit. A higher credit score translates into lower rates on your homeowners insurance.

• Disaster-proof your home. For example, if you live in an area known for bad storms, install storm shutters on your windows.

• Install a security system. Many home insurers, including USAA, will give you a discount if you have a monitored security system in your home.

• Bundle home and auto insurance. If you’re interested in both home and auto coverage, get them both through the same company, as nearly every insurer offers discounts for this.

• Choose a high deductible. This will raise your out-of-pocket costs when you go to file a claim, but it will significantly reduce your monthly premiums.

The Competition

• GEICO: GEICO doesn’t offer its own homeowners insurance policies. Instead, it partners with a variety of local lenders to offer you coverage. Customers appear happy with the service they receive, according to J.D. Power’s survey, where GEICO received an above-average rating. However, it’s a good idea to do a little research into the company that will actually be underwriting your policy before you make a purchase.

• Allstate: Allstate has a huge selection of homeowners discounts, but despite this, its rates are typically more expensive than those offered by the other companies on this list. It offers a unique RateGuard option, which works like accident forgiveness for your home. If you purchase this add-on, you don’t have to worry about your rates increasing following your first claim. Allstate also offers a good selection of endorsements, making it easy to customize a policy around your needs.

• Progressive: Progressive, like GEICO, doesn’t underwrite its own policies, so once you’ve made your purchase, you deal exclusively with the underwriter. According to J.D. Power’s survey, customers don’t seem that satisfied with the deals they get through Progressive. It scored just below the national average. However, Progressive’s selection of endorsements is hard to match, so if you’re interested in building a custom policy, it’s a good company to choose.

• State Farm: State Farm is known for its impressive customer service, but its homeowners insurance customers were less impressed with its rates, according to the J.D. Power survey. Unfortunately, State Farm doesn’t offer much in the way of discounts to help you save. However, it offers solid homeowners insurance coverage and endorsements to customize your policy, so if you place a high value on customer service, State Farm may still be a good deal to you.

What Others Are Saying

• The National Fire Protection Association praised USAA for its decision to offer homeowners discounts to California residents who reside in Firewise communities. The Firewise program is aimed at reducing the risk of wildfires in areas that are prone to them. When asked to comment on USAA’s decision, an NFPA spokesperson said: “This is clear recognition from a major insurer and by an insurance regulator that wildfire mitigation by homeowners across a community makes a real difference to prevent future losses…USAA realizes that it’s not just about one house in a neighborhood. When a whole neighborhood or community takes action, everyone can benefit by reducing the threat of a wildfire.”
• Insurance Journal reported that USAA was one of the winners in the first Innovation in Insurance Awards, held in 2016: “USAA, USA, won the Digital & Omni-channel Distribution award for its ‘Digital Virtual Assistant,’ which leverages web and mobile channels to allow more members to satisfy their needs without the assistance of a representative.”
• Claims Journal highlighted USAA’s fourth consecutive year atop Temkin’s customer satisfaction survey in 2014: “USAA has maintained its position as the top-rated insurer for the fourth year in a row, earning a 78% rating and rank of 29th out of 268 companies across 19 industries.”

USAA home insurance offers quality coverage, low rates, and its customer service is unbeatable. It isn’t an option for everyone, but if you’re in the military, or are an immediate relative of someone in the military, it’s worth checking out.