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Old 04-07-2013, 04:59 PM   #21
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Originally Posted by ziggy29 View Post
Not sure how much your dad has to buy. But if he can become a member, so can his kids -- and that alone might make it worth looking into if it's not too much of a hassle for him.
Well, you all are convincing me. I'm just fatigued. Caretaker fatigue. I just went through taking over dad's finances (discussed elsewhere). The guy was an insurance junky. He had a bunch of tiny life policies bought eons ago, that are still active. I suspect the salesmen got to him when mom and dad were freshly married. Then he has some junk insurance I'm dealing with. Trying to unwind, document and coordinate all of this has been a huge chore.

BUT, sounds like this one might we worth it. I just have to find a product that he could use that won't cost much.
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Old 04-07-2013, 05:33 PM   #22
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Originally Posted by JoeWras View Post
Well, you all are convincing me. I'm just fatigued. Caretaker fatigue. I just went through taking over dad's finances (discussed elsewhere). The guy was an insurance junky. He had a bunch of tiny life policies bought eons ago, that are still active. I suspect the salesmen got to him when mom and dad were freshly married. Then he has some junk insurance I'm dealing with. Trying to unwind, document and coordinate all of this has been a huge chore.

BUT, sounds like this one might we worth it. I just have to find a product that he could use that won't cost much.
My dad had a watch he inherited. I had him insure it, I paid the premium, and I think it was $45 for the year. My dad's 92 so I probably have to set this up to pay from my charge account automatically. There may have been something cheaper to do but this did the trick. As I understand it, he has to keep some insurance as long as he lives - but meanwhile, I can get all the benefits too. Also my brother.

If I find out anything more I'll share - I tried to get a house insurance quote online yesterday but wasn't sure it was matching what we have now, to compare, and I need to call M-F business hours to reach someone. What I got was higher than our AAA insurance rate so I'm not sure it matches.

I strongly suggest phoning during the weekday to talk to them about it. They seem used to getting calls like mine, from adult children of WWII vets who are pretty old. I only wish I could take over his bills... which he loses and doesn't pay. He has the money, he's just totally disorganized. So far the utilities are still on.
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Old 04-07-2013, 09:21 PM   #23
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Amethyst, USAA didn't open membership eligibility to enlisted personnel until November of 2009.
I'm so glad you posted this info. DH's father was a merchant marine officer and qualified for USAA, and I wondered why my father didn't go with them since he was always looking for the best options for things like insurance. Since he wasn't an officer, now I know he wasn't eligible (he died in 2006).
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Old 04-07-2013, 11:30 PM   #24
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DW got into USAA because her dad was a Marine. We have all of our insurance policies and bank accounts there.
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Old 04-07-2013, 11:41 PM   #25
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I thought USAA sounded good based on all the rave reviews I've read on this forum so I encouraged my father to check it out a couple years ago. He called and got auto and home insurance quotes and they were almost TWICE the price of his current insurance and much higher than any of the other companies he got quotes from. I'm not sure why others are getting such good rates. Perhaps they don't want new customers or don't want the elderly. I had high hopes that USAA might be a good company, but they were dashed after hearing the outrageous prices they wanted for their insurance.
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Old 04-08-2013, 05:27 AM   #26
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My guess is that it may not have been an apples-to-apples comparison.
Insurance coverages for both homes and autos have such variation between companies that he may have been confused about exactly what he was comparing.
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Old 04-08-2013, 07:00 AM   #27
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I was enlisted- USMC 69-73, and joined USAA in 1999.
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Old 04-08-2013, 07:53 AM   #28
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DW got into USAA because her dad was a Marine. We have all of our insurance policies and bank accounts there.
Just curious, was DW's Dad a USAA member? My Dad (and actually my Mom), both deceased were in the Military. My Dad is buried at Arlington National Cemetery (Purple Heart with Cluster, Bronze Star with Cluster, field promotion to 1st Lt. (He never even graduated High school). But when I called USAA about 5 years ago or so (my parents were both recently deceased at the time) all they said was that’s all very nice, but no you can’t get insurance with us since neither of your parents are/were members. I guess that’s where they are losing money (the insurance side of the house).

They certainly seemed interested in “pushing” me into investing more money in their mutual funds (I had ~$55K invested in one of their bond funds at the time which was an IRA account that had built up from the few years back in the early 1980’s when I could put $2K a year in an IRA. I moved my $55K to an equivalent fund at Vanguard, and said good riddance to USAA. JMHO, they have a couple of decent bond funds. But if you can’t be a “full member” and get basic auto, home, umbrella insurance through them, why bother.

As people have said, if you are/were in the Military join if you can (a favor for your kids if you have any at a minimum). I wish I had pressed my parents on this when I was younger and they were still around, but they did not even have a car or money to invest. They just had to pay home owners insurance. Yeah,I know….I am grinding the proverbial axe here.
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Old 04-08-2013, 08:04 AM   #29
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Just curious, was DW's Dad a USAA member?
Yes he was.
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Old 04-08-2013, 08:07 AM   #30
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I guess that’s where they are losing money (the insurance side of the house).
Please provide a link to support your comment about USAA losing money on insurance. That's not what their annual reports say, so I'm really interested in hearing where your guess is coming from.
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Old 04-08-2013, 08:44 AM   #31
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Please provide a link to support your comment about USAA losing money on insurance. That's not what their annual reports say, so I'm really interested in hearing where your guess is coming from.
A misleading and/or erroneous assumption on my part about the insurance side of USAA (losing money). It does sound like from reading some of the posts here that USAA insurance is not necessarily any cheaper than Nationwide (my current carrier) or any other major Carriers.
So my apologies, I cannot provide a reference.
I was insurance shopping years 5 years ago after Erie cancelled my auto and umbrella policies due to DD having 4 at fault car accidents in 16 months in cars I owned (she was also on my policy). She got her own policy and I “gifted” her an older but reliable car in her name when she turned 18 so she just needed basic liability insurance.
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Old 04-08-2013, 09:02 AM   #32
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It does sound like from reading some of the posts here that USAA insurance is not necessarily any cheaper than Nationwide (my current carrier) or any other major Carriers.
You may be correct as I have not shopped my homeowner or auto insurance for a while.

One thing that bears consideration with USAA is the golden handcuffs "refund check" policyholders get each year:

Quote:
Since there are no shareholders, profits are retained for financial strength or returned to the members. Returns are accomplished through an SSA (Subscriber's Savings Account). Each year a portion of USAA's profit is retained as "unassigned," the rest is allocated to each member's SSA using a formula based on the amount of premium the member paid that year as well as the member's SSA balance. The allocation of capital to a member's SSA occurs early in the calendar year. Late in the calendar year a portion of the member's SSA is distributed to the member via checks or electronic funds transfer. Members with more than 40 years of membership also receive a special yearly "senior bonus" distribution which amounts to 10% of the member's SSA balance.
For me, this annual refund has recently averaged between $300 and $400, slightly less in years past. Now that I've reached the 40 year mark I'm getting back ~ $1,200/yr. When I factor that into the premiums they are very competitive.
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Old 04-16-2013, 11:22 PM   #33
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Let me share what I've learned from two USAA blogger conferences.

Even their Communications staff acknowledge that the membership criteria are confusing. Many of the changes in the last decade have been to make it easier for everyone (including the call center) to figure out the rules: "All who have served honorably, and their families".

REWahoo linked to the membership requirements. The fine print is also on the bottom of the screen at USAA.com:
Quote:
The term "honorably served" applies to officers and enlisted personnel who served on active duty, in the Selected Reserve, or National Guard and have a discharge type of "Honorable." Eligibility may change based on factors such as marital status, rank, or military status. Contact us to update your records. Adult children of USAA members are eligible to purchase auto or property insurance if their eligible parent purchases USAA auto or property insurance.
Note for sea lawyers: Yes, USAA really means "honorable", not general or OTHD. I've asked, and the answer has been "Those veterans need to appeal for a discharge upgrade."

"Membership" only means "vehicle & property insurance". Anyone (not just members) can open a checking account or a brokerage account with USAA, or buy their CDs. Anyone can buy their life insurance or an annuity. Anyone can apply for a USAA mortgage.

The reason USAA opened up the membership criteria is pretty straightforward. The military sizes after WWII, Korea, and Vietnam were all bigger than the military at the start of DESERT STORM. After 1991, the military actually drew down another 25%, and is in the early stages of drawing down an additional 10-15%. Meanwhile the number of veterans of all of those wars is declining even faster than the size of the military. Out of a total pool of 66 million eligible servicemembers, veterans, & families, USAA has a little over nine million members.

USAA focuses on member services more than on profits. (As REWahoo points out, "profits" are the annual distributions to shareholders.) The company got burned badly by a 1990s computer upgrade that ended up being scrapped, and since then all major projects have had to pay their own way. This means that the debit card rewards have been cut back to pay for regulatory requirements. Business checking took several years to get going (it's coming sometime this year) because although the member demand is there, they had to figure out how to set fees to pay for the costs. I'm told there are no loss leaders. Even the TV & Internet advertising campaign had to be funded by killing off the direct-mail solicitations and cutting back on print ads. Even the NFL made USAA a better sponsorship deal than NASCAR (although NASCAR may still be signing on someday).

Ironically, one of the most expensive parts of USAA is their mutual fund fees. They don't subsidize them with soft dollars or other marketing deals. The main reason they offer mutual funds at all (instead of licensing Vanguard) is because members want to consolidate all of their accounts with a trusted military-friendly business that takes 3 AM phone calls from Afghanistan.

Some of USAA's tech is funded by licensing their patents. They hold many patents for "deposit by scanner" and mobile devices, and they continue to file new patents on other tech. A tour through their Innovation Center is like Disneyland for geeks.

The company also prices insurance at its estimated costs. For example, USAA members who are Hawaii homeowners went most of a decade without being able to buy USAA home insurance. (First-time buyers only.) The reason was that their risk was too concentrated in one area and it's been over 20 years since Hawaii's last major hurricane. The probability of "no hurricanes for __ years in a row" is gettin' pretty small. When USAA started pricing Hawaii policies again, they quoted me a rate that was nearly 6x Armed Forces Insurance. However USAA is much larger, much better funded, and has better customer service than AFI. (Our decision was to raise our deductibles and go largely self-insured.) I'm not willing to pay the price to be fully insured, and I'm not sure AFI will survive a major Hawaii hurricane.

Frankly, the biggest drag on USAA's cashflow is the "more senior" members like REWahoo getting those righteous four-figure distributions from their subscriber savings accounts... I can't wait to join that elite club in 2021!

More details are at the links. Another good place to ask questions is on USAA's Facebook page, especially their member Bryan Sproles. He's so good at answering member questions (sometimes before USAA staff could answer them) that he was invited to the last conference. Great guy.

USAA and membership growth
USAA: Military Transitions, Home Circle, Auto Circle
Reader feedback on USAA interest rates and blog advertising
USAA’s savings goals and 529 plan calculators
USAA’s retirement planner and financial goal-planning tools
Answers to USAA’s questions
USAA’s underwear secrets
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Old 04-17-2013, 03:58 AM   #34
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I checked USAA rates against Allstate here in NJ about 2 years ago and they were about the same. There may be other benefits besides rates at USAA, don't know that, but from strictly a rate comparison, it wasn't a big enough difference to make me want to jump ship.

There's a coop called NJ Manufacturers here that has some very low rates and they pay a yearly dividend. They weren't taking any new customers last I checked.
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Old 04-17-2013, 06:38 AM   #35
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We continue with USAA Auto Insurance in NJ. I could save with another company (GEICO, etc.), but the customer service end is what concerns me. USAA has agreements with collision shop in the area that I am pleased with, so I compare every few years, but don't see a large savings.

Home insurance went up a great deal about 5 years ago, but swung back into line over the past few years. I think the costs of hurricanes and so on caused problems.

We received status from in-laws (they are both veterans), so didn't get the healthy rebate checks they did. There was some rebate for us most years I recall, but a lesser amount.

I have the pleasure of looking at USAA investment funds each week or so. The costs there are high for index funds (IMO), so comparison shop. We transferred our investments to Vanguard for this reason.
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Old 04-17-2013, 11:11 AM   #36
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Can anyone explain how the home/auto rebate works? Is there a formula? I've had quotes from USAA in the past but they have never been competitive with my current carrier. However, a rebate might change that perception.
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Old 04-17-2013, 12:03 PM   #37
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Go to the USAA website & search "subsriber savings account".
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Old 04-17-2013, 02:40 PM   #38
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They changed the name of it a few years ago; it's now just Subscriber's Account. AFAIK, there is no formula, just a percentage amount determined each year based on the company's performance.

You get two notices each year. One tells you how much of that year's profits are being placed in your personal Subscriber's Account. The other tells you how much of your current balance is being given to you (you can take cash or apply it to your premiums). Old farts like me also get an additional amount (Senior Bonus).

Quote:
Subscriber's Account
As a reciprocal (member-owned) insurer, USAA holds a portion of its capital in each member's name in a Subscriber's Account. At the discretion of the USAA board of directors, USAA may use these funds to support its mission and goals.

Subscribers' Accounts play an important role in USAA's financial structure by providing capital to satisfy legal and regulatory requirements, support current and future operations, and pay large unexpected losses such as member claims from catastrophes.

Subscriber's Account Distribution
If there are sufficient funds at the end of the year, the USAA board of directors may authorize a portion of the Subscriber's Account balance be paid out to the member.

Senior Bonus
An amount from the Subscriber's Account balance paid out to members with 40 or more years of membership. The USAA board of directors may authorize the Senior Bonus for such longtime members in recognition of their loyalty.
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Old 05-21-2013, 04:51 PM   #39
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USAA member since 1986. Always happy w/ their customer service. Most of my CC and savings have been with them along w/ car and home insurance.
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Old 05-21-2013, 05:19 PM   #40
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38 year USAA member here. Premiums have skyrocketed over the last few years, especially home owner insurance. I don't like their recent heavy TV advertising I see all the time, as I think those costs conribute to premium increases.

Nevertheless, glad to be a member and will stay due to outstanding customer service. Rated #1 in Consumer Reports.
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