USAA vs. GEICO

[friar1610]

I noticed on the previous thread that several people said that USAA was a better deal for insurance than AARP's plans. I've been a USAA member for all of my adult life - have homeowners, auto, life, etc. with them.

About six months ago I got a mailing from Navy Federal Credit Union (to which I've also belonged for my whole adult life) pitching GEICO auto insurance as part of a partnership. I called GEICO and got a quote for exactly the same coverage I had with USAA. It was actually quite a bit cheaper - don't remember exactly but somewhere around $100/6mos. I called USAA and asked them if they could lower my rates. They couldn't but suggested a few ways to reduce my premium by raising deductibles. But I figured that if I went back to GEICO with those new (lower) deductibles they still would be cheaper than USAA.

In the end, I stuck with USAA for several reasons:
- Somehow it feels "disloyal" not to stick with them.
- They gave me excellent claims service on several auto accidents, none of them my fault. (They were a little chintzy on a homeowners claim for hail damage compared to what other people in the neighborhood were getting.)
- The Subscriber's Savings Account annually sends me a nice check which reduces the effective cost of the insurance. (Although not all of that refund is attributable to auto insurance.)

Has anyone else gone through the same decision making process and, if so, what did you do? Does anyone have pro's or con's about GEICO?

 

[REWahoo]

You say you've been with USAA all your adult life. Not sure how long that might have been, but once you've been with them for 40 years they start paying the money in your Subscribers Savings Account back to you - 10% of the account balance per year. See this thread.

 

[Nords]

Has anyone else gone through the same decision making process and, if so, what did you do? Does anyone have pro's or con's about GEICO?

GEICO offers discounts to Berkshire shareholders too.

I check GEICO against USAA and Progressive every year and USAA is still winning the race on our minimal liability high-deductible no-perks insurance. GEICO's website gave me a quote that was about 10% higher. The difference is usually about the amount of the subscriber's savings account.

I know GEICO screens their rolls to weed out "unsuitable" customers, but one year they dropped a shipmate for no other apparent reason than to piss him off. So I've always been a little concerned about their reliability.

USAA, however, has always been top-notch and worth the money. We've never made a claim but I've been a witness in a couple nasty he-said/they-said collision disputes and USAA didn't back down from the fight.

The "GEICO or USAA?" debate may be in the same category as Vanguard-Fidelity, paying off the mortgage, and "tastes great-less filling".

 

[OAG]

GEICO Member for about 15 years, no real problems. Then switched to USAA (some of us are just slow) and been there since 1987. No problem with either one but, USAA is less expensive (mainly for what Nords has mentioned), very easy to deal with, and from what I have seen extremely fair on settlements. I lived in Florida for 20 years and saw how they handled Hurricane claims - very good and fast. IMHO, I would keep the USAA policy and never look back.

 

[lets-retire]

I had Geico way beck when I was much younger and dumber. One time I had forgotten to mail the check to Geico so I went to the local office and paid the bill, with cash. Unfortunately I lost the receipt. A couple weeks later I received a notice saying I had not paid the bill and my insurance would be canceled. After going tot eh office and talking with the same lady I had paid, I gave up and went to Providian.

As time went by I changed to USAA and couldn't be happier. There have been a few instances when we had to asked harder questions to get our way, but overall not too bad. Like when we were told they didn't insure houses within, IIRC, 5 miles of the Gulf of Mexico. They were asked who insured their buildings, of course they were self insured. When it was pointed out that they had a multi-million dollar building less than a mile from the Gulf they had someone else call and give us a good quote.

 

[RE2Boys]

While USAA has changed in the past 8 years or so, they spend a lot more time marketing than they used to, but I've experienced only top notch service from them.

Last summer our house was hit by lightning and started a fire. USAA was there the next day, gave us an immediate advance toward living expenses, another advance to cover 5 months rent when we found a place to stay, and advanced me 90% of the rebuilding/restoration costs (no mortgage or bank involved). I figure I made about $1k in interest on their advances and the contractor knew who had the money and who he had to please. The least of our problems was hassling with insurance companies.

Been with them for 37 years now. About every 2-3 years I'll get rate quotes but only once were the quotes from another company sufficiently lower (considering the potential, but not guaranteed rebates in the SSA) than USAA that I switched for a few years (ALFA homeowners insurance when I lived in Alabama, but USAA was still better for autos). ALFA claim service was good, policy service was terrible in my experience.

RE2Boys

 

[friar1610]

You say you've been with USAA all your adult life. Not sure how long that might have been, but once you've been with them for 40 years they start paying the money in your Subscribers Savings Account back to you - 10% of the account balance per year.

I should hit 40 years with them later this year - I went on active duty in 1967 but didn't have a car during my first assignment in the Philippines, so I started with them when I returned to the States in late 1968. Thanks for the information about the "plus up" to 10%

 

[mathjak107]

30 years with geico, always good experiences with them

 

[2soon2tell]

REW,

Thanks for the reminder about USAA. I'm coming up on 39 yrs. of membership.

2soon2tell

 

[lightspeed]

I've been with USAA since I got out of college in 1991, and have had only flawless service with them. Over the years, everything I have has migrated to USAA, to the point where I don't even shop around for anything anymore. Good service breeds brand loyalty! Even if USAA was not the cheapest, I'm at a point where I feel like I owe them!

 

[mathjak107]

its not about just rates, its about what happens when you get a ticket, what happens when you have an accident for the first time in decades, its about the fine print thats in a policy that stings you.

my sister got stung and fooled by the low rates at progressive.

i got burned by allstate before i had geico. so far had few claims thru the years with geico and no issues or extra charges.

 

[mathjak107]

im always reminded by the fine print that can exist in a policy

did you know under alot of policies husband and wife can't drive each others cars unless they are insured by the same policy. other people can drive your car but a husband and wife are considered 1 entity and an owner even if the car is not in each others name under alot of fine print and since all owners must be insured under the same policy you can be deemed uninsured. if you and your wife have different policies and companies

we lucked out with geico in new jersey as my son had just gotten back from their honeymoon and over the weekend they returned he had a fender bender driving his new wifes car. since they had just gotten married and hadnt switched to 1 policy yet where both had the same company and policy,we were nervous they wouldnt cover it. geico said in new jersey they didnt have that clause so they were okay but not all policies in your state read the same from other companies

 

[tiredofwork]

Been with USAA since 1977. Have had several auto and homeowners claims with them and they were handled fairly and quickly. On auto and homeowners insurance, I would rather "fight than switch".

I also had life insurance with USAA for many years, but found Ameritas Direct more competitive and did switch the life policy.

I also like the yearly subscribers savings account check and look forward to the 10% bonus from that in ten years.

 

[mathjak107]

heres an example of a little zinger that may be in your policy that can cause a big surprise if you and your wife have different auto insurers and drive each others cars at times as you find out your spouse is an uninsured driver if driving your car.... note the definition of "you"

LOSSES WE WILL PAY FOR YOU UNDER SECTION I

Under Section I, we will pay damages which an insuredbecomes legally obligated to pay because of:

1. bodily injury, sustained by a person, and;

1. damage to or destruction of property, arising out of the ownership, maintenance or use of the owned auto or a non-owned auto. We will defend any suit for damages payable under the terms of this policy. We may investigate and settle any claim or suit."

Preceding the recitation of covered losses, the policy states that the words which are italicized in Section I are defined as set forth in the definitions section which follows. The definition of "insured" sends the reader to the "PERSONS INSURED" section, which includes "you" as an "insured" for both owned and non-owned autos. The other pertinent definitions are:
"5. 'Non-owned auto' means an automobile or trailer not owned by or furnished for the regular use of either you or a relative, other than a temporary substitute auto.
"6. 'Owned auto' means:
(a) a vehicle described in this policy for which a premium charge is shown for these coverages;

1. 1. 1. a trailer owned by you;
      2. a private passenger, farm or utility auto, ownership of which you acquire during the policy period or for which you enter into a lease during the policy period for six months or more, if

(i) it replaces an owned auto as defined in (a) above; or
(ii) we insure all private passenger, farm and utility autos owned or leased by you on the date of the acquisition, and you ask us to add it to the policy no more than 30 days later;
(d) a temporary substitute auto.
. . . .
"8. 'Relative' means a person related to youwho resides in your household.
"9. 'Temporary substitute auto' means an automobile or trailer, not owned by you, temporarily used with the permission of the owner. This vehicle must be used as a substitute for the owned auto or trailer when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction.
. . . . "14. 'You' means the policyholder named in the declarations and his or her spouse if a resident of the same household."

 

[tibbar]

USAA for us. My husband had brake failure and rear ended a car that in turn hit the car in front of her. USAA paid everything including settling medical claims for one of the drivers and never raised our rates, in fact they went down a bit at next renewal. Then our older model car was stolen, USAA paid based on the new sound system and brake work done in the week before. We got WAY over book value.

I love USAA!

 

[mickeyd]

I have had my P&C with USAA for over 40 years so I get the annual SSA refund which reduces my premium. I have no complaints about their products or service.

Bob Davis recently stepped down as CEO and he really shook the place up I understand. He was from a banking background and insisted on a marketing oriented outlook. Many employees were unhappy, but the company did well under him. Gen. Robles is the new boss I believe. I wonder what changes he will make?

I used to have many of my investments at their MF company (IMCO) but I have since moved them all to Vanguard because their ER, though low, will never get close to VG except for the S&P 500 which has a subsidized ER of about .19%, even though the real ER is about .32% or so. (Loss leader I guess.)