USAA: The Top Niche-Market Insurer in the US
The United Services Automobile Association, or USAA, began in 1922, started up by 25 officers in the US Army who were unable to find an insurance company to cover them because they were considered a high risk group. So, they banded together to insure each other’s automobiles. The company was founded in San Antonio, Texas, where it is still headquartered. It is currently one of the top ten automobile insurers in the United States in spite of its limits on customer eligibility.
The company's niche market is the United States armed forces and their families. It is very successful in this niche. In fact, over 90% of US military active-duty officers are USAA members, as well as over 40% of enlisted personnel. Not everyone is able to buy products and become a member. The following individuals meet eligibility requirements: active military, military veterans, spouses of members (including former spouses), widows or widowers of members, the children of current and former members.
Once a person is eligible to become a member of the organization, they are eligible to stay a member for life (unless dishonorably discharged from the military. Individuals who contact the company for insurance, but are not eligible to become members, are usually referred to Progressive Insurance.
USAA sells a full range of insurance and financial products, and is also involved in real estate and banking. The organization even provides price-negotiating assistance for new vehicles. Our website focuses on automobile insurance, so we will limit further discussion to that topic. This organization sells automobile insurance in all 50 states. It also sells policies in Europe. Because the company has limited eligibility requirements, it can minimize risks and is usually able to offer lower insurance premiums to decent drivers.
Insurance policies must be purchased over the internet or by telephone. This company does not employ sales agents, another factor that allows lower insurance premiums.
A quick internet search of any insurance company will reveal websites dedicated solely to complaints, as does a search on USAA. However, many of those complaints lack any details to support their bad-name-calling. The company's official website accepts customer reviews, and as of August 2011, 4.7 out of 5 customers indicate that they are very happy with the company.
This company does offer Umbrella policies, which are a type of insurance product that our website contributors strongly encourage individuals with assets to at least review.
USAA was recognized by Fortune Magazine as one of “America’s Most Admired Companies” in 1992. It has won many other awards over the past decade, including but not limited to Fortune 500’s list of best 100 companies to work for, “50 Best Employers of Latinas in the US (2001-2010), and Bloomberg Businessweek’s top “Customer Service Champ” four years in a row (2007-2010).
USAA is not publicly traded, but is still subject to insurance regulation. As of August, 2011, it has an A++ (Superior) rating from the A.M. Best Company, an Aaa (Exceptional) from Moody’s, and an AA+ from Standard and Poor’s. These are all exceptionally high rankings from independent industry auditors and indicate great financial strength and consequently, the ability to pay outstanding claims.
Whether you are an investor, or shopping around for an automobile insurance policy, this seems to be a company to keep your eye on. Assuming that you qualify for USAA membership, before you make a final decision about which company to purchase a policy from, make sure to get a quote from this one also. You could be pleasantly surprised.
If you have even worked for USAA or had a policy with them, our readers would love to hear from you. What did you think about the company? What did you like or dislike about it. How was the customer service. Please share your insights or personal story with the rest of our insurance community. Just fill out the web-form below to get started. Thank you.
This article is written for informational purposes and is not intended to take the place of competent local legal counsel. The writer is not associated with this insurance company or any of its affiliates. This website does not endorse any specific automobile insurance company over another.
Read our other insurance company reviews.
Some additional articles that you may find to be of interest:
An Explanation of the Insurance Company's Claims Handling Process
Why Bother with Buying Automobile Insurance?
GAP Coverage Explained
An Explanation of the Personal Umbrella (or PUP) Policy
Uninsured Motorist and Under-Insured Motorist Coverages Explained
First Party Insurance Coverages vs. Third Party Insurance Coverages
What to do When You Have Been in an Accident
The Black Box Under Your Car Seat
What is an Insurance Lienholder?
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