More BS from USAA
Attention USAA Homeowners Insurance Policy Holders,
As they say, Buyer Beware. USAA is NOT your Dad's USAA that you might remember. Here's my story:
So, I own a few single family rental properties and was shopping USAA rates and was about ready to purchase the policies online but thought that I better speak to a real person and ask a few questions. Glad I did!!
Online, when you input your home information USAA comes up with their estimated replacement cost. (Which for the area my homes are in I felt was high). USAA then gives you a screen where you can make adjustments to the coverages, deductibles, etc. One of the options is to adjust the amount that the property is insured for. USAA gives you a range you can choose from. For one of my properties the USAA recommended amount was 223K but they then gave you the option to adjust it anywhere between 179K and 335K.
OK -- so, I choose 185K for this property which I feel is appropriate coverage for this property. However, in talking with the agent and asking good questions she informs me that since I have chosen a coverage less than recommended that any claim I file will be prorated by the amount of "deviation" from the recommended amount.
So, I said OK lets go over a scenario. Wind storm -- tree falls into the house and does 100K of damage. Since I am insured against such a loss and my coverage is for 185K you think I would get 100K minus my 1K deductible. I'm only out 1K, right?? WRONG!!!!
Since I chose a coverage amount less than their recommended amount of 223K, they will only pay the following amount:
Actual coverage divided by recommended coverage x amount of loss minus deductible.
So: 185K / 223K = .8296
They will then pay: .8296 x 100K (amount of loss) - 1K (deductible)
They pay: 81,960 leaving me with 18,040 out of pocket vs what should be only 1K.
Even though I'm paying premiums on 185K coverage they are only going to reimburse up to 82.96% of any loss minus your deductible.
Seems like complete BS to me since I'm insured for 185K and paying premiums for that level of coverage.
Furthermore, no where in the online sign-up does it tell you that little gem of information. This was for a rental home I own so I don't know if this applies to your primary residence or not. Anyhow, for those with rental properties insured with USAA I recommend you check the details of your policy and see if you have the recommended coverage or if you chose something less. If so, beware of this little trap in the fine print. BUYER BEWARE. Best wishes to all.
Thunder1