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

So I guess the important question is:

if you get the $335k option, do you get $150k-$1k if a tree falls on your house and causes $100k worth of damage?

Excellent question! I'll ask. Kind of one sided if they only prorate your claim based on the amount below their recommendation not on the amount above their recommendation. Although arguing logic with big business, corporate america doesn't get one very far.

More BS from USAA
 

I used them for home insurance for years but their rates in this area became so expensive we had to switch to another company. Their rates were double what other reputable companies were charging.

After many years, I dumped them for insurance. I didn't think that they would pay me if I ever had a claim. You are only as good as your reputation and stories like this don't reflect well upon their reputation.

The fact that you are insuring rental property can be problematic with USAA, too. Go find someone else to write your property and auto insurance.

Should you ever have a claim with USAA, your first phone call should be to a public adjustor for an unbiased evaluation of your claim. Isn't a shame that this is the situation.

I still use some of their banking services.

USAA was still the cheapest by far in my area. I had my first homeowners claim this past summer for a lightning strike that destroyed my A/C and some other electrical problems. They paid with no hassle. Their mortgage rates have not been competitive for years, but I have had no problems with their insurance. I've NEVER had a problem filing a claim (home or auto) in the 15 years I have been a member.

I'm in the process of buying a home and the combined auto and home rates at USAA are the lowest I've found. I have had one previous renters insurance claim and they were super easy to deal with. I am, however, going through a different company for my mortgage. As someone else stated, their rates just can't compete