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In Most Fields No Peer Exists

Jun 9, 2003
Review by  
Rated a Very Helpful Review

Pros:Low cost, exceptional service, and financially strong.

Cons:You need some military connection for the insurance.

The Bottom Line: USAA is truly tops in financial services, an organization with no peer in many fields.

Why I Write This

This is the 100th review I have posted on That makes it a bit special, at least to me. I wanted to write about something special, a topic I could recommend without reservation. Normally, I avoid posting just another review when many have already covered the subject, but I choose to depart from that habit this time. My enthusiasm for USAA compels me to review that organization for my 100th.


USAA is short for United Services Automobile Association, a large insurance and financial management organization serving present and past military personnel and their families. As the name suggests, it was started to provide car insurance. In the old days, USAA was just for officers of the military services, but that has changed. Now, all active duty, National Guard, or reserve enlisted personnel, officers, and officer candidates are eligible. Once in, the member may remain even after leaving the military service. Also, spouses and children of members may participate fully. If they do, their children may as well. It is a mutual company, owned by the members.

The scope of services today includes property and casualty insurance, life insurance, banking, investment management and brokerage, financial planning, a retirement community, and discounts offered through alliances with selected companies.

Actually, it is only the insurance products and the discounts that require membership qualification. Anyone may use the bank, buy mutual funds, and use the brokerage.

My experience

In 1958 I set off for Fort Sill, Oklahoma, as a new ROTC graduate. My dad had given me his old car and had arranged with his insurance agent for my coverage through Nationwide. The drive from Pennsylvania to Oklahoma was without incident, and I settled in as a student lieutenant. My first mail was a cancellation notice from Nationwide, stating the reason that I was now in the military. Not knowing anything about how to proceed, I picked up a brochure about USAA from a table near the entrance to my BOQ. I saw that car insurance was available, and I applied. I have been with USAA ever since; now 45 years and counting.

For most of that time, the insurance I have carried through the Association includes automobile, homeowners, personal articles, and umbrella liability. When the need was present, I also had a term life policy. During the past two years, my wife and I have added a Medicare supplement through USAA. In all these insurance fields, no organization comes close to USAA in financial strength, service, and costs.

I have also invested in mutual funds offered through USAA Investment Management Company and have used the brokerage. In my retirement years, I have decided to consolidate all such investments with Vanguard, which has a slight edge in breadth of mutual fund offerings. Also, for a time, the USAA money market fund I was using was paying significantly lower interest than Vanguard, but that has been corrected. In my book, USAA is second only to Vanguard in the investment field.

At one time, I carried several credit cards, but I have recently made the one from USAA Federal Savings Bank the only one I use. The service is excellent, the annual fee is very modest, it gives me a 1% rebate on my charges, and I avoid all those constant marketing pitches one typically gets from others.

I also take advantage of several of the discount arrangements including long distance from Sprint, Internet access from Earthlink, and car rentals from Hertz.

The best way to convey the essence of USAA is to tell my favorite story. It was in the early 1970’s when things were handled by mail, not by telephone and the Internet. It was also a time when wild animal parks were the new rage. My wife and I were vacationing in Ontario, and we stopped at one of those parks. When we stopped to pay, the clerk pointed to the top of my car and said that since I had a vinyl top, she suggested we rent one of their safari vans for the trip. Thinking that was an obvious marketing ploy, I declined. We proceeded through the hoofed animals, the big cats, and others. Finally, we came to the baboon enclosure, and we drove in with anticipation of more good pictures. The creatures were fun to watch, and several cars had stopped ahead of us. We stopped, and others came up to block us in. Suddenly, several baboons jumped on our car, and I started to hear: ripppppp, rippppp. People in the other cars were laughing and pointing at us. By the time we drove out, that vinyl top was in shreds, flapping in the breeze. I found out later that the baboons had learned to enjoy the salty taste of the cement used to adhere the vinyl to car steel. In any event, I stopped at a hardware store, got duct tape to plaster down what was left of the vinyl. Upon returning home, I wrote to USAA: “While driving through Ontario, our car was attacked by a tribe of baboons, and they ate the vinyl top.” USAA wrote back: “Get two estimates.” I did, and they paid with no questions asked.

Over the years, I have not had many auto or homeowners claims, but all were promptly and courteously handled to my complete satisfaction. Of course, having the Medicare supplement means very frequent health service claims. Having USAA has meant the smoothest claims and bill processing we have ever experienced.

Other Services

No one person could possibly take advantage of all USAA has to offer. Among those I have not used are: loans, assistance selecting a car, help with buying and selling homes, mortgage loans, checking and savings accounts, and financial planning. Among the alliance discounts and arrangements I have not as yet used are home security, appliance insurance, travel services, express deliveries, and the retirement housing (in San Antonio).

Office Locations, Agents, and Communication

The home office is at 9800 Fredericksburg Road, San Antonio, Texas. There are branch offices at Phoenix, Arizona; Norfolk, Virginia; Colorado Springs, Colorado; Tampa, Florida; and Sacramento, California. Overseas offices are at London, England; and Frankfurt, Germany. Actually, those locations mean little to the members, for there is no need to go there.

USAA does not use insurance agents, a key fact in keeping costs low and quality uniformly high. Business today is by phone or through the Internet. Even today, people who know their job, keep your interests first, and have authority to make commitments promptly answer calls. In all my years of experience with USAA, I have never encountered someone there who was unfriendly, disinterested, or incompetent. Perhaps that is why we find those qualities so frequently elsewhere: USAA has hired the good people!

The web site is at: “,” which requires membership registration for access. There, members can get information, manage their accounts, buy new products and services, and learn more about financial matters. The site is easy to use.

Others may use the following phone numbers for information:

Property & Casualty Insurance: (800) 531-8080

Banking: (800) 531-2265

Mutual Funds: (800) 531-8448

Brokerage: (800) 531-8144

Life Insurance: (800) 531-8000

Financial Strength

The above reference to financial strength is not my assessment. USAA is ranked at the top by all the major rating services. A. M. Best Company rates USAA “Superior (A++)” in both insurance categories. Standard & Poor’s does the same with their “Extremely Strong (AAA). Moody’s gives USAA “Exceptional (Aaa)” for property and casualty and “Excellent (Aa1)” for life insurance.

In the banking field, the leading ratings are from Sheshunoff Information Services, Inc.. That firm places USAA Federal Savings Bank in the top 10% of its peer group. At the same time, IDC Financial Publishing, Inc. has given the bank “Superior” for 72 consecutive quarters.

My Recommendation

If you are eligible, get connected with USAA now! I am confident you will never regret it, and the connection will save you a great deal of money over the years. If you don’t have a direct or family military connection, consider getting one. Nobody ever joins the military or marries a service member knowing about USAA, but it turns out to be one of the best benefits, although not directly through the government.

Recommend this product? Yes

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