USAA is so cheap because the company is the largest insurer of the military community, and that volume allows USAA to offer more competitive rates. USAA has more than 6% of the total private-passenger insurance market, despite only offering coverage to service members. A minimum coverage policy from USAA costs an average of $67 per month, and USAA premiums can be made even cheaper by taking advantage of discounts such as paid-in-full discount and annual mileage discount. Plus, USAA rewards customer loyalty with discounts for insuring more than one car and bundling multiple policies, such as home and auto.
Average Monthly Rates for USAA vs. Top Competitors
Company | Minimum Coverage | Full Coverage |
USAA | $67 per month | $234 per month |
State Farm | $86 per month | $293 per month |
Progressive | $86 per month | $337 per month |
Note: Premiums are representative of a 45-year-old good driver in CA; individual premiums will vary.
USAA is especially cheap for young drivers in particular. That's because USAA has special savings opportunities for drivers in this category, such as discounts for students who maintain at least a B average.
Your final premium is based on a variety of factors, though, such as your driving record, insurance history, and more. Every insurance company determines their rates differently, so even though USAA is among the cheapest car insurance companies, the only way to confirm you've found the lowest price is to compare quotes from multiple companies.
To learn more, check out WalletHub's review of USAAand seeUSAA's full profile.
This answer was first published on 06/13/23 and it was last updated on 01/26/24. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
FAQs
USAA is so cheap because the company is the largest insurer of the military community, and that volume allows USAA to offer more competitive rates. USAA has more than 6% of the total private-passenger insurance market, despite only offering coverage to service members.
Are USAA rates really lower? ›
USAA car insurance costs $1,432 per year on average for full coverage insurance. That is more than $500 a year less than the average national annual rate of $1,982. Compared to other large insurers, USAA's average annual full coverage rates are cheaper than other companies.
What are the disadvantages of USAA? ›
Disadvantages of USAA home insurance include limited extra coverage options and availability since the company only writes policies for homeowners with military affiliations.
Why does USAA have an F rating? ›
A check of the BBB website provides a few answers. The failing grade is due to two stated reasons. The first is that the company agreed this year to a $15 million settlement with the U.S. Consumer Financial Protection Bureau over how USAA's banking arm mishandled thousands of personal checking accounts.
Is USAA hard to deal with? ›
Yes, USAA can be hard to deal with. Although USAA has a good customer satisfaction rating from J.D. Power, USAA also receives a high volume of customer complaints, per the National Association of Insurance Commissioners.
What is the #1 insurance in America? ›
State Farm is the most popular insurance company nationwide, and it also is the most popular company in 19 states.
Who is cheaper than USAA? ›
Progressive has cheaper rates than USAA on average, coming in at around $113 per month to USAA's average of $127 per month.
What went wrong with USAA? ›
USAA CEO Wayne Peaco*ck said the company dealt with record inflation and supply chain problems in 2022. SAN ANTONIO – For the first time in over 100 years of operation, financial services giant USAA posted losses on its annual balance sheet.
Why is USAA so cheap? ›
USAA is so cheap because the company is the largest insurer of the military community, and that volume allows USAA to offer more competitive rates. USAA has more than 6% of the total private-passenger insurance market, despite only offering coverage to service members.
What's better, Navy Federal or USAA? ›
Which Bank Is Better: USAA or Navy Federal? While both institutions have your banking and credit needs covered, USAA and its partners offer more when it comes to insurance, retirement and investing services. Navy Federal Credit Union, however, offers business banking while USAA does not.
Let's start with the bad news. For 2022, USAA reported a net loss of $1.3 billion, its first loss for a full year since 1923 — 100 years ago. Also, USAA said its net worth — basically, the difference between what it owns and what it owes — declined dramatically from $40.1 billion in 2021 to $27.4 billion in 2022.
Is USAA financially stable? ›
Federal regulations require USAA Federal Savings Bank (FSB) to make information about our financial strength and risk management practices publicly available. We're committed to practicing prudent financial and risk management. As a result, we're a safe and stable institution.
Why are USAA rates so high? ›
In conclusion, the cost of USAA homeowners insurance reflects their dedication to providing comprehensive coverage, excellent customer service, and location-specific protections.
Is USAA auto insurance overpriced? ›
But at $487 per year, the average USAA car insurance policy is actually cheaper than coverage from most competitors. In fact, USAA is one of the cheapest car insurance companies nationally. Even though USAA offers cheaper-than-average rates, its premiums can get expensive for drivers with certain characteristics.
What makes USAA so great? ›
Similarly, they've built a remarkably strong brand reputation, built on excellent customer service and a clear commitment to helping members reach their financial goals. They offer 24/7 customer service and thoroughly train their representatives so anyone answering these inquiries is both knowledgeable and helpful.
Is USAA cheaper for veterans? ›
USAA has the cheapest car insurance for veterans and their families on average, according to NerdWallet's January 2024 minimum rates analysis.
How is USAA so cheap? ›
USAA is so cheap because the company is the largest insurer of the military community, and that volume allows USAA to offer more competitive rates. USAA has more than 6% of the total private-passenger insurance market, despite only offering coverage to service members.
Is USAA insurance cheaper for military? ›
USAA: Cheapest car insurance for veterans and military
If you aren't driving your car and store it in a secure location, you'll receive up to a 60% discount on auto insurance. This benefit can help military members on deployment, but it's not available in Hawaii, North Carolina or Virginia.
Does USAA raise rates for not at fault? ›
Will accidents that aren't my fault affect my rates? Not usually. Accidents that aren't your fault don't affect rates the same way as those that are your fault. Whether you're at fault or not, a claim can cause your rates to go up.
