USAA doesn't operate its own mortgages anymore. They sell them day one which usually results in another sale or company acquisition within a year. The cure? Take your business elsewhere. FCUs don't have this same reputation and generally open with less predatory rates.
USAA had a great run of building trust and is speedrunning torching it.
> Last year, former USAA CEO Wayne Peacock received $14.1 million in total compensation from five USAA insurance companies for working slightly more than a quarter of 2025 before his retirement. That was a 47% increase from the $9.6 million he received in salaries and bonuses in 2024. Other executives at USAA also received pay boosts in 2025.
At about 1M policy holders that’s about $14 per policy. Not bad for a couple months work.
they've slowly gone from being one of the most progressive and customer focused financial institutions (they invented at home electronic deposit of checks) to a gross regular bank / insurance company.
In a statement, USAA said the association’s data is misleading because it lacks context about why a claim may be closed without payment. Those factors could include claims that were later reopened, claims covered under separate policies or multiple claims from a single event that are consolidated into one case.
“When all factors are included, less than 6% of USAA homeowner claims were denied without payment,” USAA said. “Most claims closed without payment involve losses below a member’s deductible or claims the homeowner chooses not to pursue.”
I thought I was a typical guy who bought insurance and hardly ever claimed. I was genuinely shocked after talking to people who regularly tried to claim all the time. "Nothing to lose right?".
After realizing I've really stopped buying insurance except a core of home, car and liability with high deductables. If you're a responsible person who is careful insurance really isn't worth the cost.
At this point, I buy all insurance (home, auto, health etc.) with highest deductible and lowest premium knowing that there is a high probability that insurance will not pay (or pay only partially). I mainly buy insurance to avoid catastrophic losses and hope that, if such an event were to happen, they would cover the loss at least partially. For smaller losses I am willing to absorb the loss and save money on premium every year. The money saved on premium can be used (to some extent) to cover the loss of the denied claim. Also, in the event of a loss, having high deductible discourages me from filing claim which keeps premium low for subsequent years.
I live around at around a 150ft elevation above the ocean, but technically within < 1 mile away from it. Despite zero risk of flodding, half of the bigger insurers in my area have exited the market, and we are now having to insure with higher risk insurers like Kingston, who's ratings are yet to be tested during a real emergency.
My car insurance is above $4k/yr for two family cars, rising annually despite no accidents.
Meanwhile, "normal" countries are solving these problems in reasonable ways. Back home in Central Europe, you get state mandated car insurance at pre-negotiated rates that are based on the car, not the driver.
Dropping all forms of insurance was the #1 motivation for me to pay off my mortgage. My rate was under 3%, but insurance is absolutely brutal once you factor in the bureaucratic hell that must be navigated to get any kind of payout. The premiums are off the charts too. $10k+/yr for a ~$350k cardboard box in Texas is absolutely insane.
The biggest scam I've seen in real estate is mandatory windstorm insurance (TWIA & friends). I've been through multiple hurricanes where claims were involved and it would have been significantly better if the premiums were simply left in a savings account to compound over time.
Any kind of disaster that would require complete reconstruction of your home would likely violate whatever "act of god" clause happens to exist in literally every policy. Not having insurance is not equivalent to being at risk for the total property value (in any practical sense). $10k goes a long way when you are repairing wood and plastic that is mostly still standing. If you are fortunate enough to have a few years between catastrophes (as typically you do), then it's generally never a problem.
A simple rule for today's economy: If you cannot afford the property on cash basis, you should probably try to find a cheaper property. The risk of mandatory insurance premiums creeping up into the danger zone is too high. Even if it starts out OK, you may find that your escrow account requirements start to outpace your principal and interest obligations over the years.
A touch of nuance from someone in the industry (CTO at a startup that sells home and umbrella insurance):
Most of the issues here stem from problem the sales as opposed to the claims process. Customers are, structurally, under-educated on what their policies actually cover and this produces unrealistic expectations about what they should file claims for.
Emphatically, this is not their fault but an industry-wide issue that has complex causes like brokers/salespeople getting increasingly squeezed to produce as well as the intense time pressure under which many folks purchase their homeowners insurance policy (folks are often sprinting to check this box to secure a mortgage). Sadly, there is also a strong correlation between consumers experiencing worse socioeconomic conditions and failed claims. This, to me, generally suggests that some behavioral insights should be brought into the sale and management of the financial product to better protect these buyers' interests.
It is important to highlight and understand this point of failure because: 1) claims (even failed ones) are one of the easiest ways to get your rates jacked up as this is a category that insurers are allowed to price on. 2) The common response to articles like this is that "of course insurance should cover more things" but this counterintuitively risks creating more dead-weight loss for consumers broadly in the form of coverage for things that we simply shouldn't be insuring (and instead should be maintaining and replacing).
All that is to say: ask your broker / agent what's in your contract. Do it BEFORE you have a claim to file as in some cases speaking to them (especially captive agents) may in and of itself trigger a claim.
AI-native brokerages (like what we've built) are part of the solution to this problem since well-constrained LLMs can help buyers and users get a much better sense of what their contracts actually cover, and whether or not they should submit a claim.
This is interesting because it doesn't fit with my own experiences dealing with USAA home or auto insurance claims. During 2025 we had contacted them twice to file claims and in both cases the claims were paid according to the existing policy coverage level with zero hassle. Our initial contacts were by telephone and almost all of the paperwork was managed thru their online portal with follow-up phone calls to insure that everything was in order. Their claims reps arrived as scheduled, evaluated covered damages, and submitted documentation to support our claims.
In one case dealing with our house, I discovered a calculation error in my favor and submitted the corrected documentation to them. After examining that data they agreed and modified the claim to correct that error.
With the exception of the adjuster visits, all contacts with USAA were managed over the telephone or thru texts and emails. They are efficient and easy to reach.
I can see where USAA's statements that the numbers are off. From the article:
>In a statement, USAA said the association’s data is misleading because it lacks context about why a claim may be closed without payment. Those factors could include claims that were later reopened, claims covered under separate policies or multiple claims from a single event that are consolidated into one case.
Note that there are four different USAA insurance companies. Your military rank and how you got referred for membership will determine which one you join (listed highest/best to lowest):
United Services Automobile Association - Officers and senior NCOs
USAA Casualty Insurance Company - Enlisted (E-1 to E-7) and children of the above
USAA General Indemnity Company - National Guard, Reserve
Garrison Property and Casualty - Extended family of the above
I can't get past the article's paywall to view the 51% rate, but I expect your claim process experience will vary based on which company is insuring you.
I have noticed that the quality of service has declined over the past 5 years or so (which lines up with Peacock's being CEO). It sometimes takes 2 or 3 calls to answer a question with my policies these days, as they now have high turnover in the call center.
I hate dealing with USAA, and probably should have had a life insurance policy before I even tried. Their phone trees are designed to misdirect you, the agents do not help at all (let me transfer you...[half hour hold time]...Sorry wrong department, let me transfer you), you can't get any real information from anyone. I had to start taking down phone session ID's from the reps and asking for customer advocates to get anywhere at all. Terrible experience.
I still have their awful jingle stuck in my head played over hours of holding on the phone, I'll probably turn into a Manchurian candidate if I ever hear it again.
My experience with USAA is still that it's better than all of the other insurers, but I haven't had to make any homeowners claims. They have done very well every time my family had to make an auto claim - still only a couple of times, but it was very clean and no-BS.
USAA used to be great, but now it a scam basically. I used them for a decade and noticed how much worse it was getting, and left. Now I am with Country Financial... Somewhat better.
Just to add an anecdote to this, USAA customer for 20+ years. I had two claims in 2025 against a rental property policy for a condo in Chicago I lived in for ~10 years and rented out for about a year and a half before selling a couple months ago.
First claim was for a leak caused by a broken pipe due to the building settling. The adjuster went missing for months, took 6+ months to get payment and resolution after emailing and calling almost every day. I think the final total was ~15k which was covered between the HOA's insurance and my insurance. I was also out of pocket for several thousand just trying to diagnose the issue since it wasn't initially clear what was causing the issue, ended up having to cut into the walls just to find the issue which they of course did not entirely cover.
Second claim was for sewer backup that flooded the unit causing 50k+ worth of damage. They initially outright denied the claim, which I had to push back on by escalating up to a senior adjuster. Again, took them MONTHS to payout, causing huge delays in the repairs, which caused the tenant to sue me for breach of the lease contract. Tried to help the tenant use their renter's insurance to get alternate lodging while the repairs were going on but they refused for some reason. I had to threaten to sue USAA and to pull my policies for them to get any movement on my claim. They ended up covering up to approximately the policy maximum (25k) and made up about 15k of the rest from loss-of-use but I had to absolutely bully the manager I finally was able to get into contact with. Out of pocket like 10-15k after settling with the tenant.
Obviously I'm biased but even a cursory reading of the policy made it obvious to me both issues were very squarely covered and it was absolutely like pulling teeth to get them to do anything. Unfortunately I don't know if any other company would've been better.
21 comments
[ 4.7 ms ] story [ 77.1 ms ] threadUSAA had a great run of building trust and is speedrunning torching it.
At about 1M policy holders that’s about $14 per policy. Not bad for a couple months work.
“When all factors are included, less than 6% of USAA homeowner claims were denied without payment,” USAA said. “Most claims closed without payment involve losses below a member’s deductible or claims the homeowner chooses not to pursue.”
After realizing I've really stopped buying insurance except a core of home, car and liability with high deductables. If you're a responsible person who is careful insurance really isn't worth the cost.
My car insurance is above $4k/yr for two family cars, rising annually despite no accidents.
Meanwhile, "normal" countries are solving these problems in reasonable ways. Back home in Central Europe, you get state mandated car insurance at pre-negotiated rates that are based on the car, not the driver.
US insurance is a scam.
The biggest scam I've seen in real estate is mandatory windstorm insurance (TWIA & friends). I've been through multiple hurricanes where claims were involved and it would have been significantly better if the premiums were simply left in a savings account to compound over time.
Any kind of disaster that would require complete reconstruction of your home would likely violate whatever "act of god" clause happens to exist in literally every policy. Not having insurance is not equivalent to being at risk for the total property value (in any practical sense). $10k goes a long way when you are repairing wood and plastic that is mostly still standing. If you are fortunate enough to have a few years between catastrophes (as typically you do), then it's generally never a problem.
A simple rule for today's economy: If you cannot afford the property on cash basis, you should probably try to find a cheaper property. The risk of mandatory insurance premiums creeping up into the danger zone is too high. Even if it starts out OK, you may find that your escrow account requirements start to outpace your principal and interest obligations over the years.
Most of the issues here stem from problem the sales as opposed to the claims process. Customers are, structurally, under-educated on what their policies actually cover and this produces unrealistic expectations about what they should file claims for.
Emphatically, this is not their fault but an industry-wide issue that has complex causes like brokers/salespeople getting increasingly squeezed to produce as well as the intense time pressure under which many folks purchase their homeowners insurance policy (folks are often sprinting to check this box to secure a mortgage). Sadly, there is also a strong correlation between consumers experiencing worse socioeconomic conditions and failed claims. This, to me, generally suggests that some behavioral insights should be brought into the sale and management of the financial product to better protect these buyers' interests.
It is important to highlight and understand this point of failure because: 1) claims (even failed ones) are one of the easiest ways to get your rates jacked up as this is a category that insurers are allowed to price on. 2) The common response to articles like this is that "of course insurance should cover more things" but this counterintuitively risks creating more dead-weight loss for consumers broadly in the form of coverage for things that we simply shouldn't be insuring (and instead should be maintaining and replacing).
All that is to say: ask your broker / agent what's in your contract. Do it BEFORE you have a claim to file as in some cases speaking to them (especially captive agents) may in and of itself trigger a claim.
AI-native brokerages (like what we've built) are part of the solution to this problem since well-constrained LLMs can help buyers and users get a much better sense of what their contracts actually cover, and whether or not they should submit a claim.
In one case dealing with our house, I discovered a calculation error in my favor and submitted the corrected documentation to them. After examining that data they agreed and modified the claim to correct that error.
With the exception of the adjuster visits, all contacts with USAA were managed over the telephone or thru texts and emails. They are efficient and easy to reach.
I can see where USAA's statements that the numbers are off. From the article:
>In a statement, USAA said the association’s data is misleading because it lacks context about why a claim may be closed without payment. Those factors could include claims that were later reopened, claims covered under separate policies or multiple claims from a single event that are consolidated into one case.
United Services Automobile Association - Officers and senior NCOs
USAA Casualty Insurance Company - Enlisted (E-1 to E-7) and children of the above
USAA General Indemnity Company - National Guard, Reserve
Garrison Property and Casualty - Extended family of the above
I can't get past the article's paywall to view the 51% rate, but I expect your claim process experience will vary based on which company is insuring you.
I have noticed that the quality of service has declined over the past 5 years or so (which lines up with Peacock's being CEO). It sometimes takes 2 or 3 calls to answer a question with my policies these days, as they now have high turnover in the call center.
I still have their awful jingle stuck in my head played over hours of holding on the phone, I'll probably turn into a Manchurian candidate if I ever hear it again.
Car insurance premiums grew 3.8% to 5.4% annually over 30 years, compared to 2.4% average inflation rate. Why?
Complex technology and labor required to fix cars.
Costly claims for rising medical bills, increased litigation, severe climate weather damage, and distracted driving accidents from smartphones
The last 3 years, profit is way up from excess cash after post-pandemic rate increases. Before that, profit wasn't great.
First claim was for a leak caused by a broken pipe due to the building settling. The adjuster went missing for months, took 6+ months to get payment and resolution after emailing and calling almost every day. I think the final total was ~15k which was covered between the HOA's insurance and my insurance. I was also out of pocket for several thousand just trying to diagnose the issue since it wasn't initially clear what was causing the issue, ended up having to cut into the walls just to find the issue which they of course did not entirely cover.
Second claim was for sewer backup that flooded the unit causing 50k+ worth of damage. They initially outright denied the claim, which I had to push back on by escalating up to a senior adjuster. Again, took them MONTHS to payout, causing huge delays in the repairs, which caused the tenant to sue me for breach of the lease contract. Tried to help the tenant use their renter's insurance to get alternate lodging while the repairs were going on but they refused for some reason. I had to threaten to sue USAA and to pull my policies for them to get any movement on my claim. They ended up covering up to approximately the policy maximum (25k) and made up about 15k of the rest from loss-of-use but I had to absolutely bully the manager I finally was able to get into contact with. Out of pocket like 10-15k after settling with the tenant.
Obviously I'm biased but even a cursory reading of the policy made it obvious to me both issues were very squarely covered and it was absolutely like pulling teeth to get them to do anything. Unfortunately I don't know if any other company would've been better.