USAA Changes Policy After ABC News Investigation Into Sandy-Damaged Vehicles Sold on Used Car Lots

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14. Till 1996, it restricted its coverage to Military Officers

Last edited Thu Sep 5, 2013, 11:15 AM - Edit history (3)

In 1996, USAA extended its coverage to enlisted personal (Due to the cut back in the Military at the end of the Cold war, the number of Officers dropped severely, thus USAA had to expand its base, i.e .include enlisted personnel, OR become a much smaller company. Thus to at least stay the same size, it expanded its coverage to enlisted personnel).

Sorry, I had to deal with them in the 1980s, and they attitude at that time, reflected that Officers attitude that they are better then the enlisted ranks.

Another problem is that it is NOT a Stock Insurance Company but a non-accessible Mutual insurance company. In an accessible insurance company, all insured insure each other and the annual premium is based on the claims made by members of the group to the insurance company. If the claims are more the the premium paid each year, the mutual insurance company can go back to all of its members and force them to pay again due to the excess payouts. This is rarely done, but being able to do so permits them to charge smaller premiums then in a Stock company and in most years that is enough.

In a non-accessible mutual insurance company (such as USAA) the insured are still insuring each other, but can not be hit for any excess payments made in any year.

This difference, put pressure on non-accessible mutual insurance company to keep claims down so their premiums can be competitive with accessible mutual insurance company. This is the main reason people have a problem dealing with USAA and other non-accessible mutual insurance companies. Stock insurance companies are the easiest Insurance companies to deal with when it comes to a claim against someone insured by them (They pay out quicker and come to an agreement quicker) The worse are these non-accessible mutual insurance companies (The accessible mutual insurance company are in between). I have talked to attorneys that they hate dealing with mutual insurance companies, for at time even if you the insured you have to sue the insurance company to pay for covered damages. This is less likely if they are dealing with a Stock Insurance Company.

Just a comment on USAA and similar non-accessible and accessible mutual insurance companies.

Some more on USAA:
http://en.wikipedia.org/wiki/USAA