Pros / USAA provides the highest coverage per dollar of the companies we reviewed.
Cons / This homeowners insurance is limited to military members and their immediate families.
Verdict / USAA provides excellent yet inexpensive insurance with great customer service. If you are a member of the U.S. armed forces or one of your parents was, it's an agency worth checking with.
USAA has an excellent reputation for insurance services for members of the armed services and their families. Its homeowners insurance is among the best, with a higher coverage per dollar value than any of the other agencies we reviewed. It lacks local agents, but its customer service department is accustomed to working with clients across the world and who change locations frequently.
Value (Coverage vs. Premium)
USAA provides the best home insurance coverage of the companies we reviewed. For value, we considered the total coverage offered for home and property replacement and divided it by the annual premium. This way, you can see how much coverage you are paying for. Because USAA only works with members of the armed forces, we used an existing policy of one of our staff members to determine this value, but the policy we used is pretty typical of most homeowners. There are not a lot of discounts for things like extra security, for example, nor are there extra hazards like biting dogs.
We found that USAA provided nearly $200 more in coverage per dollar spent than the next highest company, Travelers. It also has the fewest limits on specific items, such as replacement of electronics. Overall, if you are a member of the military or the spouse or child of a military member, you are very likely to get the best coverage with USAA.
One reason USAA's rates are low is because it does not consider replacement value of your home at or over the market value. All of the other insurance companies we spoke to placed the value at above market. This is important for two reasons:
- Replacement value is not market value. It is the cost to rebuild your home only. Therefore, the land, the foundation, the pipes going into the house and the price of existing homes all go into market value. However, many of these items are still intact when a house is destroyed or are irrelevant to rebuilding. Therefore, the replacement value is often below market value. When insurances cover more than that, it could mean you are paying a higher premium than you need to.
- Even considering that USAA's replacement value was lower, when we looked at the value score – coverage per dollar – this home insurance company still provides the most bang for the buck.
Finally, USAA can replace or repair the damage to your home at standards up to current code, even if the cost of the repair/rebuild is higher than the coverage. All agencies allow for a little extra coverage, usually 20 to 25 percent. USAA, however, is one of two companies that pay whatever it takes to ensure your house is repaired or rebuilt to comparable quality. (MetLife is the other.)
Most companies determine personal property coverage by taking a percentage of the house replacement coverage. For the most part, this works, unless you have a lot of belongings or expensive stuff. Some companies offer online resources to help you determine the price of the personal items in your home. USAA's agents start with a base percentage but also ask questions to make sure there aren't special items or other reasons to increase the coverage.
This insurance covers your belongings to full replacement value up to the maximum of your policy in the case of damage. For theft, there may be some limits, but they are usually higher than those of other insurances. For example, USAA can pay to replace up to $10,000 in firearms in the case of theft, which is twice what the next top agency we reviewed offers without an additional insurance endorsement. It covers all electronics to replacement, but if you get an endorsement, it reduces the deductible you have for electronics specifically. In addition, it covers accidents like drops and spills.
USAA offers other endorsements for increased coverage for high-ticket items like jewelry, silverware, fine art, coins, cameras, stamps and musical instruments. Members can find the information on the USAA website or call a customer service rep to learn more.
USAA has a good reputation among its customers for customer service. You can make claims at any time, seven days a week, by calling or filling out a claims form online. The online form only requires basic information.
If you are getting a quote online and have questions, you can get answers through the virtual assistant, online chat or by phone. However, this company's customer service is only open for general questions during business hours, which can be an issue if you think you will be moving overseas. It also has a useful mobile app for managing your accounts and claims.
While the website contains some basic guides and explanations, it is not as detailed as some of the other insurance companies we reviewed. For example, there is no interactive home where you can scroll around a mock house to get hints on what should be covered or considered. However, the Home Circle section has numerous documents covering such things as tree care, preparing for earthquakes and checklists for determining water damage.
The website does not have tools for determining the value of your property the way most home insurance companies do, but it has a tool for risk assessment. You can put in your address and the tool lets you know the kind of risks the area faces for natural disasters as well as the likelihood of those risks. This can help you decide if you need extra coverage, endorsements or additional policies like flood insurance. No other insurance company we reviewed had such a feature. It's especially useful for military members who are moving to an area they know nothing about.
If your home is fully destroyed or severely damaged, USAA pays the full replacement based on construction costs. Only one other company we reviewed does this. The rest set limits at 120 percent to 125 percent of the coverage listed on your policy.
It also pays you loss of use until you can move back in. This covers the hotel and other fees associated with losing your home. USAA does not set a price or time limit on loss of use; you are covered until you can return home. Most companies have a set dollar amount or a limited time.
Members have access to online aids like tips for securing your home and what to do in disasters. These resources include guides on preparing, checklists and links to emergency services. In addition, you can sign up for a text alert service to get up-to-date emergency information.
USAA is the best homeowners insurance company of those we reviewed, but it serves the members of the U.S. armed forces and their families. If you are in the military, however, it should be on your list of agencies to consider. Its homeowners insurance provides full replacement value for your home and the items therein. In cases of theft, there may be some limits on specific items, however. The customer service is excellent, and the value per dollar you spend the best of those we reviewed.