USAA is my favorite bank and the company with which my wife and I insure our home and autos. You can’t beat their customer service, and their insurance premiums are always some of the lowest you will ever find! I have been a happy USAA customer for about 7 or 8 years now, and I don’t think I will ever leave them.
That said, I’ve had discussions with some of their other members on other occasions and one thing there is always some misconception about the Subscriber Savings Account (SSA) that belongs to each USAA member with a property and casualty policy.
USAA recently sent out SSA notices to their account holders, so I decided to take this opportunity to explain what they are.
Subscriber Savings Accounts
Subscriber Savings Accounts (SSAs) are a byproduct of the legal structure of USAA. One of the interesting features about USAA is that it is not a publicly owned company, USAA is actually member owned. This is important because it gives USAA different options for raising capital.
Publicly owned companies sell stock to raise capital; USAA holds it capital in member owned SSAs. These funds are held in reserve for USAA to satisfy legal requirements and pay for catastrophic losses and other catastrophes.
It’s your money, but it is held by USAA. An SSA is your money, but it isn’t a bank account. The money held in in an SSA under each member’s name, and remains there in the event USAA needs to use the money to pay insurance settlements or claims. Members are not able to make withdrawals or deposits to or from their SSA.
SSA Balance. Money is allocated to your SSA depending on several factors, including a percentage of the particular member’s property and casualty premiums, USAA’s investment portfolio and performance, the member’s SSA balance (sometimes distributions are made on a percentage basis), longevity as a USAA member, and other factors.
SSA Distributions. USAA board members have the option to make financial distributions to its members based on how well USAA’s investments performed, how much money each person has in their SSA, and a multitude of other factors.
How to get your SSA money back. There is actually no way to get your SSA funds back unless you close all of your property and casualty policies. Your SSA will be paid out approximately 6 months later. When my wife and I consolidated our policies after we got married, I received the balance of my SSA after closing my account – about $160. The good news is that receiving your SSA funds is not generally taxable because it is considered a return on premiums. Be sure to check with a tax adviser for more details.
Distributions are not guaranteed. USAA has a track record of giving their members distributions, but it is important to note that these are not guaranteed. Still, it is nice to know that you can receive a return on your premiums if you ever leave the company. Most insurance companies end up keeping those funds!
USAA Membership: USAA membership is a privilege earned by those in uniform — and it’s a privilege that can be handed down to their children. Those eligible to join the association include:
- Active duty officers and enlisted military personnel.
- Former spouses and adult children of USAA members.
- National Guard and Selected Reserve officers and enlisted personnel.
- Officer candidates in commissioning programs (Academy, ROTC, OCS/OTS).
If you think you may be eligible for membership, I highly recommend looking into it!
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{ 29 comments… read them below or add one }
USAA is the best. When I do a financial plan for someone, I usually shop their car and auto insurance to save them a few bucks. If they are with USAA, I don’t even bother. It can’t be beaten. Or, if it can be, it isn’t worth leaving because USAA serves its customers so well.
Also, I think it is important to reiterate that USAA is owned by its members. This means the board of directors are working for its members, not shareholders. This difference can not be overstated. It creates a completely different mentality, which only benefits USAA members.
Vanguard is run this way as well. This is why Vanguard keeps its fees low and puts the interest of its customers first.
As far as the SSA account, Ryan nailed the article. And, it sure is nice to get the SSA check each year.
We are just getting back with USAA for our banking (they were our source for insurance a few years back) and we have been impressed so far with their level of customer service! It’s a big selling point for them in all aspects of the financial services arena.
Jerry
USAA is great unless you have the misfortune of being unemployed for 6 months and filing for bankruptcy. Then USAA becomes very vindictive and as my attorney stated “they were acting very childish”. They cancelled my auto and other insurance policies despite my excellent driving record and never having filed a claim.
Hello Allan,
I’m sorry to hear about your unemployment and experience with USAA. All I can say about them is based on my personal experiences, which have been positive.
I hope you have been able to find a job and get your situation sorted out. Best of luck to you.
Does the SSA need to reported on our Federal Tax Return? Is this a source of Income?
Hello Jeanne,
From what I understand, this is money you paid into the system and is not income. So, no, I don’t believe it needs to be reported as income to the IRS.
Ryan,
Your statement “There is actually no way to get your SSA funds back unless you close all of your property and casualty policies” isn’t 100% accurate.
While you cannot get all the funds from your SSA, there is a way to get USAA to distribute you an additional 10% of your funds over and above the “normal” SSA distribution amount. The problem is you have to be a policy holder for 40 years or more.
From a USAA SSA brochure mailed to members in February 2009:
“To recognize members with more than 40 years of membership, the USAA Board of Directors may also authorize a Senior Bonus, which is an additional 10 percent distribution from the members Subscriber’s Account. If authorized, the funds will be distributed in February.”
Ken
Ken, thanks for the info. I was not aware of that clause, but it is good to know. This probably doesn’t affect too many customers though, so for the most part, people will not be able to access those funds without closing their policies.
Always remember this–USAA is just a business, and nothing more. They are out to make money, and nothing more. When they expanded beyond the officer corp it was to make money, and nothing more.
If you mess with them, and cost them money, they will attempt to get even, as you have cost them the opportunity to make money.
Don’t think for one minute that they are your ally or pal.
They are a business, and nothing more.
John: Very true – USAA is a business, and they operate to make money. But what sets them apart in my experience is their great customer service and willingness to work with their customers when they need assistance.
A friend just told me he was a day late with his car insurance payment and USAA cancelled his membership. He was a 12 yr customer. Not just his insurance, but his entire membership was cancelled, which is non-negotiable. He still has his bank account, but can’t access it online. He is now looking for a new bank and insurance company. This is disturbing to me as I have much more invested in USAA, i.e., my mortgage. Any thoughts on this are appreciated.
Jim: I haven’t heard any stories like this, and I don’t work for USAA, so I can’t comment on their policies. In my experience USAA has had exceptional customer service and I have enjoyed banking with them.
Regarding your friend’s situation:barring a customer from his/her bank account doesn’t seem legal and canceling a customer’s account for a payment that is only one day late seems a little extreme. Perhaps there is more to the story than your friend told you, or than even he knows (perhaps his account was hacked or he was a victim of identity theft?).
I recommend that he contact a customer service rep and try to get more information about why his account was shut down. There could be other more troubling issues at the root of the matter.
Best of luck to you both.
I’m currently experiencing the “wrath” of USAA for non-payment–caused by their misinformation. I updated my auto policy by adding another vehicle and was told that I had nothing to pay at that time. My six month premium would reflect the change when it came due. I found out the hard way, when my online access was blocked and I could not access bank account information. After speaking with several departments I finally put the pieces together….my insurance was dropped and that meant that all of my other USAA accounts would be canceled as well. Of course I was notified about all this? NOPE. I was supposedly sent notices in the mail, but not once did I receive a phone call.
I am beyond disappointed at the customer service and commitment from current USAA. I was a memeber for 12 years with no previous hassles. I often received courtesy calls for bills or account difficulties, but now it seems that this is not the USAA I once trusted.
Mike: You’re the second person who has made a similar comment. It doesn’t make sense to me that USAA would cancel all other accounts, but apparently that has happened to a few other people as well.
USAA has been nothing but helpful when I have called about issues in the past, but things can always change. Thanks for sharing your story.
I had a similar experience with USAA closing my account while I was on TDY out of the country and not allowing me to have access to my checking account. My auto insurance was due on March 20, 2009 by March 27 I couldn’t access my account online. I requested that my insurance payments come out of my account automatically. Oh yeah did I mention that I had just set this insurance up in February and paid 20% of the premium up front. So anyway, I thought the payment would come out directly. When I contacted the USAA to inquire about the inability to access my account that’s when I was informed my auto insurance was canceled. And my other accounts would be closed. I appealed it and lost because they asked the representative who set up my account did he remember me asking him to set up direct billing! Naturally he said no. I am a single parent and enlisted and I do want to go back to USAA because of their rates. I received an email for unconditional cancellation for nonpayment and a over a month later a refund check for the amount which was more than my monthly premium. Is USAA just trying to get rid of military personnel. A friend of mine had a similar experience.
I have had the very same experience after being placed on disability for a broken back and hip this last year…I called to work out payment arrangements (my account was nearly 30 days overdue) and thought I was given correct information by Customer Service. I received a Cancellation instead.
I then tried to work things out THREE more times; sending them $850.00 over 3 weeks; following their specific instructions to the letter. Each time I received a Cancellation Notice for my efforts.
I am a 22 year customer, a widow of a Major killed while on Active Duty. By the third Cancellation and “change” in the terms agreed upon previously? I gave up.
I think that USAA has just gotten too big to be bothered with those of us who find ourselves in dire straights. I may be wrong here, this is just my opinion; unfortunately, I have found that my experience is not a singular one.
I am glad that you are happy with them Ryan and wish you all the best.
Lori, I am sorry to hear about your negative experiences with USAA. As I mentioned in the article and comments, I have only had good experiences with them. But I have also read quite a few stories similar to yours, which make me think twice. I will maintain my relationship with them until something happens that convinces me otherwise, and I hope that nothing does.
Regarding USAA, I have been a member since 1978. I will be closing my account and association with them effect 9/15/09 when we close on our home. I think the claim or belief that USAA rates for it’s “exclusive” members is a “myth” based on what was once fact. Of course it continues to get perpetuated. They have grown so fast that they are now just another big insurance company. Granted, they are a well run, extremely stable company, but nothing like it was 35 years ago. When it was a company that limited its membership to military officers, it was a company that had members that were by their very nature less of a risk. College educated, military officers (mostly career or retired) are by and large a more stable group. Better group means less cost to the insurance company. When they expanded their base, they assumed more risk. Their customer service is very efficient, IF you can make your way through the horrible telephone menu system and talk to a person that does not sound as though they are a robot. Their customer service training must involve a brain lobotomy to remove all personal human interaction with customers. Again, very efficient as long as you do not get them off script.
Last by not least. Met Life, here in their home base of San Antonio, will be beating their quote for auto and home insurance by over 20% a year. In fact their coverage will exceed USAA in a couple areas at that reduced cost. The best part is that when I have a question I call my personal agent and talk to a nice young lady who actually remembers me from previous conversations.
Good bye USAA, you ain’t what you once was. I look forward to my $3000 SSA check sometime next year.
Having just read my post I am adding a note to apologize if I have offended any current USAA members who are NOT military officers. Granted you are many. I did not at all mean to imply that you could not or would not be equal to or above the character of an officer. My simple, poorly stated comment, was to try to emphasize that the company was “smaller” and as a group had members that would be considered “less risk” as seen by an insurance actuarial table. Young, healthy, college educated, no criminal record, and under the thumb of a higher ranking commanding officer who would bring down the hammer if you got out of line. Today, USAA has become like the Credit Union, if you have ever saluted a flag or said the pledge of allegiance, you can probably get insurance from them.
Again, I apologize for probably offending many good people…
I am in the process of leaving USAA. Started five years ago when they sent me to Progressive to insure my boat. Recently they quoted me a home insurnace premium, in Florida, for 110% of two other viable companies (they won’t directly insure in Florida). Lastly, they want to charge me an additional $150 month for auto insurance. I’m moving from snow/traffic/road rage Virginia to a gated sedate community in Florida. They have basically told me they don’t want my business. I think my SSA account has several thousand dollars in it. It will pay for all my insurance for next year. Yee Haa
Steve, I understand your desire to leave, and it makes good sense. I use USAA because they are still competitive where I live. But I wouldn’t hesitate to go elsewhere if the rates were substantially different.
I also use USAA for my banking needs, and so far they have been great for that. But I also use a ING Direct and a local bank for my business. It’s never a bad idea to diversify.
I banked with USAA for over 3 years and had excellent service. That all changed when I had to file for Bankruptcy and USAA blocked my online access to my accounts. No notice from the bank or anything.I have since switched to Bank of America. I am very disappointed with how this was handled.
I was an a big fan of USAA, until I got into a car accident in which I was told that I would be not longer allow membership. Here is my question would I still get my SSA balance after 6 months. Total of about 1,700
I have recently filed for bankruptcy in order to try and save our home. I am discharging credit cards and surrendering a vehicle through USAA. In essence, they have stated to me in writing on a form that they will:
BLOCK ACCESS TO USAA.COM
REVOKE ELECTRONIC DELIVERY DOCUMENTS
TERMINATE WEB BILL PAY
And will start the process of discontinuing business relationshipe with me and my wife due to the violation of mutual trust and respect to fellow members.
I guess there goes my homeowners, life insurance, and vehicle insurance policies due to trying to survive, maintain our home and family and support our children. it does not make sense that they would cancel all my products and services, as I sent them an email to clarify in details. We have been good customers for years into financial chaos hit. Any other company would not be doing this as far as I know, I could be wrong. I guess it is Austa Luego USAA, cause I wont be back!!! If that is the case.
USAA is NOT what it once was…it has definitely become a vindictive large impersonal uncaring entity. fter 15 years my parents had one their first claim on their homeowners due to a power outage that caused food to go bad in their refrigerator. USAA cancelled their homewoners.
I had financial difficulties and had to file bankruptcy, and USAA cut off my online access to my insurnce and my abilioty to electronically pay my insurance bill with USAA. INCREDIBLE!! Cut off my electronic access to pay my USAA Insutrance bill on line? I have no idea who is making these policies, but I can’t image the Board of Directors and the Trustees would approve it. THis policy really reflects badly on USAA in my opinion.
I just received a call from USAA, I was told that if I did not add my 20 year old son on my policy that there was a chance that our policy would not be renewed. I removed our son 8 months ago because frankly he is not a responsible driver. He had his own ploicy and he has let it lapse. We have been with USAA for 15 years. Not a single ticket, late payment, or claim. We have 3 high dollar cars, an RV, Golf Cart, and 2 utility trailers. Our policies are about 1600 dollare every 6 months. It just not make sense to me that they can force me to add an adult to my policy that I don’t want on. He does not operate any of our vehicles. Anyone else hear about this. We have about 3000 built up in our SSA and i will be calling for quotes tomorrow elsewhere.
Bobby,
I can only think of two things going on here:
1.) It seems possible they meant that your 20 year old son would lose his coverage with them if he wasn’t added to your policy (if he has his own USAA policy).
2.) They may believe your 20 year old son is still using your vehicles, and they want him covered.
I would contact them and get clarification on their meaning. There is no reason they should drop your coverage for not wanting to add someone to your policy. But if they did, I would move on. You shouldn’t be forced to carry another legal adult on your policy, particularly if that person would cause a large increase in your rates.
Thanks for the reply Ryan.
1. His policy with them has been cancelled due to non payment. (20 year old with lack of responsiblity, he wrecked his truck afetr I took him off our policy last year)
2. They are aware he is not driving any of the vehicles.
The guy claimed that if he was living at home, which he comes and goes, I have to carry everyone on the policy that has a valid drivers lisense. I find this to be ridiculous. I am not concerned about the rates I am more concerned about my liability if he is under my policy. If he were involved in an accident I woulld/could still be liable because he is under my policy. Thanks
USAA is the best bank if you dump and continuosly dump all your financial assets into their very big basket. Shop around, talk to your grandparents about where they bank and or invest.
They (your grandparent) have a lot to lose and don’t take a lot of risk. USAA will open doors but will remove the hinges if you make a economic mistake or shift your eggs around.
For what it’s worth, they’ve had a positive and negative impact on my life. I’d grade them 65% good and 35% bad. The thing is, the bad or 35% is very powerful and grossly negative. It just may be time to move on. I do thank them for all the positives and educating me with negatives.