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Contributor

I joined USAA while in OCS in 1977 and have handled almost all my insurance and finance needs through them since. I have always considered them a class act and one of the most member oriented organizations I’ve been associated with until the last couple of weeks. I just relocated from New Jersey to the Charleston, SC area, purchased some land and started the process of building a home. Since I’ve always used USAA, I first inquired about a construction loan. I was told that USAA did not provide construction loans, but would be happy to finance a loan once the construction was completed. This concerned me because this would require me to incur origination cost for both the construction loan and the home loan, effectively doubling the cost to me. Next I inquired about builder’s liability insurance during construction. I was told that because the new home was on the coast, USAA was limiting its liability and could not insure the property, but that they could refer me to another company that offered builder’s liability insurance. When I inquired why that was the case, I was told that because the location was subject to tidal surges that USAA would no longer insure the property. I explained that the property was not on the ocean, nor in an area subject to tidal surges, but was told that according to their data, it was. I asked what is specific was the disqualifier for the property, but was informed that that was what their data showed. Since the property is on a reservoir, I assumed that they thought that it was on the water, thus there was a possibility of surges, so I tried to explain that it sits on a reservoir that was 18 miles from the ocean and over 6 miles from a major river. I was given no specifics, but informed that the particular address fell into an area that was not insurable, but that houses nearby could be. Not really happy with the answers that I received, I decided to call back to talk to another operator on 23 May. I spoke with another insurance representative at that time and again asked about insuring my home once it was built. Upon being told that USAA would not insure my home again because they were limiting their liability in areas that were subject to storms, I asked for specifics on the areas of coverage to which I was told that not only the counties bordering the coast, but at least two counties inland. I was told that this policy was place into effect several years ago. To this I asked if USAA no longer covered the entire military community in the Charleston area. She told me that anyone already covered could still renew their policies, but no policies would be issued for new homes. I pointed out that I was aware of member that had moved to the area within the last eighteen months, bought a house less than a mile from where I was building and was able to get coverage. There was no explanation for this, but she explained that if you were active duty and reassigned to the area, there were exceptions that could be granted or possibly if I had received a Purple Cross for combat operations. I inquired further on the exclusions zones and was informed that this new policy included Florida and the entire eastern seaboard up to Maine. This surprised me since I had owned a house less than a half a mile from the ocean in New Jersey for 28 years and was not aware of this. I asked when members had been informed of this policy and was told that no member had been informed. Only if you buy or build a new home would you be informed of the new policy. I advised her that if this new policy was in effect, it would seem reasonable that with the potential to impact so many members that it should be published somewhere and that I would like to voice my concern about it. I was informed that there was a system in place where she could forward my concerns up to the board, but that they had not had a lot of complaints. I informed her that if no one was being informed of this the membership would not be aware that they needed to complain and that I wanted my concerns elevated. I went on to explain that based on this situation, USAA was no longer serving my needs. It was much more cost effective for me to get a construction loan that would convert into a home loan at a local bank and only have to pay one origination cost at a competitive rate. And since I could no longer get insurance coverage for my home and need to either go to one of their partner companies or other insurance company, the only thing they offered was automobile insurance and limited banking services. With that limited support, it made more sense to move my banking services to the bank that would actually support me and walk away from USAA all together. The young lady informed me that as a member of USAA for over 35 years, they didn’t want to lose me, but at this point in time the organization seems to no longer value my loyalty. As I watch more and more advertisements on the television for USAA trying to pull in new members, it seems that that has become higher priority than servicing it core membership, current and previous commissioned and warrant officer of Services, Reserves and National Guard. Moving forward, unless this situation is corrected, I personally will be looking beyond USAA for all financial and insurance needs other than car insurance. In the pass, because it was so easy, I didn’t bother to do a lot of comparisons, but this situation has changed my entire mindset. In addition, if this is in fact an established USAA policy on homeowners insurance, they owe it to their membership to make everyone aware of it. A long time, very unhappy member.

1 REPLY

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My house is 3 blocks from a 50+ ft drop that is a flood plain. I had the fight to get my hm coverage at the time. Cust service is not a priority anymore at this place. 2 botched insurance claims made me switch ins & now misinformed on a date for a retirement acct deadline. I like having bank,ins, investing in one place but only if the employees give accurate info & service.