Author Topic: Deciphering USAA Auto Policy (or any auto policy for that matter). Need help.  (Read 1508 times)

Swat

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I've posted a couple times in the past on a similar topic, but this post will be more comprehensive and hopefully can benefit other people who go through the same process with USAA (or even a good reference for any auto insurance evaluation). I will be finishing residency and moving form MI--> PA and just had a long conversation with a USAA representative after I found out I was eligible. FYI - if you are not directly in the military, only family member, you can't get USAA in MI (only state that's the case per the rep). I went through each of the options with the representative and I will offer what I am thinking and pose questions to the group where appropriate (bolded most important). I've also added numbers for each point to make responding easier. Background on me: 31yo, 31yo wife, 1 child, healthy, 400k net worth, 2016 owned CRV, 2016 leased CRV (will rectify that mistake shortly, long story, please don't judge). I certainly appreciate any/all feedback. 

General Questions: 

-They said I can't buy an umbrella policy without having a homeowner's policy which I wasn't sure was true. I asked b/c if I had umbrella, then maybe I didn't need as high of coverages on some areas of auto as I will list below. Would be more ideal to have some lower auto options with one big umbrella on top (although I know they have certain minimums on every category in order to even purchase umbrella). If this is true, can you purchase umbrella with a different carrier?

Policy Specifics:

1-Bodily Injury: options - 100/300, 300/500, 500/500, 500/1mil, 1mil/1mil. Was thinking 300/500 as I know this is a big area for high income individuals as I believe lawsuits can garner future earnings. However, some people have said you can't get enough of this. I currently have 300/500 as that was the most my existing insurer offered, yet now I see USAA has much higher options. Was thinking 300/500 with umbrella on top, but now as I'm unsure if I can even get umbrella, do I need more?

2-Property Damage Liability: options - 5, 10, 25, 50, 100. Was thinking 100 as that is highest. Is this necessary, and again, how does/would umbrella fit in here?

3-Limited Tort vs Full Tort: this was new to mean as I think is a PA specific item (although other states may have their own versions). "Limited tort" seems to limit the amount of pain and suffering or other non-monetary damages except in serious injury whereas "Full Tort" would cover them. Didn't run the cost comparison but was told ~15% savings with limited. Trying to figure out situations where pain/suffering comes into play and ultimately, which makes more sense for me. 

4-Uninsured/Underinsured: options - 15/30, 20/40, 25/50, 50/100, 100/200, 100/300, 300/500, Same as Bodily Injury. I was most likely going to keep the same coverages as I had for bodily injury at 300/500, but the decision will ultimately depend on what I finally decide to do with that section (see above). However, I'm trying to determine how important this section is. If I get hit by someone w/o insurance and have big medical bills, I have health insurance. If they total my car, there are other parts of the policy that cover that and it wouldn't financially ruin me. If someone gets hurt/killed, the bodily injury kicks in. If they are the ones who cause the damage and there is property/bodily, etc... can I be at fault? Am I missing something? Trying to find the importance of this section and if I should be much less than 300/500.

5-Coverage Stacking: options - non-stacked, stacked. I was unaware of this with my current policy but the way it was explained to me is that it will add the Underinsured/Uninsured coverages together if you have more than one vehicle. So if I have 300/500 on car #1 and 300/500 for car #2, then getting a stacked option would make it 600/1mil. Therefore, what is better: stacked policies with high limits (300/500) making sure lots of coverage, stacked policies with lower limits (100/200 or 100/300 for instance) since they will add together, or non-stacked with high limits (300/500)?

6-Basic first party benefits (& Medical expense benefits): options 5k, 10k. Seems to pay for medical expenses, religious healing, etc... Required in PA. My thoughts are that if I have health insurance already, why pay more than I need to. Was going with 5k.

7-Added First Part Benefits:
a)Medical Expense: options - decline 25k, 50k, 100k. Not sure how this is different than medical expense under the first party benefits section (I guess it is optional coverage unlike the basic benefits). However, was going to take lowest option possible. I just don't see how this is important if you already have health insurance which inherently has an out of pocket max. Why do they even offer these options? Is it only for those that don't carry health insurance, or will it pay you for the Out of pocket max on your medical insurance?
b) Funeral expenses: options - decline, 1500, 2500. Plan to self insure here. 
c) Accidental death benefits: options - decline, 5k, 10k, 25k. If I die, spouse gets a benefit. Was going to decline since both of us have individual life insurance already.
d) Work loss: options - decline, 5k per person/1kmonth, 15/1, 25/1.5, 50/2.5; begins after 5 working days lost. Planned on declining. Self-insure in short term (<90 days) & have disability insurance already. 

8-Other than Collision: options - decline, 50, 100, 150, 200, 250, 300, 500, 1k. As cars are relatively new, was going to opt for 1k here and self-insure up to that amount. When car values <10k, then will drop the coverage entirely. 

9-Collision: same options and ultimate decision as "other than collision" section. 

10-Car Replacement Assistance: options - decline, 20%. if vehicle is considered a total loss, they can pay you an additional 20% to help. For instance, 10k car gets totaled. They pay you 10k without the benefit or 12k with the benefit. Was going to decline and self insure. 

11-Accident Forgiveness: options - decline, accept. If you choose coverage, they will give you "one free pass" every five years for an accident without raising your rates. This is for the entire policy, not per individual. Forgot to ask how this applies if you are found NOT at fault vs AT fault. Not sure about adding this option or not and am curious other's thoughts. I think I'm a pretty good driver with lower commutes (as an attending), but I've been in 2 accidents in residency (I wasn't at fault in either and other parties received tickets so I think it was just bad luck).

12-Rental reimbursement: options - decline, economy, standard, truck, large SUV. Plan to decline and self-insure and borrow family members vehicles if necessary.

13-Towing and Labor: options - decline or accept. I currently have AAA so will decline. However, not sure if I should decline AAA and go with this option. However, AAA does have other perks with discounts, etc...

Sorry for long post, but I think this is applicable to many people and hopefully will not only benefit me. While I am most interested in those with USAA, obviously anybody with car insurance can offer their 2 cents. I have yet to get quotes from some other companies in Pennsylvania, but wanted to start here. Thank you for your consideration.

Awesomeness

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Ive had USAA for 18 years now.  I have noticed customer service is not as good as it used to be.  Sometimes I will get a rude agent or inaccurate information and that is frustrating.  However I have had about 4 auto claims over the years and they were all handled very well.

Iíd advise you to call them back and ask them more questions. They can be very thorough and helpful.  Itís probably true you canít get an umbrella policy without homeowners but ask again and if you get a different answer tell them so and have them put you on hold while they get the right answer.

I opted for higher liability on my auto policy. 100/300. Its cheap.  I have a lower deductible, 300$ because I donít have much cash.  Also comprehensive is my most common claim, hail has gotten me more than once and my car is only a few years old.  I want to keep it nice.  I also got Car Replacement Assistance because Iím a bit upside down. That gives me a 20% jump in value for a replacement claim. 

I have 100k property damage. In the past I have owned a truck and trailer with a combined value over 100k. Cars can be expensive. Declined medical payments because I have good health insurance. Also declined death benefits because I have a life policy. 

When you have a policy you can go online and tweak the coverage and see how it effects your premium. Also click on the titles and itíll give you a more detailed explanation of that coverage option. Itís a neat tool.

I pay 500$ every 6 months for a Scion xB.  I also have a 20 year old son away at college but heís only 60$ of that premium thankfully. Iím probably a tad over insured but itís minimal and I feel fine with it.

Good luck.


briesas

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I've been trying to decipher this myself. I opt for the 2nd highest options on Bodily injury, uninsured/under insured and medical payments ; 50k on property damage and decline or minimal on most other options -- but there are way more options overall than I expect, and it's hard to figure out. I've tried to decline coverage where I think other insurances, like my health insurance, would kick in.  Hope someone has some good insight, and thanks for posting!

My coverage (not including comprehensive and collision) is copied below

1. Liability Coverage
Bodily Injury Liability
If you hurt someone in an auto accident,

we'll help pay up to
$ 500,000/1,000,000

per person/per accident
Premium
$ 83.61
per six-month term

2. Property Damage Liability
If you damage someone else's property in an auto accident,

we'll help pay up to
$ 50,000

per accident
Premium
$ 56.12

per six-month term

3.   Injury Coverage
Uninsured Motorists Bodily Injury
If an uninsured driver injures you or your passengers,

we'll help pay up to
$ 500,000/1,000,000

per person/per accident
Premium
$ 14.05

per six-month term

4.Underinsured Motorists Bodily Injury
If an underinsured driver injures you or your passengers,

we'll help pay up to
$ 500,000/1,000,000

per person/per accident
Premium
$ 9.83

per six-month term

5.Medical Payments
If you or your passengers are injured in an auto accident,

we'll help pay up to
$ 100,000

per person
Premium
$ 24.32

per six-month term

6.Extended Benefits
If you or your passengers are injured in an auto accident, we'll help pay up to the limits selected.

Coverage Declined

7.Wage Earner Disability Benefits
Coverage Declined

8.Essential Services Disability Benefits
Coverage Declined

9.Death Benefit
Coverage Declined


10. Accident Forgiveness
Stop a future accident from increasing your premium. This feature applies to only one at-fault accident per policy at a time.


11. How to Earn Accident Forgiveness
Earn Accident Forgiveness by keeping an accident-free driving record with USAA for five years. Once you've earned Accident Forgiveness, you will receive it without paying any additional premium.


Feature Earned
This feature is included because you have kept an accident-free driving record with USAA for five years.

Coverage Selected
Premium
Included

12. Rental Reimbursement
Pays for a rental vehicle while yours is being repaired due to a covered loss.


Coverage Declined

13.Towing & Labor
Provides emergency roadside assistance (such as towing, flat tire changing and delivery of gas).



Coverage Declined

14.Ride Share Gap Protection
Extends coverage when you are waiting to accept an assignment from a transportation network company like Uber, Lyft or Sidecar.



 

« Last Edit: March 30, 2018, 10:44:49 AM by briesas »

dogboyslim

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-They said I can't buy an umbrella policy without having a homeowner's policy which I wasn't sure was true. I asked b/c if I had umbrella, then maybe I didn't need as high of coverages on some areas of auto as I will list below. Would be more ideal to have some lower auto options with one big umbrella on top (although I know they have certain minimums on every category in order to even purchase umbrella). If this is true, can you purchase umbrella with a different carrier?
Different carriers have different rules about umbrella eligibility.  Most require you to have all your underlying coverage with them, or at least require you to produce evidence that the underlying coverage is present.  I suspect when the rep said you had to have a homeowner's policy that a rental policy would also suffice, so long as your liability limit on that rental policy was sufficiently large.  Its worth asking about.  Rental policies are quite inexpensive.  These are often called HO4 policies.  If you have a condo, condo-owners policies should also qualify you for umbrella coverage.  (These are HO6 policies).

Policy Specifics:
1-Bodily Injury: options - 100/300, 300/500, 500/500, 500/1mil, 1mil/1mil. Was thinking 300/500 as I know this is a big area for high income individuals as I believe lawsuits can garner future earnings. However, some people have said you can't get enough of this. I currently have 300/500 as that was the most my existing insurer offered, yet now I see USAA has much higher options. Was thinking 300/500 with umbrella on top, but now as I'm unsure if I can even get umbrella, do I need more?
Bodily injury coverage pays for medical bills and other physical injury to other people in an accident where you are at least partly at fault.  The splits represent internal limits.  For 300/500, it means that for any one accident, the most it will pay for bodily injury for one claimant is 300k, and the most it will pay for the entire occurrence is 500k.  Example, you blow a stop sign and crash into two people, causing massive injuries to each.  Person one has $350,000 in injuries, person two has $250,000 in injury.  The policy will look at the first person, hit the 300k per person cap, and pay out 300k.  It will then look at the second person who is not limited by the per-person cap, but is limited by the per occurrence cap, and they will pay 200k, for a max payout of 500k.  (This is a simplified example, the payouts would actually be adjusted to be the "most fair" for each).  Now that you know what the limits cover and how they apply, what coverage do you need?  95% of losses are under $25K, but if you happen to injure someone greatly, the extra limit helps protect your assets.  If you can qualify for an umbrella, the minimum limits you can choose are likely 250/500.  This is a personal choice.  In the  scenario above, the umbrella would cover the additional losses both on a per-person and per-occurrence basis, so the umbrella would pay 50k to cover the shortfall on claimant 1, and and 50k to claimant 2, and you would still have 900k of limit to cover the third claimant who was discovered at a later date. (not likely, just an example of how much limit is left).

2-Property Damage Liability: options - 5, 10, 25, 50, 100. Was thinking 100 as that is highest. Is this necessary, and again, how does/would umbrella fit in here?
  This coverage pays for things you hit in a vehicle crash where you are at least partly at fault.  Think other cars, fences, walls, etc.  This is usually per occurrence, not per vehicle, so if you crash into two vehicles at the same time, most carriers will only apply one limit.  With suburbans at 85-90k and F150s up to 65-70k, I personally will never go lower than 100.  Many carriers offer more.  If you have an umbrella, the umbrella is typically an extension of coverage for an underlying covered loss.  A $1M policy would usually cover the $1M layer of loss starting at the underlying policy limit, and covering (in this case) up to $1.1M.

3-Limited Tort vs Full Tort: this was new to mean as I think is a PA specific item (although other states may have their own versions). "Limited tort" seems to limit the amount of pain and suffering or other non-monetary damages except in serious injury whereas "Full Tort" would cover them. Didn't run the cost comparison but was told ~15% savings with limited. Trying to figure out situations where pain/suffering comes into play and ultimately, which makes more sense for me.
This is a PA thing.  Full tort works like BI works in almost all states.  Limited Tort removes much of the legal challenge around coverage until a threshold is met (which I don't remember).  After that threshold is met, THEN the legal system can be engaged.  Be aware that you are selecting YOUR election here.  If you have limited tort and injure someone with full tort, they are not limited in their legal options.  If you are HIT by someone else, then the election of limited or full tort comes into play.


4-Uninsured/Underinsured: options - 15/30, 20/40, 25/50, 50/100, 100/200, 100/300, 300/500, Same as Bodily Injury. I was most likely going to keep the same coverages as I had for bodily injury at 300/500, but the decision will ultimately depend on what I finally decide to do with that section (see above). However, I'm trying to determine how important this section is. If I get hit by someone w/o insurance and have big medical bills, I have health insurance. If they total my car, there are other parts of the policy that cover that and it wouldn't financially ruin me. If someone gets hurt/killed, the bodily injury kicks in. If they are the ones who cause the damage and there is property/bodily, etc... can I be at fault? Am I missing something? Trying to find the importance of this section and if I should be much less than 300/500.
  This is insurance that covers a 3rd party at fault person who does bodily injury to you, but who does not have insurance (or enough insurance).  You are in effect selecting the BI limit of the person that is going to hit you.  Then, no matter what coverage that person actually has, you are covered up to that limit.  I'd go as high as you can.  Be aware that most umbrella policies do NOT provide UM/UIM coverage.  Especially if you are a vulnerable road user (cycling, running etc.) you may want to up this limit to be sure that if you are hit and seriously injured you are not limited to the recovery of the non-insured person's assets, which is likely nothing.  This prevents you from hitting any lifetime caps on your health insurance policies, and provides coverage without deductibles nor out of pocket requirements/co-pays.

5-Coverage Stacking: options - non-stacked, stacked. I was unaware of this with my current policy but the way it was explained to me is that it will add the Underinsured/Uninsured coverages together if you have more than one vehicle. So if I have 300/500 on car #1 and 300/500 for car #2, then getting a stacked option would make it 600/1mil. Therefore, what is better: stacked policies with high limits (300/500) making sure lots of coverage, stacked policies with lower limits (100/200 or 100/300 for instance) since they will add together, or non-stacked with high limits (300/500)?
Stacking or not stacking is a state by state thing.  Your understanding is correct.  Insurance companies often will force you to keep all the car's limits the same.  Stacking is obviously more expensive than non-stacked.  Again, this is just a limit choice and a premium trade-off.

6-Basic first party benefits (& Medical expense benefits): options 5k, 10k. Seems to pay for medical expenses, religious healing, etc... Required in PA. My thoughts are that if I have health insurance already, why pay more than I need to. Was going with 5k.
Again, co-pays, deductibles, max out of pocket.  If you are okay paying those through health insurance, nothing wrong with your election.

7-Added First Part Benefits:
a)Medical Expense: options - decline 25k, 50k, 100k. Not sure how this is different than medical expense under the first party benefits section (I guess it is optional coverage unlike the basic benefits). However, was going to take lowest option possible. I just don't see how this is important if you already have health insurance which inherently has an out of pocket max. Why do they even offer these options? Is it only for those that don't carry health insurance, or will it pay you for the Out of pocket max on your medical insurance?
b) Funeral expenses: options - decline, 1500, 2500. Plan to self insure here.
c) Accidental death benefits: options - decline, 5k, 10k, 25k. If I die, spouse gets a benefit. Was going to decline since both of us have individual life insurance already.
d) Work loss: options - decline, 5k per person/1kmonth, 15/1, 25/1.5, 50/2.5; begins after 5 working days lost. Planned on declining. Self-insure in short term (<90 days) & have disability insurance already.
Higher limits to avoid medical expenses for people with no insurance or HDD plans.  I find the funeral/AD& Work loss to be kind of expensive, and unnecessary depending on if you have other coverage for life/ST Disability.

8-Other than Collision: options - decline, 50, 100, 150, 200, 250, 300, 500, 1k. As cars are relatively new, was going to opt for 1k here and self-insure up to that amount. When car values <10k, then will drop the coverage entirely.
Animal hits, glass breakage, hail/weather loss, flood, theft.  Your strategy here seems sound to me.

9-Collision: same options and ultimate decision as "other than collision" section.
This repairs damage to your car in the event you damage it in an accident where you are at least partially at fault, or if the other driver is uninsured.  Pretty much goes by the name...if your car hits/is hit by something other than an animal/act of nature, this is the coverage that will repair your car.  Keep in mind that both 8 & 9 only cover you to the actual cash value of your car, or the value of your car as it would have been immediately prior to the occurrence.  If your car is new, some carriers offer new car replacement, but that is usually at additional cost.

10-Car Replacement Assistance: options - decline, 20%. if vehicle is considered a total loss, they can pay you an additional 20% to help. For instance, 10k car gets totaled. They pay you 10k without the benefit or 12k with the benefit. Was going to decline and self insure.
Okay, this is what I referenced above.

11-Accident Forgiveness: options - decline, accept. If you choose coverage, they will give you "one free pass" every five years for an accident without raising your rates. This is for the entire policy, not per individual. Forgot to ask how this applies if you are found NOT at fault vs AT fault. Not sure about adding this option or not and am curious other's thoughts. I think I'm a pretty good driver with lower commutes (as an attending), but I've been in 2 accidents in residency (I wasn't at fault in either and other parties received tickets so I think it was just bad luck).
The actuaries I have worked with call this the pre-paid accident surcharge.  The Not at fault question is one you should ask anyway, I bet your customer service person doesn't know how not at fault accidents impact your premium.  Statistically they are relevant and many companies use them in rating.  Sucks if you are rear-ended at a stop sign and then your rates go up, but the correlations are there to prove that cohorts of people with not at faults in their past have more claims going forward.  Sorry, that was an aside.

12-Rental reimbursement: options - decline, economy, standard, truck, large SUV. Plan to decline and self-insure and borrow family members vehicles if necessary.
If you have ready access to another car and can use it for 2-3 weeks at a time, I agree you should decline.

13-Towing and Labor: options - decline or accept. I currently have AAA so will decline. However, not sure if I should decline AAA and go with this option. However, AAA does have other perks with discounts, etc...
Call AAA and ask them if they will tow your car to a shop if it is in an accident and cannot be driven as part of your benefits.  If they say yes, decline.  If they say no, don't decline.  Call the insurance company and ask if they will tow your car to a shop if it just breaks down at the side of the road with no other covered losses.  If they say yes, consider it acceptable to cancel AAA, if they say no, you still want AAA.  Carriers have different rules about WHEN towing and labor are covered.  Also, usually you have to have collision and other than collision (also called comprehensive) on a vehicle to get this coverage and the rental reimbursement coverages.

Sorry for long post, but I think this is applicable to many people and hopefully will not only benefit me. While I am most interested in those with USAA, obviously anybody with car insurance can offer their 2 cents. I have yet to get quotes from some other companies in Pennsylvania, but wanted to start here. Thank you for your consideration.

All of my comments are from a general perspective, I do not know the details of USAA, and its been a while since I reviewed the tort options and rules, so while I have no intent to mislead, know that this is all just based on my memory from working on the state 4 years ago.  Good luck with your decisions!

Dee18

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I have an umbrella policy with USAA. I have my car and renters insurance with them, but no homeowners as I do not presently own a home.