> Last year, former USAA CEO Wayne Peacock received $14.1 million in total compensation from five USAA insurance companies for working slightly more than a quarter of 2025 before his retirement. That was a 47% increase from the $9.6 million he received in salaries and bonuses in 2024. Other executives at USAA also received pay boosts in 2025.

At about 1M policy holders that’s about $14 per policy. Not bad for a couple months work.

At this point, I buy all insurance (home, auto, health etc.) with highest deductible and lowest premium knowing that there is a high probability that insurance will not pay (or pay only partially). I mainly buy insurance to avoid catastrophic losses and hope that, if such an event were to happen, they would cover the loss at least partially. For smaller losses I am willing to absorb the loss and save money on premium every year. The money saved on premium can be used (to some extent) to cover the loss of the denied claim. Also, in the event of a loss, having high deductible discourages me from filing claim which keeps premium low for subsequent years.

This is interesting because it doesn't fit with my own experiences dealing with USAA home or auto insurance claims. During 2025 we had contacted them twice to file claims and in both cases the claims were paid according to the existing policy coverage level with zero hassle. Our initial contacts were by telephone and almost all of the paperwork was managed thru their online portal with follow-up phone calls to insure that everything was in order. Their claims reps arrived as scheduled, evaluated covered damages, and submitted documentation to support our claims.

In one case dealing with our house, I discovered a calculation error in my favor and submitted the corrected documentation to them. After examining that data they agreed and modified the claim to correct that error.

With the exception of the adjuster visits, all contacts with USAA were managed over the telephone or thru texts and emails. They are efficient and easy to reach.

I can see where USAA's statements that the numbers are off. From the article:

>In a statement, USAA said the association’s data is misleading because it lacks context about why a claim may be closed without payment. Those factors could include claims that were later reopened, claims covered under separate policies or multiple claims from a single event that are consolidated into one case.

A touch of nuance from someone in the industry (CTO at a startup that sells home and umbrella insurance):

Most of the issues here stem from problem the sales as opposed to the claims process. Customers are, structurally, under-educated on what their policies actually cover and this produces unrealistic expectations about what they should file claims for.

Emphatically, this is not their fault but an industry-wide issue that has complex causes like brokers/salespeople getting increasingly squeezed to produce as well as the intense time pressure under which many folks purchase their homeowners insurance policy (folks are often sprinting to check this box to secure a mortgage). Sadly, there is also a strong correlation between consumers experiencing worse socioeconomic conditions and failed claims. This, to me, generally suggests that some behavioral insights should be brought into the sale and management of the financial product to better protect these buyers' interests.

It is important to highlight and understand this point of failure because: 1) claims (even failed ones) are one of the easiest ways to get your rates jacked up as this is a category that insurers are allowed to price on. 2) The common response to articles like this is that "of course insurance should cover more things" but this counterintuitively risks creating more dead-weight loss for consumers broadly in the form of coverage for things that we simply shouldn't be insuring (and instead should be maintaining and replacing).

All that is to say: ask your broker / agent what's in your contract. Do it BEFORE you have a claim to file as in some cases speaking to them (especially captive agents) may in and of itself trigger a claim.

AI-native brokerages (like what we've built) are part of the solution to this problem since well-constrained LLMs can help buyers and users get a much better sense of what their contracts actually cover, and whether or not they should submit a claim.

Dropping all forms of insurance was the #1 motivation for me to pay off my mortgage. My rate was under 3%, but insurance is absolutely brutal once you factor in the bureaucratic hell that must be navigated to get any kind of payout. The premiums are off the charts too. $10k+/yr for a ~$350k cardboard box in Texas is absolutely insane.

The biggest scam I've seen in real estate is mandatory windstorm insurance (TWIA & friends). I've been through multiple hurricanes where claims were involved and it would have been significantly better if the premiums were simply left in a savings account to compound over time.

Any kind of disaster that would require complete reconstruction of your home would likely violate whatever "act of god" clause happens to exist in literally every policy. Not having insurance is not equivalent to being at risk for the total property value (in any practical sense). $10k goes a long way when you are repairing wood and plastic that is mostly still standing. If you are fortunate enough to have a few years between catastrophes (as typically you do), then it's generally never a problem.

A simple rule for today's economy: If you cannot afford the property on cash basis, you should probably try to find a cheaper property. The risk of mandatory insurance premiums creeping up into the danger zone is too high. Even if it starts out OK, you may find that your escrow account requirements start to outpace your principal and interest obligations over the years.

USAA doesn't operate its own mortgages anymore. They sell them day one which usually results in another sale or company acquisition within a year. The cure? Take your business elsewhere. FCUs don't have this same reputation and generally open with less predatory rates.

USAA had a great run of building trust and is speedrunning torching it.

In a statement, USAA said the association’s data is misleading because it lacks context about why a claim may be closed without payment. Those factors could include claims that were later reopened, claims covered under separate policies or multiple claims from a single event that are consolidated into one case.

“When all factors are included, less than 6% of USAA homeowner claims were denied without payment,” USAA said. “Most claims closed without payment involve losses below a member’s deductible or claims the homeowner chooses not to pursue.”

Note that there are four different USAA insurance companies. Your military rank and how you got referred for membership will determine which one you join (listed highest/best to lowest):

United Services Automobile Association - Officers and senior NCOs

USAA Casualty Insurance Company - Enlisted (E-1 to E-7) and children of the above

USAA General Indemnity Company - National Guard, Reserve

Garrison Property and Casualty - Extended family of the above

I can't get past the article's paywall to view the 51% rate, but I expect your claim process experience will vary based on which company is insuring you.

I have noticed that the quality of service has declined over the past 5 years or so (which lines up with Peacock's being CEO). It sometimes takes 2 or 3 calls to answer a question with my policies these days, as they now have high turnover in the call center.

I live around at around a 150ft elevation above the ocean, but technically within < 1 mile away from it. Despite zero risk of flodding, half of the bigger insurers in my area have exited the market, and we are now having to insure with higher risk insurers like Kingston, who's ratings are yet to be tested during a real emergency.

My car insurance is above $4k/yr for two family cars, rising annually despite no accidents.

Meanwhile, "normal" countries are solving these problems in reasonable ways. Back home in Central Europe, you get state mandated car insurance at pre-negotiated rates that are based on the car, not the driver.

US insurance is a scam.

I hate dealing with USAA, and probably should have had a life insurance policy before I even tried. Their phone trees are designed to misdirect you, the agents do not help at all (let me transfer you...[half hour hold time]...Sorry wrong department, let me transfer you), you can't get any real information from anyone. I had to start taking down phone session ID's from the reps and asking for customer advocates to get anywhere at all. Terrible experience.

I still have their awful jingle stuck in my head played over hours of holding on the phone, I'll probably turn into a Manchurian candidate if I ever hear it again.

I thought I was a typical guy who bought insurance and hardly ever claimed. I was genuinely shocked after talking to people who regularly tried to claim all the time. "Nothing to lose right?".

After realizing I've really stopped buying insurance except a core of home, car and liability with high deductables. If you're a responsible person who is careful insurance really isn't worth the cost.

lets see how corgi holds up in a few years

So? What should be the correct rate of accepted claims? Or should companies simply accept all insurance claims?

is it easy or hard to start an insurance company? why isn't there more competition when it comes to insurance?

they've slowly gone from being one of the most progressive and customer focused financial institutions (they invented at home electronic deposit of checks) to a gross regular bank / insurance company.

You need a capital base in proportion to the policies you sell in order to pay them out without going bust, to a certain confidence level. The time sequence of premium payments vs when the risk is expected to come due for a payout is factored in.

The 50 states regulate insurance in the US and issue rules about how to do this, some of which affect competition and pricing in heavy handed ways, sometimes it's overtly political.

In general though insurance is an extremely competitive field. Margins for the most part are similar or lower than other industries.

Not sure where the popular impression that it is not competitive comes from. If anything I think the sword cuts both ways, the friction in the process is probably more a symptom of competitiveness more than its absence.

The capital requirements and regulatory barriers to start an insurer are extremely high.

Insurance companies don't invent anything, they don't control interest rates, don't risk much of their owners' money, and in many cases the state obligates people to buy your service, so in that sense it's easy.

To me, the hardest part is competing for the small number of intelligent people who are interested in such a dull, fundamentally scammy business.