What’s Better for Car Insurance – USAA or GEICO?
Last Updated on June 6, 2021
Car insurance is a necessary expense, but you do have quite a few options to help you save money and get the most out of your premiums. Two of the best options for car insurance in the United States are USAA and GEICO. But which one is better, and can you take advantage of the savings they offer? Learn more about these two car insurance companies and how they compare.
All About USAA
The United Services Automobile Association, known as USAA, is the 5th largest auto insurance company in the United States. It is a Fortune 500 company that was founded in San Antonio, Texas in 1922.
It was founded by US Army officers who had trouble finding competitive auto insurance due to their “high-risk” nature and has since expanded to offer insurance and banking services to all present and past members of the US military as well as their families.
In addition to auto insurance, USAA also offers homeowners and renters insurance, personal umbrella insurance, roadside assistance coverage, as well as life insurance and annuities. USAA also offers full banking services.
USAA employs over 32,000 employees and serves all 50 states. USAA’s AM Best rating is A++.
All About GEICO
The Government Employees Insurance Company, known as GEICO, also has its roots with the US government. GEICO is also a Fortune 500 company and was founded in Fort Worth, Texas, although today its headquarters are in Chevy Chase, Maryland.
GEICO’s original purpose was to offer auto insurance to employees of the federal government and their families. It has since expanded to offering auto insurance to anyone, but it has stayed true to its federal government roots through offering special discounts.
GEICO is a direct-to-consumer insurance company. This means that it sells and services its policies either over the phone or online directly to its customers, without any agents.
GEICO has over 40,000 employees and serves all 50 states. GEICO’s AM Best rating is also an A++.
Target Markets
Both insurance companies were originally founded to serve some aspect of the US government, with USAA serving only members of the US military, and GEICO serving civilian employees of the federal government.
However, only USAA still operates within the US military market. To be eligible for USAA, you must be either active duty or reserve US military, a former military member, or be an immediate family member of a current or former military member.
GEICO has expanded beyond its original niche market and now is available to anyone in the country. In the past, GEICO targeted younger drivers and people who prefer to do things solely online, but in recent years they’ve made more of a push into other market segments, such as families, working professionals, and older drivers.
GEICO has also stayed true to its original niche market and offers special discounts for members of the US military and federal government employees.
Eligibility Requirements
An important thing to keep in mind with USAA is that you must be eligible to be a member before you can get a car insurance policy with them. USAA is for members of the military and their families. If you or your spouse or parent are in the military, you can qualify for USAA coverage. You can also get USAA coverage if you were previously in the military but have retired or been discharged.
GEICO does not have such membership restrictions. If you have not been in the military or you do not have family in the military, USAA won’t be an option. In that case, GEICO is one of the best car insurance companies to go through for your policy.
USAA vs. GEICO Insurance Rates
USAA has some of the best rates in the industry. They will be much cheaper on car insurance than GEICO or any other car insurance company if you look at their base rate. With discounts, you may be able to get a cheaper overall price with GEICO. As a general rule, however, those who qualify for USAA car insurance policies have the lowest premiums. For most good drivers, USAA will be a couple of hundred dollars cheaper per year, while bad drivers could pay as much as $1,000 per year more with GEICO.
Here’s how USAA and GEICO’s auto insurance premiums compare for different types of drivers:
| Group | USAA Average Annual Rates | GEICO Average Annual Rates |
|---|---|---|
| 25-Year-Old Males | $1094.44 | $1,269.18 |
| 25-Year-Old Females | $1,037.67 | $1,365.47 |
| 35-Year-Old Males | $817.91 | $1,133.91 |
| 35-Year-Old Females | $823.10 | $1,119.03 |
| 60-Year-Old Males | $767.08 | $1,067.01 |
| 60-Year-Old Females | $767.97 | $1,052.97 |
| High-Mileage Drivers | $884.69 | $1,167.93 |
| Low-Mileage Drivers | $829.27 | $1,106.54 |
| Drivers with Good Credit | $869.53 | $1,174.83 |
| Drivers with Bad Credit | $1,653.19 | $1,854.73 |
| Drivers with Clean Driving Record | $884.69 | $1,167.93 |
| Drivers with One Speeding Ticket | $1,040.78 | $1,510.16 |
| Drivers with One Accident | $1,228.98 | $1,802.17 |
| Drivers with One DUI | $1,683.36 | $2,957.84 |
| Data Source - USnews.com | ||
USAA vs. GEICO Discounts
Both USAA and GEICO have a number of discounts that help make car insurance more affordable. There are some discounts that are available with both USAA and GEICO. Both car insurance companies offer discounts for safe drivers, driver’s education such as defensive driving courses, and a good student discount. Both offer discounts for bundling coverage such as home and auto, and they both offer discounts for multi-car policies.
USAA does offer some discounts that GEICO does not. USAA offers discounts for having low mileage or based on where and how long you store your vehicle. They also offer discounts for family members, the longer you have a membership with USAA, and if you are active military. GEICO also, however, offers an active military discount.
Let’s compare the discounts offered by USAA and GEICO below.
Discount Comparison
Multi-Policy Discount: This discount is given for having both a homeowners or renters policy with the same company that has your auto. USAA offers these policies to its customers, in addition to life insurance. GEICO has a multi-policy discount as well and does offer these insurance products through its website, but they are not underwritten by GEICO. This means that the actual insurance company won’t be GEICO, although you will still get the discount. The standard multi-policy discount amount is 10-15%.
Edge: USAA
Good Student Discount: Both insurance companies offer a discount for having full-time students on your policy that have earned a B average, or a 3.0 GPA, in their last semester of school. GEICO’s discount is 15%, while USAA’s is between 10-15%.
Edge: Tie
Good Driver Discount: If you’ve managed to go the last 5 years without an accident or violation, then you’re eligible for a safe driver discount. Both GEICO and USAA look back 5 years to determine eligibility for this discount. USAA’s discount amount is between 15-20%, while GEICO’s is up to 26%.
Edge: GEICO
Customer Service: Both insurance companies have good claims and customer service. They both offer this through a 24/7 phone line, as well as having an online resource center and online capabilities. Both USAA and GEICO also have a lot of negative reviews and customer experiences, but most people have positive experiences. However, USAA prides itself on delivering exceptional customer service to its policyholders.
Edge: USAA
Unique USAA Discounts: USAA offers a few unique discounts that apply to its current military members. If you’re deployed and choose to secure your vehicle in a safe location, USAA offers a discount of up to 60%.
Also, if you garage your vehicle on a military base full-time, you can get a 15% discount on your comprehensive coverage. In California, this also applies to collision coverage.
Unique GEICO Discounts: GEICO has its own discounts for current or former US military members. In fact, if you’re on active duty, in the National Guard or Reserves, or retired from the military, you could receive a 15% discount.
If you’re part of an emergency deployment to a danger zone, you could also receive a 25% discount.
And for active or retired federal employees, GEICO offers an eagle discount of 8%.
USAA vs. GEICO Rankings
In most surveys and studies, USAA is usually found to be the best company for car insurance. GEICO often falls within the top five car insurance companies, usually around spots three or four. Both are very good car insurance companies that offer reasonable rates and discounts, as well as excellent customer service and claims.
Ease of Filing a Claim
In surveys, USAA only narrowly beat GEICO in categories of ease of filing a claim. In fact, the two companies are very similar in how easy it is to file and process a claim. Both companies work hard to provide excellent customer service and fast claims processing. With GEICO, most claims are filed online, although you can file a claim over the phone. With USAA, you may be better off filing a claim over the phone. How you prefer to file claims and do business may make a difference in whether or not you go with USAA or GEICO. USAA offers a more personalized experience with agents and phone support, while GEICO offers more self-help and online options.
USAA vs. GEICO Customer Service
USAA policyholders are typically overwhelmed with the level of customer service that they receive from the car insurance company. Customer service excellence is one reason that USAA is one of the best car insurance companies out there. They offer personalized service, individual agents, and allow you to get all of your questions and concerns addressed easily. GEICO also has excellent customer service, although wait times are usually longer, there are no individual agents, and they encourage customers to do everything online.
Overall, Which Company Is Better?
For those who are in or have been in the military and their families, USAA is usually the better choice. They offer the lowest rates, most discounts, and the best customer service. For those who cannot qualify for USAA car insurance, GEICO is a great option. GEICO is one of the best car insurance companies for good drivers, with multiple discounts available, easy online administration of your account and policy, and good customer service when you need it. Overall, you cannot go wrong with either one of these car insurance companies. It all depends on what you qualify for and your personal preferences. If you like a one on one touch, USAA is the way to go. If you prefer self-service, go for GEICO.
Final Verdict – USAA vs. GEICO
Both USAA and GEICO have millions of satisfied customers. Both offer extra discounts to members of the US military, but GEICO takes people who might not qualify for USAA.
GEICO’s rates are probably going to be less than USAA’s on average, especially for people that don’t have excellent credit. However, USAA does offer a full range of insurance and banking services that can make it a useful one-stop-shop.
For some people, USAA’s edge in customer service will be enough to keep their business. For others, GEICO’s low rates and numerous extra discounts will attract them.
In the end, it’s worth it to get auto insurance quotes from both companies, because both are excellent options for auto insurance.
