Finding the Best Car Insurance for Active Duty Military Members and Veterans

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This guide was written by Jason Van Steenwyk

Jason Van Steenwyk Jason Van Steenwyk is an experienced financial industry reporter and writer. He is a former staff reporter for Mutual Funds, and has been published in SeekingAlpha, Nasdaq.com, RealEstate.com, WealthManagement.com, Senior Market Advisor, Life and Health Pro and many other outlets over the past two decades. He is also an avid fiddle player and guitarist. He lives in Orlando, Fla.

If you are an active member of the military or a veteran, companies want your business — and with good reason. There are approximately 1.3 million active-duty military members, more than 800,000 reserve forces members and 18.8 million Armed Services veterans currently living in the U.S. and overseas. Veterans represent 7.6% of the total population. Altogether, that’s a lot of buying power.

Active duty military members, reservist and veterans could benefit from car insurance discounts, including members of different branches:

  • Army
  • Navy
  • Marine Corps
  • Air Force
  • Coast Guard

Active military members and their families have a number of unique considerations when it comes to choosing auto insurance coverage. They frequently move from state to state. They occasionally move overseas for one to three years and may be called upon to deploy to sea or combat zones.

Once service members leave active duty and become veterans, many businesses and companies offer discounts to those who have served, including car insurance companies. Still, the level of discounts can vary widely depending on the company. Review your current car insurance policy and compare those rates with other insurance companies to make sure you are getting a veteran’s discount and the best car insurance for your needs.


Car Insurance for Active Duty Military Members

active military members are engaged in a training exercise.

Members of the military have the same auto insurance coverage requirements as the general public. You’ll need to meet the minimum liability insurance requirements for your state. If you finance your car, you’ll also need to carry collision/comprehensive coverage in accordance with the terms of your financing or lease agreement.

You’ll need to show proof of insurance to get a vehicle pass or sticker to drive onto military posts.

Additionally, active military members, Guardsmen and reservists have several special insurance considerations not typically faced by the general public, including:

  • Deployments
  • Spouse and dependent considerations
  • Frequent relocations
  • PCS moves, including occasional moves overseas

Affordable Car Insurance for Military Members

While military service members and their families are free to use any auto insurance carrier, there are three that offer some of the most competitive rates and programs for military members and veterans: USAA, GEICO and Armed Forces Insurance (AFI). USAA and GEICO are nearly household names among military families. The lesser-known and smaller provider AFI has a marketing arrangement with First Command, a financial services company that caters to the military community.

Is USAA the Cheapest Car Insurance for Military Members and Veterans?

An analysis by MoneyGeek found that USAA is often priced competitively, but it is not always the lowest-priced car insurance provider for military members and veterans. If you’re price sensitive, shop around — even if you’re on active duty. MoneyGeek found that in some states, including California, Allstate, State Farm and Mercury Insurance each quoted lower minimum rates than those available from USAA.

USAA consistently has excellent customer satisfaction ratings from JD Power and Associates, and USAA’s many military-specific programs, products and services can be valuable, especially for those still on active duty.

Additionally, USAA offers a number of other discounts to members, including a discount for taking an approved drivers’ safety course. If you go five years without an at-fault accident, USAA gives you free accident forgiveness coverage. That means if you have no at-fault accidents after five years with USAA, your premiums will not go up if you do have one at-fault incident. GEICO includes a similar benefit in most states.

USAA Insurance

  • Founded in 1922
  • 13 million members
  • Offered $2.5 billion in dividends and rebates to members and policyholders in 2019
  • $219 billion under management
  • $36 billion in revenue per year
  • A++ financial stability rating (superior) from A.M. Best.

USAA is a mutual company. It's collectively owned by its members and policyholders rather than stockholders. If the company is profitable, members may receive a dividend, which could come as a credit against their premiums or as a payment. In 2017, USAA returned over $1.5 billion to members and policyholders. In 2019, USAA returned over $2.5 billion to its 13 million members. This practice reduces the overall net price of coverage for policyholders. Car insurance premiums vary considerably from carrier to carrier based on a variety of factors. No single company is the best fit for all drivers on the road — even within the military and veteran market. If you or another driver on your policy has a poor driving record, a DUI or bad credit, you may get charged a higher premium.

Depending on the state, all these factors can influence your premium:

  • Your age and sex
  • Your driving record
  • The deductible, coverage and riders you select
  • The make, model and year of your vehicle
  • Your credit score
  • Your address
  • Lapsed coverage
  • Your longevity with your carrier
  • The number of miles you drive
  • Safety features installed on your vehicle

How to Find Military Discounts on Car Insurance

The best place to start is by asking your car insurance agent or broker if military discounts are offered. In some cases, there’s no direct discount available for military and veterans, but you may qualify for an affinity discount for membership in many organizations.

You can also find discounts from online sources and sources at and near your new duty station.

Depending on your state and carrier, you may qualify for the following discounts:

  • Safe driving record
  • Safety features installed on your vehicle
  • Completion of accident avoidance/defensive driver training classes
  • Multiple vehicle discounts
  • Military and veterans discounts
  • Discounts for multiple lines of insurance with the same carrier
  • Paperless billing discount
  • Low mileage
  • Affinity discount programs
  • Good student/honor roll discounts
  • Payment in full discounts
  • E-signature discounts
  • Loyalty discounts
  • Green/hybrid car discounts
  • Good credit discount

Not all carriers will offer all these discounts in all cases. That’s why it’s important to shop around and ask your agent.

Military Discounts by Auto Insurance Provider
Insurance Provider Discounts Offered
USAA Discounts up to 60% when deployed and car is placed in storage in a secure location (Except in HI, NC and VA).

Discounts up to 15% or cars garaged on military installations (except in NY).
Geico Up to 15% discount for active duty, guard and reserve members and retirees.
Progressive No official military or veterans discount, though Progressive has a continuous coverage discount, which you won’t lose if your coverage lapses because of deployment.
Allstate Allstate doesn't offer military or veterans discounts directly. Still, it was among the first carriers to protect deployed service member customers from losing their continuous coverage discounts solely because of deployment.
Liberty Mutual Offers a military discount.
Esurance Varies. Military service members can cancel and reinstate coverage with no fees.

Insuring Your Car in Another State

Insurance premiums can vary substantially depending on location, so you’ll need to update your coverage every time you move to another state. Coverage requirements vary from state to state as well. You may have to adjust your liability coverage to conform to state minimums.

“Don’t assume that your current carrier is going to be the best deal in the new state,” advises Douglas Heller, an insurance industry expert with the Consumer Federation of America. “You should shop around. You should shop around every couple of years anyway.”

Military Car Insurance for a Temporary Move

If you’re just driving your car to another state for a temporary duty (TDY) trip and not changing your permanent duty station or home of record, then you typically don’t need to make changes to your car insurance. Some states have special provisions for military members who want to keep the coverage in place from their home of record.

Military Car Insurance for a Long-Term Move

a service member prepares for deployment as he hugs his wife and son

If you’re doing a permanent change of station (PCS) move to another state, you will need to change your insurance to conform to the laws in the new state. At a minimum, you will need to ensure you carry your state’s minimum required liability insurance on your car.

“Make every effort you can to maintain seamless coverage,” advises Heller. California has protections against charging extra for a lapse in coverage. But maintaining seamless coverage will help you avoid the “break-in-coverage penalty.” Many people will transfer to a new state, and say, “well, it’s going to be a week or so until I’m set up and driving again in the new state, so I’ll just get coverage then,” but that mistake can cost you hundreds of dollars.” Heller warns.

One other tip for interstate moves: When you cancel your old policy, ask your carrier or agent for a refund of unearned premium. This is the portion of your premium payments the insurance company received but didn’t earn. For example, if you bought a six-month policy from your insurance company and paid a six-month premium in advance, and you move after two months and need to cancel the policy, your insurance company should refund you four month’s worth of premiums.


Car Insurance During an Overseas Deployment

Prior to an overseas deployment or an extended period of sea duty, you have some choices to make regarding what to do with your vehicle if you want to keep it for when you return:

  • You can place your vehicle in storage while you’re gone
  • You can leave your car with family members who will be driving it
  • You can bring your car with you (to certain OCONUS duty stations)
  • You can garage the car with a friend or family member

Place Your Vehicle in Storage

A man moves his belonging into storage as he plans to be deployed by the military

If you’re single or none of your dependents drive, you may want to place your vehicle in storage while you are deployed.

Before you leave, ask your current carrier about your options. You could cancel your coverage altogether, but some carriers will penalize you for any lapses in coverage. They often charge you a higher rate if you have not maintained continuous coverage. This penalty can cost you hundreds of dollars over your policy term.

“It’s important to send a letter to your carrier or agent explaining why you are canceling your insurance coverage,” says Heller. “When you return, ask for an exception to any price increase normally imposed for a break in coverage.”

Suspend Your Policy

a man uses his smartphone while also on the computer

Ask your carrier if, rather than canceling, you can "suspend" your policy. You may be able to pay a significantly reduced rate, but you would still be covered if your vehicle was damaged or destroyed while in storage.

Generally, suspending your policy is preferable to canceling your coverage altogether, since it avoids break-in-coverage penalties.

You can get coverage from any carrier, of course. Still, USAA, GEICO and Armed Forces Insurance are likely to have the most institutional experience specifically with deployment and PCS-related issues.

Leave Your Car With Family

an unseen man is shown handing keys to a woman sitting in a car.

You can leave your car with your spouse or another family member to drive while you’re gone.

If you want to take this course of action, it may make sense to remove yourself (or your deployed family member, if other than yourself) from your policy. This course of action has three advantages:

  • It lowers your premium (compared to keeping you on it)
  • Your family members or other authorized individuals can still use the car
  • It avoids lapsed coverage penalties

If you anticipate a significant reduction in the number of miles driven while your family member is deployed, tell your carrier — you may get a discount as a result.

Be sure to add your deployed family member back on the plan if he or she comes back on leave, or when your deployed service member returns from deployment, advises Heller.

Bringing Your Car With You

If you're doing a PCS overseas, you may be able to bring your vehicle with you. It's not much of an option if you're going to Afghanistan or doing six months at sea on a submarine, but it may be an option if you're making a PCS move to someplace like Germany or Italy.

Here are some essential insurance considerations to keep in mind if you plan on having your vehicle shipped to your new duty station.

Shipping Your Privately Owned Vehicle (POV)

a cargo ship is in the foreground surrounded by cars being prepared for shipment

If you’re driving your POV to the new duty station, you don’t have to worry about shipping damage. If you have an accident or other claim along the way, you just file your claim through your regular auto insurance carrier.

However, if you're using a military relocation services provider to ship your vehicle, take several photographs to document your vehicle's current condition. You'll do a joint inspection with an agent from the shipper when you drop off your car, and you'll sign a DD788 inspection form at that time. Also, notify your current auto insurance carrier that you're transporting your vehicle.

You should have insurance already in force when you pick up your POV at the vehicle processing center near your new duty station. If your vehicle has been damaged during transportation, you'll have photos to document your claim.

If your car was shipped via an official military relocation service provider and is damaged en route, you have three options:

  1. Pursue your claim on-site at the Vehicle Processing Center closest to your new duty station. The VPC staff will use a standard repair guide (Autodex) to calculate the number of staff hours required to repair your vehicle and multiply it by an estimated local labor rate. They may cut you a check on the spot to get your car repaired.
  2. File a claim with the International Auto Logistics (IAL) claims office at 855-389-9499.
  3. Go to the Military Claims Office to file a loss and damage report and subsequent claim.

The military will only transport one vehicle at government expense. If you want to move additional cars to your new duty station, you'll need to have them transported at your expense and line up your own insurance. You should contact your carrier about insurance options and coverage while your vehicle is being shipped.

You should also speak to the company shipping your POV and verify the insurance they carry themselves. Are their limits sufficient to replace your car if it’s totaled en route? Can you purchase additional coverage?

You may be able to rely on your regular insurance carrier for coverage. Getting coverage via your shipper or using a marine insurance policy may help you avoid having to pay a deductible in the event your vehicle is damaged or destroyed during shipping.

Dropping Coverage While Deployed: What to Do With an Unregistered, Uninsured Car

unregistered, uninsured cars are covered up and kept in storage

If you’re deployed and don’t plan on anyone using your car, cancelling coverage altogether could be a wise option.

However, cars can and do get damaged or destroyed while they're in storage. If you're putting your car in storage or garaging it somewhere during your deployment, you may still want to retain comprehensive coverage. This may help protect you in such events as a fire where you're storing your car, a vehicle break-in or theft, flood damage or hail damage.

However, cars can and do get damaged or destroyed while they're in storage. If you're putting your car in storage or garaging it somewhere during your deployment, you may still want to retain comprehensive coverage. This may help protect you in such events as a fire where you're storing your car, a vehicle break-in or theft, flood damage or hail damage.

Your carrier may ask you for a letter from your commanding officer or other unit representative verifying that you are not expected to be driving a civilian vehicle in the U.S. during your deployment.

Reinstating Insurance After a Deployment

a military person's hands and arms are seen as they use their smartphone

When you return from your deployment or an "outside the contiguous United States" (OCONUS) move that takes you away from your vehicle for an extended period, you should put insurance in place before you pick up your vehicle.

If you're returning to a state other than where you left your POV, you may want to take out a policy reflecting your home of record.

If your vehicle is at an official military vehicle processing center, you’ll have to show proof of insurance to pick it up and when you renew your car registration if they expired while your vehicle was in storage.

If your vehicle is garaged at a civilian storage facility or with a friend, you probably won’t need to show insurance. But you should still ensure your coverage is in place before you pick up your vehicle to protect yourself and those sharing the road with you.

Beware the “Patriot Penalty”

The "patriot penalty" is over and above any rate increases attributable to a lapse in coverage. Carriers frequently charge a higher rate to customers reinstating coverage after a lapse.

At least one company has a history of charging service members returning from a deployment more than they charge identical applicants not returning from deployments.

“It is absolutely outrageous and unacceptable to allow any insurer to charge a higher premium to members of the military solely because they didn’t maintain insurance coverage when they were sent abroad to serve,” Heller wrote in a letter to insurance commissioners on behalf of the Consumer Federation of America. “This penalty for service is revolting and should be barred without delay.”


Car Insurance for Veterans

a young man who was just involved in a fender bender calls his car insurance company

Some car insurance carriers will offer a discount for being a veteran. However, there are lots of different factors that go into car insurance pricing, and different companies assess and price risk in different ways.

Both USAA and GEICO court the military and veteran market. GEICO advertises veteran's discounts of up to 15% compared to rates available to non-veterans. Other companies may not offer a direct veterans' discount but have arranged affinity discounts for members of veterans' organizations like Veterans of Foreign Wars, the American Legion or the Reserve Officers Association.

Once you're out of the military and not going through PCS moves and deployments, the additional military-specific services that a company like USAA provides become less important. You can find coverage anywhere, and you may not need a military-focused insurance provider.

Rather than focusing on which company offers a discount specifically for veterans, It's better to find the best deal overall. A carrier could offer a small veteran's discount or no discount at all and still be a much better deal for you when you compare quotes.


Claims Experience

When it comes to car insurance, claims experience is the acid test. Hopefully, you'll never need to file a claim. Still, if and when you do need to file a claim, your policy should be with an insurance company that stands by its promises to settle your claim quickly and fairly, up to the limits of the policy. Overall reviews are essential as well. What are other people saying about their claims experiences?

According to the 2019 J.D. Power Auto Claims Satisfaction Survey, GEICO ranks highly among insurance carriers overall when it comes to claims experience. Geico ranks fourth in the survey, behind Amica Mutual, COUNTRY Financial and Erie Insurance.

Because USAA and AFI do not service the general public, J.D. Power does not include them in its ratings; however, they do say that USAA would have ranked at the very top, had it been included. Both companies rank highly among service members. Whether you choose an insurance company that caters to military members or one that serves the general public, you’ll be glad you choose a company with good reviews when it comes time to file a claim.


Finding the Best Military Car Insurance

an insurance agent discusses insurance options with a military veteran

As a military member or veteran, you don’t necessarily need to use one of the insurance carriers specifically courting the military market — especially if you’re a veteran. When shopping for auto insurance, it’s a good idea to consider all your options:

  • Get a quote from several different carriers in your market.
  • Be sure to consider all factors, including available discounts.
  • Consider bundling multiple policies with the same carrier to maximize your savings.
  • Take dividends and other benefits of mutual insurance companies into account.

Jason Van Steenwyk is an experienced financial industry reporter and writer. He is a former staff reporter for Mutual Funds, and has been published in SeekingAlpha, Nasdaq.com, RealEstate.com, WealthManagement.com, Senior Market Advisor, Life and Health Pro and many other outlets over the past two decades. He is also an avid fiddle player and guitarist. He lives in Orlando, Fla.

Sources

A.M. Best. “A.M. Best Revises Outlooks to ‘Negative’ for Armed Forces Insurance Exchange.” July 24, 2019. Accessed March 12, 2020.

A.M. Best. “AM Best Affirms Credit Ratings of United Services Automobile Association, Its Subsidiaries and USAA Capital Corporation.” February 28, 2020. Accessed March 12, 2020.

A.M. Best. “AM Best Affirms Credit Ratings of Members of GEICO, GEICO Corporation and Its Affiliate.” September 13, 2019. Accessed March 12, 2020.

Department of Defense. “Armed Forces Strength Figures, February 2020.” Accessed April 9, 2020.

Department of Defense. “Defense Transportation Regulation Part IV — Personal Property. Attachment K3 — Shipping Your POV.” February 12, 2020. Accessed March 9th, 2020.

J.D. Power. “2019 Auto Insurance Claims Satisfaction Survey.” October 24th, 2019. Accessed March 12th, 2020.

USAA. “Key Facts.” December 31, 2019. Accessed March 11, 2020.