At a time when it feels like every news story is about how your costs are getting higher, USAA is bringing a little bit of financial relief to some of its car insurance customers in Florida. This week, the company announced a combination of rate cuts and direct dividend payments to eligible members that would total nearly $1 billion in savings.
The news comes just months after State Farm announced a similar dividend payout for its customers. So some drivers have been seeing at least a little relief even as soaring gas prices strain their wallets.
But which drivers are going to see discounts? Which ones will get a check in the mail? And how much savings can each person expect? Here’s what we know so far.
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Why is USAA giving out refund checks and rate cuts?
With this week’s news, consumers see yet another example of why USAA is consistently named the favorite car insurance company in Kiplinger’s annual Readers’ Choice Awards. The popular car insurance provider that caters exclusively to military members and their families noted that recent policy reforms in Florida surrounding personal injury lawsuits have led to significant savings for the company.
In turn, USAA is passing some of those savings on to its members in Florida.
“Florida’s civil litigation and tort reforms have curbed legal system abuse, helping reduce the legal costs that were a significant driver of premium increases, enabling USAA to pass meaningful savings directly to members,” the company said in a press release.
The company noted that other states, including Georgia, Louisiana and New York, are also looking at reforming their legal systems. As more states crack down on legal system abuse, USAA might enjoy additional cost reductions in other states. Whether or not they’ll pass some of those savings onto drivers in those states remains to be seen.
How much will Florida drivers get from USAA?
The exact amount of your dividend check will depend on various factors not yet disclosed by USAA. But the insurer did say in its press release that the average payment will be about $760 per USAA member, with as much as 25% of those eligible for a dividend payment getting over $1,000.
That’s significantly higher than the State Farm refund checks that were announced in March. But since this payout is limited to USAA members in Florida, fewer members overall are going to see a check.
Those dividend payments are in addition to discounts that USAA says about half of Florida auto policyholders will get. The company has dropped rates in the state by about 14% on average over the last six months.
While USAA already tends to be favored for its competitive rates, it’s always worth shopping for car insurance ahead of every renewal. Getting additional quotes ensures you’re always getting the best possible rate for the coverage you need. So, if your policy is about to renew, use this car insurance tool, powered by Bankrate, to find your best rates today:
When will USAA refund checks go out?
According to the press release, USAA dividend checks will begin going out to customers on June 15. It’s not clear how long it will take for every eligible member to receive their check. But, if you’re curious to find out whether you’re getting a check and when you can expect it, reach out to USAA directly to find out.
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.