Car Insurance for Military Personnel

By Jessica Bosari
After 13 years in personal and commercial insurance, Jessica Bosari now writes about personal finance, car insurance, risk management and related topics. Since 2008, she has been simplifying complex ideas through engaging articles for her readers.

Car insurance for military personnel

Statistics are the basis for car insurance rates. Companies look at how likely you are to be in a crash based on demographics and other factors. Certain groups, like teens, are riskier than others, and therefore pay more for car insurance. One of the risk factors insurers consider is occupation. And as it turns out, military personnel tend to have fewer accidents. It looks like all that discipline pays off.

Why the Military Enjoys Car Insurance Discounts

Some occupations are populated with drivers that have fewer accidents than the general population. For military personnel, it could be because much of their driving is done on military bases. They also tend to have cars left unused for months at a time while they are deployed, reducing their time on the road and therefore the chances of suffering an accident. Three car insurance companies target their offerings to the military, and may offer the greatest savings. They are: GEICO, USAA and AFI.

GEICO and Military Discounts

GEICO is an acronym for Government Employee Insurance Company. Husband and wife pair Leo and Lillian Goodwin established the insurer in 1936, during the height of the Great Depression. The Goodwins saw that marketing to those with the highest job security, namely government employees and the military, could help the business succeed. Today, GEICO offers discounts to active duty and retired military members. Members of the National Guard or Reserves may also qualify.

USAA for Military Members

USAA’s beginnings were vastly different from GEICO’s. Instead of a traditional ‘startup’ business, USAA began as a collective in 1922. A group of 25 Army officers combined to pool their automotive risks. In the same year GEICO began, USAA already boasted a membership which included 60 percent of all active military officers. Like GEICO, USAA was able to survive and flourish during the Depression. In 1961, USAA began extending membership privileges beyond active duty. By 2003, 96 percent of active-duty officers and 44 percent of enlisted personnel were USAA members. USAA’s military roots are its lifeblood, and the company works to treat them right. For example, USAA returns excess premiums to its members.

AFI for the Military

The oldest of the three, Armed Forces Insurance (AFI) began in 1887 as a means to provide military members with property and casualty insurance. Technically, the organization is an insurance cooperative known as a “reciprocal exchange”. Much like a mutual insurance company, it is policyholder-owned. USAA has a similar arrangement.

AFI has broad membership criteria making it available to the following groups:

  • Active, retired or former military members and their families
  • National Guard and Reserve members and their families
  • Civilian Department of Defense workers and retirees
  • NOAA or PHS officers, whether active, former or retired
  • Service Academy cadets, including Merchant Marine or ROTC
  • Former spouses and children of AFI members (once joined, they remain eligible for membership indefinitely)

Military Discounts Where Mandated by Law

Louisiana state law mandates a 25 percent military discount on car insurance. Watch out for companies that say they offer military discounts in “some states” (the ones where its required by law), like Progressive. The company won’t give you a full list of its discounts until you apply for a quote, and when you do, you might find that you’re out of luck.

Other Discounts Available

Military members that get insurance through GEICO, USAA or AFI can enjoy other car insurance discounts as well. Each company offers its own mix. GEICO offers a wide range of discounts, applying to policies, vehicle equipment, driving habits, driver education and military status. For example:

  • Air Bags – save up to 25 percent for side air bags and 40 percent on personal injury protection (PIP) and medical payments (MedPay) coverage for having front seat air bags.
  • Anti-Lock Brakes – save up to 5 percent on collision coverage.
  • Anti-Theft System – get up to 25 percent off your comprehensive coverage premium.
  • Daytime Running Lights – when included as standard equipment on your car, save 3 percent on some types of coverage.
  • Multi-Car – Insuring more than one car with GEICO can earn you a 25 percent discount on most types of coverage.
  • Multi-Policy – Get another discount by buying car insurance in conjunction with some other policy, like homeowners insurance.
  • Five Years Accident-Free – save as much as 26 percent on most lines of coverage.
  • Seat Belts – I’m not sure how you would prove it, but if you and your passengers religiously use seat belts, you can get 15 percent off PIP and MedPay. Cars with automatic seat belts may qualify you automatically!
  • Defensive Driving Course – Discounts depend on the state you live in and are not offered in Hawaii, Massachusetts, Michigan, North Carolina or Vermont.
  • Driver’s Education – Young drivers who complete Driver’s Education training earn discounts on many types of coverage.
  • Good Students – save up to 15 percent on some types of car insurance coverage for students between the ages of 15 to 25 (in most states). “Good grades” typically means a B (3.0) average or better.
  • Emergency Deployment – This special discount for military members offers savings up to 25 percent for deployed members of the Enduring Freedom or Iraqi Freedom operational forces. Those deployed in other “imminent-danger zones” can also qualify.
  • Affinity Groups – GEICO has over 500 affinity groups receiving discounts for membership.
  • Federal Employees – The Eagle Discount is offered to active or retired federal employees, saving up to 8 percent in most states.

USAA offers fewer discounts, but they’re good ones, including discounts similar to those offered by GEICO for:

  • Five years’ good driving
  • Defensive driving course
  • Driver’s education
  • Customer loyalty
  • Multiple policies (bundling)
  • Multiple vehicles

In addition, USAA provides discounts for family members, newer cars (3 years old or newer), low-mileage drivers and vehicles in storage. AFI provides discounts for just a few types of customers, such as accident-free drivers and those insuring multiple vehicles.

These discounts may change over time, but for now, they are great ways for military members to save on car insurance. The smart move is to get quotes from all three before you buy.