Most of us have seen the commercials for USAA. They are especially popular during football season. Last year, one of their commercials prominently featured repeat Super Bowl champion Rob Gronkowski calling in to try to obtain insurance and being told that he does not qualify because he is not an active-duty military member or a veteran.
The implication is that because USAA is exclusive to active and retired military members and their families, their customers receive premium coverage at the most affordable rates with benefits that no one else can get – even star athletes. But is all of this really true? Unfortunately, their track record would suggest otherwise.
Those who have never had to file a claim with USAA might say that they love their insurer, as is often the case for policyholders and other insurance carriers who have never needed to rely on their coverage. But many of those who have needed USAA during a time of great need tell an entirely different story.
Bad Faith Insurance Practices by USAA
Like all insurance carriers, USAA has an obligation to honor the terms and conditions of the policies that it issues. This means, among other things, paying policyholders damages when they are owed, and processing claims in a fair and impartial manner.
USAA’s bad faith practices go back several years. Here are a couple of the most egregious examples:
Public Admission of Cost Shifting to Taxpayers
In 2009, USAA publicly admitted that it shifted its own costs to the federal government’s National Flood Insurance Program (NFIP) and thus the taxpayers. This occurred in oral arguments before the Mississippi Supreme Court in a case involving both wind and water damage to a property from Hurricane Katrina.
During that storm, the Mississippi Gulf Coast sustained up to four hours of damage from the hurricane-force winds before any of the flooding began. But USAA requested that the court not require them to pay for any of the wind-induced damage because the property also sustained water damage.
In other words, USAA wanted to resolve the question of how each of the two perils (wind and water) contributed to the property damage in their favor by sticking the NFIP and us taxpayers with the entire bill. Understandably, this prompted outrage on the part of lawmakers who took subsequent actions to more clearly define what damages the NFIP would be responsible for and what damages would be paid by private insurance carriers when storm damage occurred from both flooding (which is covered by the federal government) and other perils (which should be covered by the insurer).
Guilty Verdict in Bad Faith Claims Lawsuit in Texas
In 2013, a jury found USAA guilty of deceptive and unfair claims practices in a Texas lawsuit brought by homeowners Joseph and JoAnn Hayes. The court found, among other things, that USAA failed to comply with the terms of the insurance policy with respect to the claim of damage to the roof, garage door, and other exterior damage.
The court further found that USAA engaged in these deceptive and unfair claims practices “knowingly” and awarded the homeowners $30,000 in additional damages over and above what they were owed for the claim. They were also ordered to pay the Hayes’ legal fees.
These two cases are just the tip of the iceberg. USAA members have filed more than 100 reports of bad faith practices and other questionable and unlawful activities on the consumer watchdog website Ripoff Report. Here is a sampling of what some of their customers have had to say:
USAA Insurance fraud. Taking my money and not providing the coverage I paid for. I did my part and paid my fees on time. They did nothing.
USAA Insurance claim denial – Vague contract.
USAA United services automobile association Ripped me off..lied repeatedly and never tells the truth…
USAA- Filed a homeowners claim after discovering hurricane damages and the adjustor refused to contact me for additional information. The claim was filed in September 2020 and the home is still damaged from the hurricane.
USAA did not refund most of my cost for excess (=valueless duplicative insurance that will not be paid out in a loss).
Trust Reeves & Mestayer to Handle Your Mississippi USAA Bad Faith Insurance Claim
When an insurance company acts in bad faith and engages in deceptive and unfair business practices, it directly harms the consumers who trust these insurers to fulfill their duty to act honorably. This is especially egregious when it comes to USAA, because they are supposed to be serving those who have put their lives on the line to serve our nation.
If you are a USAA customer and you have been treated unfairly, Reeves & Mestayer is here to help! Our attorneys have extensive experience with bad-faith insurance claims, and we will fight hard to get you the full and fair compensation you deserve. Call our office at 228-300-2754 or send us an online message to schedule a free consultation with a member of our legal team.
USAA Loses Hurricane Bad Faith Trial in Texas (pdf)
The Voter’s Self Defense System – Vote Smart (pdf)