Lawsuits Against USAA Homeowners Insurance: Allegations and Outcomes

As one of the largest insurance providers in the United States, USAA has faced its share of legal challenges and lawsuits over the years. This includes litigation related to its homeowners insurance policies and claims handling practices.

In this comprehensive overview, we’ll examine notable lawsuits brought against USAA homeowners insurance, looking at the allegations claimed, how USAA responded, and the ultimate case outcomes.

Overview of Lawsuits Against USAA Home Insurance

USAA has had homeowners insurance lawsuits filed against it on both individual and class action bases. The types of allegations made have included:

• Wrongfully denying claims and coverage

• Using biased or corrupt investigations

• Delaying claims payments in bad faith

• Misrepresenting policy terms

• Breaching contract provisions

USAA defends itself vigorously against these lawsuits. Many cases are dismissed or settled out of court. When cases do go to trial, results have been mixed for plaintiffs.

Below we’ll look at some specific examples of recent noteworthy lawsuits against USAA homeowners insurance and their resolutions.

Anderson v. USAA Casualty Insurance (2008)

In this 2008 case filed in California, the plaintiffs alleged USAA wrongfully denied their claim for cracking damage to the floors and walls of their home.

Allegations:

• USAA breached the insurance contract by denying coverage

• USAA conducted a biased investigation using a preferred expert

• Claim denied in bad faith

USAA’s Response:

• Damage was excluded based on earth movement and faulty construction causes

• Claim decision relied on reports from independent engineering experts

• No evidence of biased investigation or bad faith

Outcome:

• Court dismissed the bad faith and punitive damages claims
• Breach of contract claim survived summary judgment due to disputes over cause of loss
• Case ultimately settled out of court

This case shows an example of USAA homeowners being allowed to move forward to trial with a wrongful denial claim, even when bad faith allegations were dismissed.

Hicks v. USAA (2020)

This recent federal class action lawsuit alleged USAA engaged in a pattern of unfair claim delays and underpayment.

Allegations:

• USAA routinely delayed claims and failed to pay policy limits

• Breached Kentucky state claims payment laws

• Systematically underpaid and delayed claims in bad faith

USAA’s Response:

• Plaintiff’s claims paid appropriately based on adjusting process

• No evidence of systemic delays or underpayments

Outcome:

• USAA’s motion to dismiss granted; class action claims dismissed
• Case not allowed to proceed as a class action

This case reveals an example of USAA getting class action claims dismissed early before the case advanced too far.

Hicks v. USAA (2021)

After the initial class action case was dismissed, the plaintiff in Hicks v. USAA brought an individual follow-on lawsuit alleging:

Allegations:

• USAA failed to sufficiently investigate his claim

• Wrongfully denied full coverage of his roof replacement

• Breached Kentucky state claims law and duty of good faith

USAA’s Response:

• Conducted reasonable investigation into roof damage cause

• Paid all covered damage under the policy

• Plaintiff unable to prove breach or bad faith

Outcome:

• USAA won on summary judgment motion
• Court dismissed all claims finding no contractual breach or bad faith

This follow-up individual case provides an example of USAA obtaining a complete defense win on homeowners insurance claims.

Outcomes and Common Themes

Looking across these examples and other USAA homeowners lawsuits reveals some common themes:

• Plaintiffs often allege improper investigations, delays, and wrongful denials by USAA

• USAA is aggressive in defending against the lawsuits and seeking early dismissals

• Bad faith claims are frequently dismissed even when contract claims survive

• Individual cases reaching trial often result in defense verdicts for USAA

While some cases settle, USAA doesn’t hesitate to take lawsuits to trial when needed. Their legal team diligently disputes allegations of misconduct in claims handling.

USAA’s Response to Lawsuits

USAA has stated that while no insurer is completely immune from lawsuits, they have processes to ensure claims are handled properly. Steps USAA takes include:

• Utilizing well-qualified claim adjusters who receive ongoing training

• Employing experts like engineers and contractors to provide impartial damage assessments

• Having managers and legal counsel review claim decisions for accuracy

• Leveraging litigation experience from in-house counsel

Additionally, USAA states that lawsuits often arise from misunderstandings about complex policy terms and exclusions. They assert lawsuits represent a small fraction of their total claims.

Should You Sue Your Insurance Company?

If you believe USAA has improperly denied your homeowners claim, first make a formal written complaint detailing why you think the denial was unwarranted. Sometimes claims get reconsidered and resolved at this stage.

If your dispute remains unresolved, consult an attorney experienced in bad faith insurance cases to review your policy and claim events. They can assess the merits of potential legal action. Keep in mind that lawsuits can be prolonged and costly with uncertain outcomes.

Thoroughly documenting your claim interactions, obtaining expert assessments, and adhering to your policy terms will strengthen your case if a lawsuit ultimately is deemed viable. This can help dispute an insurer’s claims of proper claim handling.

The Bottom Line

With millions of policies in place, USAA will continue facing homeowners insurance lawsuits around topics like unfair claims handling and bad faith. The outcomes vary case-by-case, with settlement, dismissal, and defense verdicts all common results. Lawsuits remain one option of last resort for disputing a claim denial, though careful evaluation of merits and risks is required.