California judge grants class-action status to USAA lawsuit


California judge grants class-action status to USAA lawsuit | Insurance Business America

Enlisted service members challenge insurer’s pricing, citing preference towards officers

Insurance News

Mika Pangilinan

A lawsuit accusing USAA of differential treatment towards military officers and enlistees has been granted class-action status by a federal judge in San Diego, California.

The lawsuit was filed in 2021 by enlisted service members Eileen-Gayle Coleman and Robert Castro, who alleged that USAA directed them towards insurance policies with higher premiums compared to those offered to military officers.

Coleman, a Marine Corps radio operator, and Castro, an Army culinary specialist, contended that USAA’s pricing of automobile insurance policies and deceptive business practices favor officers over enlisted personnel.

The suit also questioned whether USAA intentionally guided customers toward policies that potentially denied them the lowest premiums available under “good driver” discounts.

“[USAA] claims to ‘respect and honor the men and women in our nation’s military and their families who support them.’ But as shown by its pricing of automobile insurance policies and its deceptive business practices, USAA respects and honors current and former military officers more than it does current and former enlisted personnel,” the initial complaint stated.

Lawyers representing the insurer argued in court that the California Department of Insurance should handle the dispute and opposed the certification of the case as a class-action.

However, the recent ruling by Judge Robert S. Huie has granted class-action status to the lawsuit, allowing the case to proceed.

With the lawsuit now proceeding as a class-action case, the court will determine whether USAA consistently applied “good driver” discounts to both enlisted personnel and officers.

A spokesperson for the company told the San Diego Union Tribune that their practices align with California law, emphasizing that regulatory approval is obtained for their rates.

“We remain committed to providing competitive products and exceptional service to the military community,” the spokesperson added.

USAA has approximately 200,000 policyholders in California who could be part of the represented class.

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