USAA Class Action Alleges Insurance Association Unfairly Profited From Pandemic

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

USAA Pandemic Insurance Class Action Lawsuit Overview:

• Who: A car insurance customer is suing his provider, the United Services Automobile Association (USAA).
• Why: The customer says the company unfairly profited from the pandemic by charging customers high car insurance premiums despite the fact that people were not driving as much.
• Where: The USAA pandemic insurance lawsuit was filed in a California federal court.

United Services Automobile Association (USAA) unfairly profited from the pandemic by overcharging customers for auto insurance, a new class action lawsuit alleges.

Plaintiff Philip Johnson filed the class action complaint against USAA, USAA Casualty Insurance Group, USAA General Indemnity Company and Garrison Property and Casualty Insurance Company Group Apr. 14 in a California federal court, alleging violations of contract law and state professional codes.

According to his complaint, auto insurers like USAA have scored a windfall during the pandemic, while many others suffered. Despite a “dramatic reduction in driving” and driving-related accidents due to social distancing and stay-at-home measures, premiums have not been significantly reduced, Johnson alleges.

“This decrease in driving and accidents has significantly reduced the number of claims that auto insurers like USAA have paid, resulting in a drastic and unfair increase in USAA’s profits at the expense of its customers,” he alleges.

Insurer Did Not Refund Customers Enough, USAA Class Action Lawsuit Alleges

According to the USAA class action lawsuit, one published report calculates that at least a 30% average refund of paid premiums would be required to make up for the excess amounts paid by consumers for just the period between mid-March and the end of April of 2020.

“Despite full knowledge of these facts, USAA continued to charge and collect excessive premiums throughout 2020 and 2021 and has failed to issue adequate refunds,” Johnson states. 

He says USAA’s dividend and premium credit program was inadequate to compensate its customers for overpayments resulting from COVID-19. 

The program applied only a 20% dividend to policyholders spanning three months starting in March 2020, the class action states.

And although USAA reports that it offered an additional dividend and smaller premium credits later in 2020 and 2021, these amounts were still insufficient, Johnson alleges.

Johnson is looking to represent all California residents who purchased personal automobile insurance from USAA from March 1, 2020, to now.

He’s seeking disgorgement of the “ill-gotten gains”obtained by USAA, all available damages, punitive damages, declaratory and injunctive relief, fees, costs and a jury trial.

Johnson is suing for breach of contract, unjust enrichment and violation of the California Business and Professions Code.

The news comes after USAA agreed in 2021 to a $90 million class action settlement resolving complaints about the company’s Universal Life policies.

Do you think you were overcharged for auto insurance during the pandemic? Let us know in the comments! 

The plaintiff is represented by Manfred Muecke of Manfred, APC and Matthew H. Morgan, 

Robert L. Schug and Chloe A. Raimey of Kichols Kaster, PLLP.The USAA Insurance Premiums Class Action Lawsuit is Philip Johnson v. United Services Automobile Association, et al., Case No. 3:22-cv-00518-TWR-JLB, in the U.S. District Court Southern District of California.

Read About More Class Action Lawsuits & Class Action Settlements:

• Toyota Recalls 460K Vehicles for Stability Control Glitch
• GM Class Action Alleges Automaker Fails To Disclose Engine-Related Defect
• GM Class Action Claims Transmission Defect Causes Jerking, Lurching in Lower Gears
• GM Recalls Around 680K 2014-15 Chevrolet Equinox, GMC Terrain Vehicles Over Windshield Wiper Defect