USAA class action claims insurer overcharges for collision coverage

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USAA class action lawsuit overview:

• Who: Plaintiff Paul Petery has filed a class action lawsuit against USAA Casualty Insurance Co.
• Why: USAA allegedly overcharges policyholders for collision coverage for vehicles with reconstructed titles.
• Where: The USAA class action lawsuit was filed in Pennsylvania federal court.

USAA Casualty Insurance Co. overcharges some vehicle owners for collision coverage, according to an amended class action lawsuit filed April 11 in Pennsylvania federal court.

Plaintiff Paul Petery alleges the insurer charges the same premium for comprehensive and collision coverage for vehicles with a reconstructed title as it does for vehicles with a regular title, but with less coverage benefits for a total loss.

Petery says he owned a 2004 Acura TL insured with USAA coverage that was deemed a total loss following a traffic collision in January 2020. Petery opted to have the vehicle fully repaired and obtained a reconstructed title for the vehicle, the class action lawsuit says.

A USAA representative informed Petery the reconstructed title would not affect the value of the vehicle or payments made by USAA in the event of a total loss, according to the plaintiff.

USAA class action says insurer reaps windfall by overcharging for coverage it won’t provide

Petery continued to pay premiums for comprehensive and collision USAA coverage for the vehicle in the same amount with the reconstructed title as he would have paid for coverage with a regular title, the USAA class action lawsuit says.

In September 2020, the vehicle was rear-ended and a USAA estimator reportedly determined it was a total loss.

“Despite its prior representations that the reconstructed title would not affect the coverage benefit, USAA determined that the value of the vehicle was less since it had a reconstructed title,” the USAA coverage class action lawsuit says.

As a result, Petery says, he received a lesser coverage benefit because his vehicle had a reconstructed title even though he was paying the same premium he would have paid if the vehicle had a regular title.

“USAA is thus reaping a windfall by charging a premium for coverage for a total loss which it will never provide,” Petery alleges.

The class action lawsuit seeks returns of premiums paid for comprehensive and collision coverage for vehicles with reconstructed titles. 

Last year, USAA settled a class action lawsuit alleging it failed to include sales tax in total loss payments to policyholders in Ohio.

Do you have USAA insurance for your vehicle? Tell us what you think of the class action lawsuit in the comments.

Petery represented by James C. Haggerty of Haggerty Goldberg Schleifer & Kupersmith PC, Scott B. Cooper of Schmidt Kramer PC, Jonathan Shub of Shub Law Firm and John P. Goodrich of Jack Goodrich & Associates.

The USAA coverage class action lawsuit is Paul Petery, et al. v. USAA Casualty Insurance Co., Case No. 5:23-cv-00604-JLS, in the U.S. District Court for the Eastern District of Pennsylvania.

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