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United Services Automobile Association (USAA) charges enlisted service members at higher rates for vehicle coverage than their higher ranking officers, two California veterans claim.
The lead plaintiffs, Eileen-Gayle Coleman and Robert Castro, are taking legal action against USAA in a new class action lawsuit over unfairly priced auto policies.
These differences in rates are being charged by USAA despite the plaintiffs holding a “good driver” status.
Coleman and Castro say USAA is offering non-ranking service members the 20 percent discount for having a good driving history, as required by California law, but are funneling non-officers to a “substandard” insurance product, according to the complaint.
USAA offers two insurance products, according to the complaint: USAA General Indemnity Company (USAA-GIC) and United Services. Castro and Coleman allege USAA-GIC is priced at higher rates and a United Services plan is only available to officers.
“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 complaint stated.
USAA doesn’t mention this to service members signing up for coverage, according to the complaint. Policyholders are never told enlisted status is a factor taken into consideration when quoting rates on policies.
Coleman and Castro argue these differences are significant. Policyholders in California who weren’t officers paid nearly 75 percent more than officers with similar driving records last year on their premiums, according to the complaint.
The premium difference between officers and enlisted policyholders in 2017 was 57 percent.
By not being open about these rate differences, USAA is breaking California laws regulating insurers and business practices, the complaint claims.
Formally the class action lawsuit alleges violations of California’s Insurance Code and Unfair Practices Act, in addition to the federal Military and Veterans Code.
Castro and Coleman are seeking to represent thousands of potential class members who serve or served in the military who hold the policies they’re suing over.
“No legitimate business interest justifies USAA’s discrimination against enlisted men and women,” the lawsuit states.
Are you a member of the armed services with a USAA car insurance policy? What do you think of the claims officers are getting better rates? Let us know in the comments below.
Counsel representing the plaintiffs in this class action lawsuit are Harvey Rosenfield, Benjamin Powell of Consumer Watchdog; Jay Angoff, Cyrus Mehri, Desiree Langley of Mehri & Skalet PLLC; Gary Mason and Danielle Perry of Mason Lietz & Klinger LLP.
The Military Car Insurance Class Action Lawsuit is Coleman et al. v. USAA et al., Case No. 3:21-cv-00217, in the U.S. District Court for the Southern District of California.
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36 thoughts onUSAA Auto Insurance Charges Non-Officers More, Veterans Say
USAA is one of the worse nightmares I ever joined thinking better deals and they looked out for us military and Veteran’s. When I had a huge issue with this bank, I googled USAA, wow the class actions, and federal violations with huge fines. I’d stop being comfortable and move, this bank has changed big time!
Reading before and looking at own coverage. There is is USAA, USAA:CIC and USAA:GIC. Where gic is for worst drivers and CIC for enlisted as I was on CIC, once obtaining senior enlisted ranks I’m no longer on CIC and get dividends. I however haven’t resided in CA.