California Judge Approves Class-Action Status for USAA Lawsuit: Allegations of Price Discrimination Against Enlisted Service Members

Los Angeles, California – A federal judge in San Diego has granted class-action status to a lawsuit filed against USAA, a leading insurance company. The lawsuit, filed by enlisted service members Eileen-Gayle Coleman and Robert Castro, alleges that USAA practices differential treatment towards military officers and enlistees, favoring the former by directing enlisted personnel towards insurance policies with higher premiums. The lawsuit also questions whether USAA intentionally guides customers towards policies that deny them the lowest available premiums.

Coleman, a Marine Corps radio operator, and Castro, an Army culinary specialist, argue that USAA’s pricing of automobile insurance and deceptive business practices disproportionately harm enlisted personnel in favor of officers. The lawsuit, which was filed in 2021, has now been granted class-action status by Judge Robert S. Huie, allowing the case to proceed.

USAA, which claims to “respect and honor the men and women in our nation’s military and their families who support them,” is facing allegations of preferential treatment towards officers over enlisted personnel. Lawyers representing the company argued against the certification of the case as a class-action and suggested that the California Department of Insurance should handle the dispute.

The court will now determine whether USAA consistently applied “good driver” discounts to both enlisted personnel and officers. If found guilty, the insurance company may have to compensate approximately 200,000 policyholders in California who could be part of the represented class.

A USAA spokesperson stated that their practices are aligned with California law and that regulatory approval is obtained for their rates. The company remains committed to providing competitive products and exceptional service to the military community.

This class-action lawsuit against USAA highlights the challenges faced by enlisted service members and raises questions about fairness and equal treatment within the insurance industry. The court’s ruling marks a significant step forward for the plaintiffs in their quest for justice and may have far-reaching implications for the insurance industry as a whole.