Federal Judge Grants Class-Action Status to Lawsuit Accusing USAA Insurance of Discrimination Against Enlisted Service Members

SAN DIEGO (AP) — A federal judge in San Diego has granted class-action status to a lawsuit accusing USAA insurance of discriminatory pricing practices. The lawsuit, filed by two enlisted service members, alleges that USAA steered them into more expensive policies compared to those offered to officers. The judge’s ruling means that the case will proceed as a class-action, potentially impacting up to 200,000 policyholders in California who could be members of the represented class.

The two enlisted plaintiffs, Eileen-Gayle Coleman, a Marine Corps radio operator, and Robert Castro, an Army culinary specialist, claim that USAA charged them higher premiums for insurance policies compared to military officers. The initial complaint argues that USAA’s pricing policies demonstrate a greater regard for officers than for enlisted personnel.

Consumer Watchdog, a Los Angeles advocacy nonprofit that works to keep insurance premiums low, brought the case on behalf of the plaintiffs. Two Washington, D.C., law firms are also representing the enlisted service members. USAA, also known as United Services Automobile Association, denies the allegations and states that its rates are approved by regulators. The company maintains its commitment to providing competitive products and exceptional service to the military community.

During court proceedings, USAA’s lawyers argued that the dispute should be resolved by the California Department of Insurance and opposed certifying the case as a class-action. However, Judge Robert S. Huie determined that a class-action was the appropriate mechanism to adjudicate the matter. The lawsuit will primarily focus on whether USAA applied “good driver” discounts equally between enlisted personnel and officers.

USAA is comprised of multiple companies, with United Services serving predominantly military officers and USAA General Indemnity Corp. (GIC) serving primarily enlisted service members. The ruling suggests that the class-action will assess whether USAA purposely directed customers towards GIC policies, which are associated with higher premiums. Plaintiffs argue that such practices discriminate against enlisted military personnel and enlisted veterans, depriving them of the lowest premium possible under “good driver” discounts.

The case was initially scheduled for trial later this year but has been postponed. It will be resolved as a bench trial, with the judge making the final decision. USAA has the option to appeal the class-action certification ruling to the federal appellate court.

In summary, a federal judge in San Diego has approved class-action status for a lawsuit against USAA insurance. The lawsuit alleges that USAA engaged in discriminatory practices by charging enlisted service members higher premiums than officers. The ruling opens the possibility of impacting thousands of policyholders in California. USAA maintains that the allegations lack merit and that its rates are compliant with regulations. The case is set to be resolved in a bench trial at a later date.