USAA Casualty Insurance is the target of a class action lawsuit that accuses the company of violating policy terms and Florida law regarding damage coverage caused to homes as the result of sinkholes. The complaint asserts that USAA ignored its obligations to its customers to issue official and clear notices of non-renewal, particularly in its sinkhole damage coverage. Instead, the insurance company made fundamental, material changes to sinkhole terms and conditions by simply sending its customers new policies or endorsements that significantly increased the amount of the sinkhole deductible. USAA customers who make sinkhole claims have faced, or will face, deductible costs that are far in excess of their previous policies, leaving them with greatly reduced coverage and paying thousands more than they should, according to the lawsuit.
The breach of contract complaint is significant because residents of Florida are particularly susceptible to damage from sinkholes. Loss as the result of sinkholes can be huge, even costing entire homes. Florida has more sinkholes than any other state in the U.S. Since 1981, Florida has required all homeowner insurers to offer coverage for damages resulting from sinkholes. The legal complaint points out that changes to a homeowner’s sinkhole coverage may mean substantially more in costs for the USAA customer whose property has suffered sinkhole damage. Under Florida law, this necessitates notifying customers with a “non-renewal” policy. Instead, USAA has been issuing the change in a standard “renewal” policy in violation of state law.
Florida resident Kimberly Peterman filed the class action suit against USAA on behalf of herself and those similarly situated. Peterman’s home suffered significant sinkhole damage, with loss estimates reaching over $130,000. Yet, in its amended sinkhole policy, USAA requires Peterman to pay a roughly $38,000 deductible. The deductible under the prior version of the policy was $500.
Peterman alleges she was not properly issued a “non-renewal” policy that would have informed her of the significant sinkhole coverage changes. She was only issued the standard coverage “renewal.” Members of the class action suit are USAA homeowner customers who have suffered similar sinkhole damage, and who were never issued “non-renewal” policies by the company.Article Type: Lawsuit