USAA Insurance's automated system ‘arbitrarily’ denies claims, alleges lawsuit

A consumer class action was filed against USAA Casualty Insurance Co. and USAA General Indemnity Co. on Thursday, claiming that by assigning adjustment claims to outside parties, they unfairly and arbitrarily rejected personal injury protection and/or medical payment insurance coverage.

Plaintiffs Caryn Jennings and Tricia Harder accused USAA of violating the Washington Consumer Protection Act, breach of contract, and agreement of good faith and fair dealing in a complaint filed on November 16 in the Washington Superior Court for Clark County. The complaint was filed on behalf of the plaintiffs and others in a similar situation.

Those who complain that this practice has impacted their claims, which range from vehicle accidents to property damage, have been quickly dismissed without providing a chance for a comprehensive human review. As per the complaint, the automated system is incapable of taking into consideration unique situations and neglects to take into account relevant information that is essential for the selection of claims.

Although automated technologies may speed up certain processes, plaintiffs’ advocates say that they should not replace the critical human monitoring required for an objective and thorough assessment of claims. They emphasize the necessity of openness in the claims procedure and call for a comprehensive examination of USAA’s automated system to address any structural problems that can unjustly affect policyholders.

Plaintiffs, represented by counsel at Franklin D. Azar & Associates and Tousley Brain Stephens, contend that USAA needs to look into each medical bill that an insured party submits. They use a Medical Bill Audit (MBA) system instead, which is intended to lower the amount USAA pays for medical claims.