Consumer Groups Challenge USAA Rate Filing

By | February 24, 2008

The Greenlining Institute is the most recent consumer protection organization to file a petition with the California Department of Insurance over a proposed rate filing by the United States Automobile Association. Greenlining’s petition joins an earlier petition by the Foundation for Taxpayer and Consumer Rights.

Greenlining said USAA’s filing for a 23.5 percent increase on its homeowners multi-peril rates is too high and would negatively affect the insurer’s policyholders, all of whom are either members or family members of the U.S. armed forces. Greenlining also criticized USAA for canceling more than 25,000 policies in the state.

In response to Greenlining’s statement, Roger Wildermuth of USAA corporate communications said his company is committed to providing its members with competitive rates and internationally recognized customer service. “We have filed for a rate increase for our California renters policies to better reflect the risk of earthquakes and flood — as USAA is currently one of the few to provide those coverages for renters,” said Wildermuth. “We are making some adjustments to that filing to clarify questions we’ve received, and we’re confident that those adjustments will address those questions.”

Wildermuth added that the carrier did not nonrenew 25,000 members last year. “Those were cancellations requested by our members, if, for example, they were deployed oversees or traded a renters policy for a homeowners policy,” said the USAA spokesman. “Our renters policies actually grew by 10 and 17 percent over the last two years.”

Wildermuth noted that his company has been working with the Foundation for Taxpayer and Consumer Rights to address that organization’s concerns over USAA’s initial rate filing.

Doug Heller, executive director for the Foundation for Taxpayer and Consumer Rights, confirmed that his group has been in discussions with USAA.

“We looked at USAA’s original rate hike and filed a challenge to it because we thought it was excessive,” said Heller. “After talking to us and reviewing our actuaries’ analysis, they recognized that their rate hike proposal was too high and made adjustments. They were very responsible and respective of California law, and said they’d lower their request. If their final amended filing comports with what they said they were going to do, we’re going to withdraw our challenges.”

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