Washington fines USAA, Allstate over claims violations and 86,705 home policies

The Washington Office of the Insurance Commissioner fined USAA and Allstate a combined $230,000 for claims-handling violations and missing premium-change language on homeowners policies. The OIC also said USAA made $88,241 in additional payments on 158 auto claims.

The OIC fined USAA Casualty Insurance Co. $140,000 for its handling of auto claims and Allstate Vehicle and Property Insurance Co. $90,000 for claims-handling violations and failing to follow the state’s premium-change transparency rule.

“We take our role as a consumer protection agency seriously,” Insurance Commissioner Patty Kuderer said in announcing the fines.

“These orders, and the actions we’ve taken against insurers for failing to meet their obligations to policyholders when processing their claims, are a testament to that work.”

USAA paid $88,241 on additional claims

The OIC received 445 complaints involving USAA between April 2019 and April 2024. The agency reviewed 125 complaints filed between January 2023 and April 2024 and found at least one potential violation of state law or rules in 31 associated auto claims.

USAA confirmed 19 violations. The findings included delays in responding to consumers, failures to investigate claims within required timeframes, investigations that were not completed within 30 days and refusals to pay claims without a reasonable investigation.

One finding involved a total-loss settlement that did not include applicable taxes and fees. After reviewing a complaint in March 2024, the OIC asked USAA to examine its total-loss settlements from the previous two years.

USAA reviewed its records and made additional payments on 158 claims totaling $88,241 within two months. The company also reported that it corrected the issue to prevent it from happening again.

Allstate claims review found 16 violations

The OIC reviewed 108 claims from a database of 3,040 Allstate claims after receiving complaints about the company’s claims handling. The agency found nine claims with a total of 16 violations.

The findings included failures to use reasonable standards for processing and paying claims, delays in responding to consumers and investigations that were not completed within the required 30-day period.

The OIC also identified one instance in which it found that Allstate misrepresented important facts when issuing a payment substantially below its own estimate.

According to the consumer complaint memo, Allstate’s initial claim payment was $20,000, while its estimate of the property’s actual cash value was $22,390.14 — a difference of $2,390.14.

Separately, the agency found that 86,705 Allstate homeowners policies lacked required language explaining premium changes. Of those policies, 86,136 had a premium increase at renewal.

The policies were issued between April 15, 2024, and April 22, 2025. The OIC’s premium-change transparency rule took effect June 1, 2024, and the renewal-notice period was extended from 45 days to 60 days in 2025.

Washington updates claims-handling rules

In a separate enforcement action, the OIC reported fining Integon National Insurance Co. $50,000 after finding claims-handling violations in 14 of 108 randomly selected claims.

The agency cited delayed payments, delays in investigating claims and responding to policyholders, and total-loss vehicle settlements that omitted licensing fees or taxes.

Washington adopted updated minimum claims-handling rules on Aug. 18, with an effective date of Oct. 18. The changes address claim investigations, insurer communications with claimants and the evaluation of covered losses.

In its rulemaking documents, the OIC said auto and homeowners claim volumes had remained relatively consistent over the preceding six years while consumer complaints and Insurance Fair Conduct Act notices had increased.

Those notices indicate a consumer’s dissatisfaction with claims handling and may signal an intent to sue an insurer.

The revised standards include requirements for insurers to provide more information about investigations that remain unresolved and to explain certain decisions involving vehicle repair estimates.

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This report compiled by InsuranceNewsNet staff.