USAA Faces Hefty Verdict in Bad Faith Insurance Case
A Nevada jury has delivered a substantial verdict against USAA, awarding a policyholder a total of $114 million in a bad faith insurance case. The decision, reached on March 10, 2025, includes $100 million in punitive damages and $14 million in compensatory damages, and stems from USAA’s handling of a claim filed by Timothy Kuhn following a 2018 rear-end collision.
Kuhn’s case involved a highway accident where his BMW sedan was struck by a Ford F-150 pickup truck. Initially, USAA acknowledged the other driver’s fault. However, when Kuhn sought compensation for injuries, including symptoms of traumatic brain injury, USAA unexpectedly argued that Kuhn was partially responsible for the crash.
Kuhn’s attorney, Kimball Jones of Bighorn Law, detailed the ongoing effects of the accident, including memory loss, headaches, and executive function issues, which Kuhn attributed to a traumatic brain injury. Despite accumulating significant medical bills, Kuhn struggled to receive what he considered fair compensation from his own insurer. Ultimately, the core of the lawsuit revolved around USAA’s shift in position regarding liability.
Before the trial, USAA offered a meager $10,000 settlement, which Kuhn’s attorneys characterized as a “lowball” attempt considering the severity of his injuries. Although USAA eventually paid the full $250,000 policy limit, this occurred just days before the trial’s start, leading Kuhn’s legal team to argue that the insurer’s actions forced him into unnecessary litigation and financial hardship. Jones emphasized the contradiction in USAA’s approach, stating, “USAA knew whose fault it was while they were blaming Tim.”
Representing USAA, attorney Robert McLay of DKM Law Group defended the insurer’s actions. He argued that disputing a claim doesn’t automatically constitute bad faith. McLay questioned the extent of Kuhn’s head injury. “It’s about the money,” McLay told jurors, portraying the $250,000 payout as a litigation strategy.
The jury sided with Kuhn, delivering a message about the public’s perception of insurance companies. Following the verdict, USAA stated it “respectfully disagrees with the verdict and does not believe it is supported by the evidence presented at trial.” The company is expected to consider an appeal.
Kuhn’s attorney, Joshua Berrett, expressed hope that the verdict would prompt insurance companies to reconsider their treatment of policyholders. The outcome of any potential appeal in this case will likely influence similar cases in the future.
