A Nevada jury has dealt a severe blow to USAA, awarding $100 million in punitive damages and $14 million in compensatory damages to policyholder Timothy Kuhn in a bad faith insurance case. The verdict stems from USAA’s handling of Kuhn’s claim following a 2018 rear-end collision, where the insurer initially determined he was not at fault but later argued in litigation that he was responsible.
The case revolved around a highway collision in which Kuhn’s BMW sedan was rear-ended by a Ford F-150 pickup truck traveling at 45 miles per hour. Initially, USAA acknowledged that the other driver was fully at fault. However, when Kuhn sought damages for injuries – including what he described as symptoms of traumatic brain injury – USAA intervened in his lawsuit against the at-fault driver and unexpectedly argued that Kuhn was partially responsible for the crash.
Plaintiff attorney Kimball Jones of Bighorn Law detailed how Kuhn experienced ongoing memory loss, headaches, loss of smell, and trouble with executive function – symptoms commonly associated with traumatic brain injuries. Despite accumulating substantial medical bills from neurologists and rehabilitation specialists across multiple states, Kuhn struggled to obtain what he considered to be fair compensation from his own insurer.
Kuhn’s legal team initially sought $20 million in damages, alleging that USAA used a "delay, deny, defend" strategy– an industry tactic aimed at minimizing payouts by dragging claims through litigation.
Before litigation, USAA made an initial settlement offer of just $10,000, which Kuhn’s attorneys described as a "lowball" attempt given the severity of his injuries. While the insurer eventually agreed to pay the full $250,000 policy limit, it did so only days before the trial began. Kuhn’s attorneys argued that USAA’s refusal to resolve the claim earlier forced him into prolonged litigation and financial strain.
Jones emphasized the contradiction in USAA’s legal approach, stating, "USAA knew whose fault it was while they were blaming Tim." He accused the insurer of breaching its duty of good faith by shifting blame to its own policyholder despite having initially acknowledged the other driver’s liability.
Representing USAA, attorney Robert McLay of DKM Law Group defended the insurer’s actions, arguing that disputing a claim does not automatically constitute bad faith. He maintained that Kuhn’s head injury was exaggerated, pointing to evidence such as Kuhn’s use of his phone in the ambulance after the crash – behavior that, according to McLay, contradicted the narrative of a severe brain injury.
"It’s about the money," McLay told jurors, asserting that the $250,000 payout was part of a broader litigation strategy rather than an admission of wrongdoing.
McLay also contended that Kuhn could have pursued additional compensation from his excess insurer, Hudson, which was not part of the trial. He insisted that USAA’s delayed payment was not a sign of bad faith but rather a reasonable effort to investigate the claim and negotiate a fair resolution.
Ultimately, the jury sided with Kuhn, delivering a verdict that underscores the risks insurers face when they engage in robust claims-handling practices. The massive punitive damages award signals a strong message that the public sees insurers in a very poor light.
Following the verdict, USAA issued a statement saying it "respectfully disagrees with the verdict and does not believe it is supported by the evidence presented at trial." The company is expected to explore legal options, including a potential appeal.
"We hope that this verdict will get insurance companies to stop treating their own insureds like they are the adverse party and start considering the interest of the insureds, like they are supposed to," Kuhn’s attorney Joshua Berrett stated.
The outcome of any potential appeal will be closely watched, as it could set a precedent for similar cases in the future.
