When Duston Hamilton sees a USAA Insurance commercial on television, the former Marine says he gets disgusted. He’s a general contractor who helps hailstorm victims repair their homes.

The TV ads are very misleading,” he says of the San Antonio-based insurance giant that caters to retired and active members of the military.

“They’re using this commercial to say it’s an honor and a privilege that we can provide you with an insurance company,” he says. “But they’re not paying people what they are owed. It angers me that someone would take advantage of our heroes and their families.”

Mike Martin, who worked for Allcat Claims Service of Boerne as an independent insurance adjuster doing contract work for USAA, says the same: “The ads are very contradictory.”

“Everybody’s got smiles on their faces. That is clearly not representative of what goes on.”

What goes on? The Watchdog receives tips from USAA clients who complain that the company sometimes declines to pay claims for repairs that several years ago, insurance adjusters say, would have been paid without a hitch.

I sent USAA’s communications director Rebekah Nelson a detailed letter listing all the people I talked to, what they said, and specific court cases I would be referring to in this two-part Watchdog series on USAA. I asked for comment on each.

She wrote back, “USAA will not speak to specific issues due to member privacy or pending litigation. However, USAA handles millions of claims every year with a high satisfaction rate and remains committed to serving its membership.” There was no further comment.

‘Stress and depression’

Jermal Dubose is a retired Army first sergeant who lives in Deridder, Louisiana. At first, his hurricane damage claim appeared to be on track. But then his claim went to Allcat adjusters who, along with USAA employees, put him off for months.

“USAA has no idea the amount of undue stress and depression,” he says. “I’ve lost more than I ever will be able to get back.”

Allcat executives did not return The Watchdog’s interview requests.

Tamara Henk, a retired colonel with the Texas Air National Guard, and her husband, David, a retired Navy commander, say they’ve been USAA members for almost 40 years. The Grapevine couple said trying to get a roof replaced is their “worst-to-date experience.”

USAA sent out three different roof inspectors, and each of the reports they wrote gave a different reason for denial, the couple say. When one inspector disputed her claim that her roof was hail damaged, she went to her freezer and pulled out a hailstone she had saved from the storm.

Finally, after a second storm hit, they were able to get their claim handled and a new roof.

MaryAnne Cowdrey and her husband, Joel, a retired Navy lieutenant who served during the Vietnam War, say they were USAA customers for 58 years. The Oak Cliff couple say they got tired of fighting with USAA, took out a loan and paid $70,000 to finish the repairs.

“It’s gruesome trying to reach them on the phone,” she says.

Case updates

Updates on previous USAA cases I’ve reported on:

John Wayne Walding, a Green Beret who fought in Iraq and Afghanistan and lost a leg, sued USAA. The Little Elm resident claimed that USAA gave him approval to repair his truck’s engine. Then after the $9,500 repair was done, the company changed its mind and declined to pay.

“Fighting bullets and fighting finances are two different things, but they’re both terrifying,” he said.

Before trial, Walding’s lawsuit was settled. Its terms are confidential.

John and Sharon Kelley of Georgetown, USAA customers for more than 50 years, sued over payment of $19,000 for a new roof. The retired Navy surgeon and his wife sat through a five-day trial. A jury awarded them $143,000 in damages and legal fees.

Before USAA could appeal, the couple’s lawyer say they reached a confidential settlement with the company. Those terms cannot be disclosed.

Larry and Shirley Reyes of Deer Park couldn’t get all of their hailstorm claims paid. But in a lucky break, the Allcat adjuster, Jennifer Posas, turned whistleblower and testified under oath that her supervisor made her drop the recommended roof payout to a measly $2,900.

A lawyer for the couple who sued USAA told me the case was settled, and those terms are also confidential.

Another lawsuit against USAA I’ve found: A California lawyer, Harvey Rosenfield, sued in that state, claiming that current and former military officers are treated better and pay better insurance rates than current and former enlisted military members.

The case awaits trial, but its outcome will only affect Californians who use USAA.

‘We’re not paying’

Don’t underestimate the psychological effect this can have on USAA’s clients.

Mike Martin, who worked for adjuster Allcat, said it hurt him emotionally to watch clients get stiffed.

“You have to turn yourself robotic,” he said. “I want to be on the side of the homeowner.”

He’d go on a roof, declare it needed to be replaced and then be overruled by someone sitting at a desk who didn’t go up there with him.

“They’d say, ‘We’re not paying for that roof,’ and I’d say, ‘You’ve got to be kidding.’”

He’s watched USAA clients “crying and everything.”

He calls whistleblowers like him “patriot fighters for the homeowners.”

“When it comes to veterans, they come first,” he said.

Although not always.

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