USAA Hit with $100M Punitive Bad Faith Judgment: A Story of Corporate Greed
Imagine sitting in traffic on a regular day when suddenly, your life changes in an instant. That’s what happened to Timothy Kuhn in 2018, when a speeding F-150 rear-ended his car at 45 miles per hour. But what came next was even more shocking—the biggest battle wasn’t over his injuries but against his own insurance company, USAA.
Introduction
USAA promises to stand by military families, but when Timothy Kuhn needed them most, they didn’t just deny him—they fought against him. This is the story of betrayal, corporate greed, and a $100 million verdict that exposed the truth.
What Happened? The Crash
Let’s set the stage. Timothy Kuhn was driving on a Las Vegas freeway when traffic came to a stop. A Ford F-150 behind him didn’t slow down and crashed into his car at 45 miles per hour, pushing his BMW into another vehicle. The impact left him with severe neck and back injuries, along with something much worse—a traumatic brain injury (TBI).
While Timothy experienced some improvement in his physical injuries, his recovery was complicated by enduring cognitive impairments that severely affected his daily activities and professional responsibilities. The TBI symptoms continued, and his medical bills piled up as he sought treatment from neurologists across the country.
Timothy did everything right—filed claims, sought medical help, and trusted his insurer. But USAA made a choice that would change everything.
USAA Turns on Their Own
Here’s where things went sideways. After paying premiums for years, Timothy trusted USAA to have his back. Initially, USAA agreed that Timothy wasn’t at fault for the crash. But when he secured $50,000 from the at-fault driver’s insurance, USAA’s story changed.
Instead of honoring his claim, USAA did something unthinkable. They intervened in the lawsuit—not to support Timothy, but to argue that he was at fault for the crash.
They weren’t just refusing to pay—they were actively shifting blame onto their own policyholder.
The Cost of Corporate Greed
USAA’s delay tactics drained Timothy Kuhn financially and emotionally. They offered him just $10,000, barely enough to cover his medical expenses. As his condition worsened, USAA forced him into a legal battle that dragged on for years.
Timothy then filed a bad faith claim against USAA, arguing that they breached their obligations by trying to place the blame on him after already determining he wasn’t at fault.
In the end, USAA offered $250,000, the policy limit, just on the eve of trial—something they should have done from the beginning.
USAA’s Reckoning – A $100 Million Verdict
But this time, USAA couldn’t avoid the consequences. In February 2025, a Nevada jury sent a powerful message. They awarded Timothy Kuhn $14 million in damages and an unprecedented $100 million in punitive damages against USAA.
The verdict wasn’t just for Timothy—it was a warning to the entire insurance industry. USAA was held accountable for their bad faith practices, and this ruling shines a light on what many insurers try to get away with behind closed doors.
The Truth Behind USAA’s Patriotic Marketing
USAA markets itself as the gold standard for military families—loyal, trustworthy, and dedicated. But behind that branding is a corporation that denies claims, shifts blame, and fights the very people they claim to protect.
At Trailstone, we believe insurance should mean something. It should be a promise kept—not a battle fought in court. If you or someone you know has been let down by USAA or another insurer, don’t wait until it’s too late.
It’s time to hold insurers accountable. If you’ve been wronged, share your story and let’s shed some light on their shady practices.
Conclusion: The Bigger Picture
USAA has faced several bad faith claims and punitive damage verdicts in the past few years, including:
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$15 million for mishandling a Hurricane Katrina claim.
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A $64.2 million settlement for illegally overcharging service members on loans.
This pattern is clear—profits over people. But with the $100 million punitive verdict against USAA, this time the insurer was held accountable.
If you’ve faced issues with USAA or any insurer, don’t hesitate to reach out. At Trailstone, we’re here to help you get the coverage you deserve.