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In April of 2008 USAA was punished to the tune of $3.5 million in punitive damages for malice, oppression and fraud committed against a policy holder who bought one of its homeowners' insurance policies for a home in Oceanside, California, according to the Fresno Bee. The homeowner, a Marine captain who did 3 tours of duty in Iraq, suffered over $80,000 in water damage to his home and its foundation when a pipe burst as a result of construction performed during an addition to his home. Instead of promptly investigating and paying the claim, USAA found excuses to avoid payment and delay the resolution of the claim. The jury's verdict was apparenly intended to try to discourage such business practices. Colombero v. USAA, ___ (Cal. 2008)
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