JURY PENALISES USAA $3.5M OVER BURST PIPE

A California jury has awarded $3.5m in punitive damages against Texas-based military insurer USAA after a US Marine from San Diego suffered a burst water pie during the construction of a house extension. USAA had denied a 2004 claim for $84,744 from Captain John Colombero because of the ensuing water damage. He had already been awarded $50,000 for emotional distress. USAA said that it defended its work and that it would be appealing against the award. Jurors indicated on court forms that the damages were intended to punish USAA for malice, oppression and fraudulent conduct. David Rossmiller of Insurance Coverage Law Blog said that the extremity of the award meant that people would wonder whether the fact that the claimant was a Marine had a bearing on the case. “Would they have given the same award to somebody else? Probably not”, he said. Extreme punitive awards from juries are not unusual in the US legal system and are frequently reduced in future hearings.