USAA Casualty Insurance Hit With Lawsuit for RequiringSub-standard, ``Imitation`` Auto Parts in...

SEATTLE--(BUSINESS WIRE)--March 11, 1999--USAA Casualty Insurance Company (USAA) is the target of a lawsuit claiming the insurer compels auto repair shops to use "imitation" parts in repairs, then hides this practice from policyholders.

The suit, filed Mar. 12 in Washington's King County

USAA policyholder agreements state that repairs will be made using parts that restore vehicles to pre-crash physical condition and cash value. According to the lawsuit, repair parts that don't come from an original equipment manufacturer (OEM) can threaten a vehicle's structural integrity, resale value, and manufacturer's warranty, and cannot return the car to its pre-accident value.

Plaintiffs' attorney Steve Berman says it is a breach of contract and a violation of Washington's Consumer Protection Act when an insurer mandates the use of imitation parts without informing the policyholder.

"We trust our insurance companies to provide safe repairs and return our cars to pre-crash value, but USAA is misleading its policyholders and threatening their safety," said Berman. "Repair shops call these parts `Taiwan trash` for good reason -- they have substandard fit, impact resistance, and mechanical operation. This is a huge issue when it comes to things like crash protection."

The lawsuit against USAA claims the insurer also committed breach of contract and violation of good faith and fair dealing by forcing repair facilities to use imitation parts without disclosing that estimates were based on use of the cheaper imitation parts.

The USAA suit follows on the heels of similar class actions against major insurance companies. Berman represents consumers that recently filed suit against three of the nation's largest auto insurers: GEICO Insurance, a subsidiary of Berkshire Hathaway (NYSE:BRK); Allstate Insurance Company (NYSE:ALL); and Nationwide Insurance Company (NYSE:NFS). All of the lawsuits claim breach of contract with policyholders, and if certified by the courts will represent these companies' policyholders across the country.

More consumer protection information on imitation parts and legal action is available at www.safeautorepair.org.