WILLARD, Ohio - Vern Hurst is a 91-year-old World War II veteran who believes he's not getting the insurance coverage he deserves after a June 19 fire at a house next door caused $6,000 damage to his Willard, Ohio home.
Hurst is a retired US Air Force Major who flew 72 combat missions during World War II and Korea, and even flew a bomber carrying a loaded "H bomb" during the Cuban Missile Crisis, awaiting orders from President John F. Kennedy.
Now all Hurst wants is what he calls "proper coverage" from USAA insurance, after the company informed him he's carrying a $5,000 deductible on his $6,000 claim.
"They don't live up their motto 'they know what it means to serve,'" said Hurst. "I keep paying them the premium each month, and it doesn't seem to be honored."
USAA determined the deductible on Hurst's claim based on 1 percent of the replacement cost of his home, a house USAA claims would cost nearly $500,000 to replace. A house the Huron County Auditor has listed at just $80,000 in taxable value.
Hurst explained how stunned he was to learn that USAA determined his home carries nearly a half-million-dollar replacement value.
"It was more of surprise than anything else," Hurst explained. "This not a tremendously expensive town to live in."
Willard real estate agent Caid McKinley ran comparable values of homes in neighborhood, and determined the house could easily be rebuilt for less than $250,000.
"Not only is Vern a World War II veteran, but he's been a customer of USAA for 63 years," said McKinley. "But they still sent him a check for just $800 to cover the fire damage."
5 On Your Side contacted USAA, and the company quickly responded. USAA will now send a team out to re-evaluate the house in the coming days.
USAA issued the following statement in response to our story:
We review this estimate with the member. If they believe the estimated amount should be higher or lower, we ask them to provide additional information and then recalculate the estimate. With this information, the member decides how much coverage to buy.
Each year at renewal time, we again communicate with our members and give them the opportunity to review their coverage amounts, deductible, and other policy information and to make changes.
Like other insurance companies, we typically give members options for the deductible amount on their policy. The deductible may be a specific dollar amount or a percentage of the full coverage amount for the home. If a member chooses a 1% deductible, for example, and their house is insured for $300,000, the deductible for any claim will be $3,000. Choosing a higher deductible usually will mean a lower premium.
When considering whether the coverage amount is appropriate, it is important to keep in mind that the goal is for the member to have enough coverage to enable the member to rebuild the house the way it was prior to the fire or other covered loss. This is why the estimate of the minimum cost to rebuild a house may be higher than its market value or tax value.
With respect to homes in our member’s neighborhood, many of these were built in the 1910's, 20's and 30's. Construction and materials were different in that time period. For example, houses may have original-to-the home hardwood floors, decorative woodwork, leaded glass, plaster walls, and different frame materials. These materials and the labor necessary to rebuild a home with these features will impact the estimated rebuild cost.
Specific to this member, USAA has contacted Major Hurst to address his questions about the estimated replacement cost of his home. We have offered to have an inspection performed to verify the amount of the estimate. We are waiting for the member to confirm that he wants to proceed with this.
As for the member’s deductible, we are making efforts to recover this from the party or parties responsible for the fire damage. (This process is called subrogation). Major Hurst understands that we are pursuing this on his behalf.
Consumers who believe they aren't being given what they consider to be fair coverage can contact the Ohio Department of Insurance online , or by calling its consumer hotline at 800-686-1526.
The Ohio Department of Insurance issued the following advice:
Consumers should determine a deductible amount they are most comfortable incurring. A higher deductible means you will have a smaller premium but more out-of-pocket costs in the event of a claim, while with a lower deductible you will incur less out-of-pocket costs in the event of a claim, but your premium will be higher.
There are three different ways in which homes are valued, and they are entirely independent of one another: 1) a tax value determined by the county 2) the determined market value when a home is being financed or sold 3) the insured value. They each take unique factors into consideration.
Consumers who want further information on how insurance home values are determined can contact the Ohio Insurance Institute regarding questions
about insurers’ approach to determining the valuation of the cost to repair a home after a total loss. .
NewsChannel5 and newsnet5.com will continue to follow-up on this developing story.
Meanwhile Hurst just wants what he calls "a fair deductible."
"We'll it seems to me they're not paying attention to business," said Hurst. "I see a lot of their advertising on TV, like a big percentage are going to stay for the rest of their lives. I'm not one of them."