Two East Tennessee families with military service records are locked in federal legal battles with USAA, each accusing the insurer of dragging out claims for hundreds of thousands of dollars in home damage. One couple lost a home to fire in Virginia Beach before Hurricane Helene sent trees crashing into their new East Tennessee house and pushed in the front wall. The other family spent more than two years living in a rental after a burst valve gutted their home near Boone Lake, eventually rehoming their golden retriever because the rental would not allow pets.
Philip Burtt-Henderson and Jennifer Burtt-Henderson filed their federal breach of contract lawsuit against United Services Automobile Association on July 31, in the U.S. District Court for the Eastern District of Tennessee, court records show, according to PacerMonitor. The couple, who served a combined 35 years in the U.S. Marine Corps and had been insured through USAA for years, told WCYB that several trees fell on their home during Helene while the front of the house was pushing in. Philip Burtt-Henderson said the couple wants only what is due under their policy.
In public updates posted in July, Burtt-Henderson detailed that after USAA issued an initial payout, contractors in March 2025 discovered nearly $200,000 in additional structural damage, including a cracked ridge beam and a deflected front wall, according to a post on Facebook. That discovery, he said, led to the prolonged claim delays now at the center of the federal case. Mennonite Disaster Service is wrapping up a two-bedroom, one-bath home for the couple, per the station's report.
A Second Family, A Similar Fight
Honey Rodgers, a nine-year U.S. Army veteran, and her husband Cory Rodgers filed their own federal lawsuit against USAA General Indemnity Company on July 2, 2025, also in the Eastern District of Tennessee, according to PacerMonitor. Their case traces back to 2023, when a valve broke in the upstairs bathroom of their former Boone Lake home, causing hundreds of thousands of dollars in damage. Mold and other damage ultimately forced the family to completely gut what they had intended to be their retirement home.
USAA covered three months of the family's rental housing, but the Rodgerses ended up living in a rental house for more than two years, the station's report notes. Their daughter moved to Florida because of space constraints, and the couple eventually relocated to a new home in Florida themselves. They ultimately sold the damaged former home for a fraction of its potential value, with the sale barely covering the remainder of the mortgage.
Even after Rodgers officially filed the lawsuit, USAA continued to delay court proceedings, per the same account. Her lawsuit seeks to pay contractors and movers who are still owed thousands of dollars. Rodgers said homeowners have choices, options and rights.
What Tennessee Law Allows Policyholders To Recover
Both cases hinge on Tennessee's narrow path for challenging insurers, since the state does not recognize a general common-law tort for first-party insurance bad faith. Under Tennessee Code Annotated § 56-7-105, policyholders who establish that an insurer refused in bad faith to pay a valid claim within 60 days of demand can recover a statutory penalty of up to 25% of the loss amount, plus additional expenses and attorney fees, according to Justia Law. That statute is the central legal battlefield for families like the Burtt-Hendersons and Rodgerses.
The disputes also arrive against a backdrop of state scrutiny that began in the wake of Hurricane Helene. In October 2024, the Tennessee Department of Commerce and Insurance issued Bulletin 24-04, requiring all licensed property and casualty insurers to submit six monthly catastrophe claim reports tracking insurer responsiveness after the storm. That same month, Tennessee Insurance Commissioner Carter Lawrence formally requested that property insurers give storm-affected homeowners a 60-day grace period preventing policy cancellations for nonpayment of premiums, according to the Tennessee Department of Commerce and Insurance.
USAA's Broader Legal and Reputational Record
The East Tennessee lawsuits land amid other high-profile legal trouble for USAA. In February 2025, a Nevada state court jury awarded $100 million in punitive damages and $14 million in compensatory damages against the insurer in a separate bad-faith lawsuit over delayed claim payments, according to Courtroom View Network. That same January, a federal judge granted final approval to a $64.2 million class action settlement resolving allegations that USAA Federal Savings Bank overcharged military servicemembers on interest rates and fees, per Hagens Berman.
Even so, USAA continues to post strong marks in industry surveys. In J.D. Power's 2026 Property Claims Satisfaction Study released in March, USAA achieved an industry-leading score of 757 out of 1,000, though J.D. Power leaves the company officially unranked due to its restricted military membership, according to The Peril Desk. The gap between that national data and the experiences described by the Burtt-Hendersons and Rodgerses underscores how individual claims can stall even at insurers with strong overall reputations.
Water damage of the kind that hit the Rodgers home can be devastating regardless of flood zone designation. Data published by the Tennessee Department of Commerce and Insurance shows more than 25% of all flood insurance claims nationwide occur outside designated high-risk flood zones, and a single inch of water can cause more than $25,000 in property damage. WCYB reported it sent emails to USAA's public relations director requesting statements and said it will update the story with the company's responses.
