Ten USAA policyholders who lost their homes in the October fires sued the insurance carrier Thursday in Sonoma County Superior Court, alleging the company committed fraud among other violations by underestimating the amount of coverage they needed to rebuild their homes.

The fire victims alleged the Xactware software that USAA used “systemically underestimated” the replacement cost of the homes despite contending it produced “outstanding” and dependable valuations.

“As a result, USAA policyholders were lulled into selecting USAA-recommended policy limits insufficient to cover the total replacement cost of their homes, despite having contracted with USAA for that specific purpose. As a result USAA policyholders are underinsured and unprotected,” the suit reads.

The plaintiffs also are suing Xactware Solutions Inc., the Utah company that provides the software. Both companies could not be reached for comment Thursday by deadline.

Earlier this month, USAA said its goal was to provide the appropriate amount of insurance, “not underinsuring but also not overinsuring.” It said it explains the difference between the rebuild cost and current market value, and was working with customers to address questions.

The plaintiffs include Robert Bivin, a USAA policyholder who lost his $1.2 million Fountaingrove house in the fire and now contends he is hundreds of thousands of dollars underinsured after switching over his homeowner coverage this summer to the San Antonio-based carrier.

In an interview earlier this month, Bivin said his new USAA coverage was less than his old insurer, and was given an estimated rebuilding cost of slightly more than $621,000. He said his interaction with his USAA agent left him with the impression that he was previously overinsured.

In the aftermath of the fires, Bivin said he was told by a USAA agent: “The limits are the limits. They are your responsibility.”

Stephen Larson, an attorney for the plaintiffs, said he expects other USAA policyholders will join the suit, and that his firm also is looking to sue other carriers as well, even if they didn’t use the Xactware software.

Local policyholders had “reasonably relied” on agents representing the carriers to place them in the right coverage, and thus assumed a fiduciary duty to their client, Larson said.

“They hold themselves out as the professionals,” he said of the role of insurance agents.

The industry disputes that agents have such a duty and contends it is policyholders’ responsibility to ensure adequate coverage levels.

“There is no incentive for an insurance company to underinsure a home,” Mark Sektnan, vice president of the Property Casualty Insurers Association of America, said in an interview earlier this month.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.