A federal appeals court affirmed that USAA did not act in bad faith over a burned Porsche, despite a string of claims mistakes. 

The Eighth Circuit ruled on August 18, 2026, upholding summary judgment for USAA on a policyholder's bad faith claim. 

The dispute began when a 1974 Porsche 911S, insured with USAA and rebuilt over several years, caught fire on August 12, 2023, and was declared a total loss. 

The claim quickly tangled. A USAA representative first told the owner he did not need a fire report, that the company would "just ask if you have a report or not." A claims adjuster later reversed course, calling the earlier statement "false information" and saying USAA would run its own fire investigation. 

USAA looked into how the fire started, including whether it was intentional. The owner took that to mean he was being investigated for arson and fraud. An engineer USAA hired found "the vehicle likely had a fuel line leak which was probably caused by deterioration of the rubber fuel lines," and the special investigations unit "concluded there were no indications [of] an intentional fire and closed the investigation." 

Two days later, USAA offered $46,106.75, built on a CCC Intelligent Solutions appraisal using a 1973 Porsche 911T and a 1976 Porsche 911S Targa. The owner rejected it and proposed his own comparables. USAA refused them because they came from the auction site Bring A Trailer, which its dispute team would not consider. 

Other errors followed. The adjuster wrongly said the policy had an appraisal clause - a term Arkansas law bans - and wrongly claimed "arbitration law" blocked a partial payment during the dispute. USAA corrected both. 

The insurer later had RM Sotheby's reappraise the car at about $65,000 and voluntarily paid the difference. A jury awarded $71,363.95 on the breach of contract claim, leaving a final judgment of $8,043.70 after earlier payments. 

The takeaway for carriers turns on the standard. Under Arkansas law, bad faith requires "affirmative misconduct that was dishonest, malicious, or oppressive," which the court called "rigorous and difficult to satisfy." Even "negligence, gross ignorance, or a complete failure to investigate a claim" falls short. The court read USAA's errors as honest mistakes. 

One judge dissented, arguing the majority weighed the mistakes separately rather than together, since "the whole here is greater than the sum of its parts." He also warned that an insurer's duty of good faith "is nondelegable," so a carrier cannot escape it by handing claim work to outside vendors.