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USAA wins bad faith fight over burned Porsche, appeals court rules
The Eighth Circuit upheld summary judgment for USAA after the insurer corrected appraisal and partial-payment errors and later paid an additional amount following a higher RM Sotheby's valuation.
A federal appeals court has affirmed that USAA did not act in bad faith in handling a claim tied to a burned Porsche, even as it acknowledged a series of mistakes during the dispute process, according to Insurance Business.
The case stemmed from a 1974 Porsche 911S insured with USAA that caught fire on August 12, 2023, after being rebuilt over several years and later declared a total loss. USAA’s handling of the claim became contentious, including conflicting statements from USAA personnel about whether a fire report was required and how USAA would investigate the cause.
USAA’s investigation included review of whether the fire was intentional. An engineer USAA hired concluded the vehicle likely had a fuel line leak caused by deterioration of rubber fuel lines, and its special investigations unit closed the probe with no indications of an intentional fire.
USAA initially offered $46,106.75 using a CCC Intelligent Solutions appraisal, which the policyholder rejected, and the carrier also refused the owner’s proposed comparables from Bring A Trailer. The insurer later had RM Sotheby's reappraise the car at about $65,000 and voluntarily paid the difference, and a jury awarded $71,363.95 on a breach of contract claim, leaving a final judgment of $8,043.70 after earlier payments. The appeals court said under Arkansas law, bad faith requires affirmative misconduct that is dishonest, malicious, or oppressive, a standard it described as rigorous and difficult to meet.