Case Explained: MARTIN D. RENFROE v. USAA GENERAL INDEMNITY CO Appeals from the United States District Court for the Northern District of Alabama

Court: United States Court of Appeals for the Eleventh Circuit Filed: 2026-08-11 Docket: 4:21-cv-01649-SGC The eleventh-circuit vacated the district court’s judgment against USAA on the breach-of-contract claim and remanded the case for a new trial, while affirming the grant of summary judgment to USAA on the bad-faith denial-of-coverage claim. The court held that the “innocent-insured exclusion” in the insurance policy is enforceable under Alabama law because it does not contravene any positive statute or well-established rule of law. The court reasoned that Alabama courts are averse to voiding contractual provisions on public policy grounds unless their illegality is clear and certain, and noted that while the Alabama legislature has prohibited such exclusions in specific domestic abuse contexts via the Domestic Abuse Insurance Protection Act, it has not done so generally. Consequently, the exclusion’s unambiguous language barring coverage for losses caused by any insured’s intentional acts applies to the plaintiff, even if he was innocent of the arson. Regarding the bad-faith claim, the court affirmed summary judgment because USAA possessed an arguable lawful basis for denying the claim: evidence suggesting the plaintiff himself committed arson, including motive, cell tower data placing him near the scene, and his expertise in severing gas lines. The practical consequence is that the case returns to the district court for a new trial where USAA may present the innocent-insured exclusion as a defense, though the plaintiff’s bad-faith claim remains dismissed. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.