Dallas Fort Worth Insurance Lawyer Blog

A recent article originating in Florida, highlights a problem that many homeowners face and none wished they faced. The article title "Insurers dropping Chinese drywall policies", talks about some new homes being built with a Chinese drywall that emits sulfuric fumes and corrodes pipes. Sounds pretty bad, and it is, especially if it's your house this drywall is in.

The problem could be very large considering there appears to have been 500 million pounds of this drywall imported into the United States between 2004 and 2008. The houses constructed with this drywall seem to be concentrated in the Southeast, especially Florida and coastal areas of Louisiana and Mississippi. Texas and the Dallas, Fort Worth, Arlington, Weatherford, and most of the areas of the State seem to have escaped this problem

Most the insurance companies are denying the claims submitted by homeowners. The basis for the denials will vary but most of the time the reasons have to do with the problem being a "pre-existing" condition, or some type of construction defect exclusion. Both of these are often times omitted coverages in the homeowners policies.

What's worse is this. When an insurance company discovers you have this defective drywall in your house they are cancelling the policy or at the least refusing to renew the policy. When the homeowner tries to get other coverage they are denied. The result of no insurance coverage ends up being devastating for homeowners because the majority of homeowners also have loans on their homes. One condition of all these loans is that the homeowner maintain insurance. When the homeowner cannot get coverage the loan company will foreclose.

From a financial standpoint, this situation is wiping out the saving and net worth of couples and individuals. Anyone faced with this situation can only hope to find an experienced Insurance Law Attorney willing to read the insurance policy to look for and find reasons to have the insurance company to pay for the loss.

The Supreme Court of Texas decided a case this year wherein the distinction between "claims made" policies and "occurrence" policies was discussed. This case is, Prodigy Communications Corp. v. Agricultural Excess & Surplus Insurance Company.

As discussed in an earlier case on this blog, the PAJ case, the main issue was whether or not the inusrance company was still responsible under the terms of the insurance policy even though the insured person or entity did not timely notify the insurance company of the claim. As in PAJ, the court ruled that because the insurance company could not show it was harmed by the delay in being informed of the claim, the court ruled that the insurance company must provide coverage.

The difference in this case, Prodigy, as compared with PAJ, was the different types of policies at issue. When dealing with insurance policies it is important to understand the distinctions between these two types of policies.

Policies written on a "claims made" basis, means that the policy only covers those claims first asserted against the insured during the policy period. In other words, the event used as the basis for the claim could have arisen in, let's say January of 2001, the policy was purchased in April 2001 and covered til October of 2001. Now, the claim that had its basis arise in January, is asserted against the insured in June of 2001. Under a "claims made" policy the claim should be a covered claim.

Policies written as "occurrence" policies, which is the type for most policies, covers only claims arising out of occurrences happening within the policy period, regardless of when the claim is made. Using the prior paragraph example, there would not be any coverage because the event occurred prior to the policy period. Using this same policy period, purchased in April 2001 and providing coverage til October 2001, lets say the event happened in July 2001. The claim would be covered even it the claim was not asserted until December of 2001, a time after the policy had expired.

All the above can be confusing and illustrates why a person needs to seek the advice of an experienced Insurance Law Attorney when confronted with a claim being denied. Most people will not understand the differences between these two types of policies and the different rules that apply to them. Further, just because the words in a policy say something, that does not mean those words legally mean what they say. Too often, insurance companys put language in their policies that are not legally enforceable and rely on your lack of legal knowledge to get away with denying benefits wrongfully.

Texas Insurance Code, art. 5.06-1 and the particular policy's "Right to Recover Payment clause create a statutory and contractual right of subrogation against a third party motorist to recover uninsured and underinsured payments the insurance company makes to its customer. If the insurance company makes a payment to any person under this coverage, the insurance company is entitled to recover up to the amount of the payment from the proceeds of any judgement or settlement with the person. This is spelled out in art.5.06(6).

The result of this rule is that a person who collects uninsured or underinsured benefits from their insurance company as the result of someone else's negligent actions in a car wreck type of situation, cannot turn around and sue that individual. Or, if you do sue the responsible party and they are successful in collecting money from that individual, then they must pay back the insurance company for the benefits they have paid on the insured persons behalf. This of course is limited to paying the insurance company back only up to the amount they have paid out. Any excess would belong to the injured, insurance company customer. The purpose of this rule is to prevent a double recovery by the injured party.

What happens most of the time in real life is that the injured, not at fault person, makes a claim against the person who caused the injury. The injured person then discovers that the atfault person is either uninsured or underinsured. They then make the uninsured or underinsured claim against their own insurance company. Rarely, or almost never does the injured party pursue a further claim against the atfault party. However, the insurance company that paid the benefits will do an asset check on the atfault party and make a determination as to whether or not it is financially worthwhile to pursue the atfault party.

There are some legal loop holes to jump through to properly make these types of claims. If they are not pursued properly the insured person risks losing some of their benefits and for this reason need to seek the advice of an experienced Insurance Lawyer Attorney.

One advantage that a policy holder has when making a claim for uninsured or underinsured benefits is that the policy holder does not have to prove the atfault person is uninsured or underinsured. It is the burden of the insurance company to prove the atfault person is not uninsured or underinsured. This burden is placed on the insurance company by art. 5.06-1(7).

An opinion issued by the Texas Court of Appeals in Houston on October 15, 2009 is noteworthy. Atleast one part of this decision addresses a law in Texas that most attorneys do not know.

The case is Anthony Sheppard v. Travelers Lloyds of Texas Insurance Company. This case discusses limitations periods. Limitiations periods are the timelines within which a lawsuit must be filed or otherwise it is barred. These limitations periods are in Chapter 16 of the Texas Civil Practice & Remedies Code. There are 44 sections in Chapter 16 addressing different causes of actions and the limitations applicable to them. Plus there is a ten page chart that breaks down these sections and tries to make them easier to understand.

A carefull reading of Sheppard goes a long way in making these limitations periods as they relate to insurance contracts understandable. And it is important to understand that breaches of an insurance contract usually go hand in hand with other violations of the Texas Insurance Code. Most Insurance Code violations, which are also violations under the Texas Deceptive Trade Practices Act have a 2 year statute of limitations. Texas Insurance Code, Section 541.162 sets out the limitations period for insurance code violations at two years with some variations to the two year period.

The breach or breaking of an insurance policy is a Breach of Contract claim and that is governed by a four year statute of limitations in the Texas Civil Practice & Remedies Code, Section 16.004. However, and this is something a lot of attorneys are unaware of, Section 16.070 allows the contract itself to shorten this four year statute of limitations to a period less than four years but not less than two years.

Once the applicable period for the statute of limitations has been established, the next issue is, when does that period begin. As a general rule, a cause of action accrues and the statute of limitations begins to run when facts come into existence that authorize a party to seek a judicial remedy. In most cases, a cause of action accrues when a wrongful act causes a legal injury, regardless of when the injured party learns of that injury.

Sometimes the wrong is committed or the injury is incurred but the party who is harmed does not know about the harm yet. The actual time frame for starting the running of the statute of limitations may be deferred if the cause of action is, 1) not discovered as a result of fraud or fraudulent concealment; or 2) is "inherently undiscoverable".

The Sheppard case argues several different reasons why the statute of limitations should be extended because of the facts in the case. Sheppard lost his arguements but the discussion is a good point of reference for seeing how the Courts look at these matters. An experienced Insurance Law Attorney is going to understand and know about these arguements. The important thing is that anytime an insured person has a claim, that they immediately seek legal advice if the insurance company does not immediately handle the claim. Otherwise they run the risk of having one or more of the statutes of limitations expire on their case.

An appeal from a Dallas, Texas Court decision was decided by the Texas Supreme Court, in the case PAJ, Inc., d/b/a/ Prime Art & Jewel, v. The Hanover Insurance Company. This case was decided in January, 2008. It discussed the responsibilities of holders of an insurance policy as it relates to their duties after an accident or loss and how the failure of fulfilling those duties affects coverage under an insurance policy.

As a general rule almost all insurance policies require the policy holder to do the following: 1) promptly notify the insurance company of any loss or claim, 2) cooperate with the insurance company investigation of the claim or loss, 3) take reasonable actions to protect against further loss.

When a claim is denied due to a policy holder not promptly notifying the company of the claim or loss the insurance company has the burden of proving that this failure to promptly notify caused harm to the insurance company. This was the issue in PAJ.

PAJ was sued for copyright infringement. PAJ was unaware that the policy of insurance they had with Hanover would cover a copyright infringement lawsuit. It was about four to six months into litigation before PAJ discovered that the Hanover policy would cover this type of claim. Hanover refused to assist in the claim stating that PAJ violated the policy by not timely notifying Hanover of the claim.

The courts' decision was stated as follows: "We hold that an insured's failure to timely notify its insurer of a claim or suit does not defeat coverage if the insurer was not prejudiced by the delay". In this case Hanover could have easily taken over the lawsuit and handled this claim like any other. The burden was on Hanover to show that the failure to be timely notified caused them harm.

A policy holder also has a duty to cooperate with their own insurance company when a claim is made. This will usually include filling out forms, making a statement, and in the case of bodily injury, may include an independent medical exam. Sometimes after giving a statement the policy holder may be required to give an examination under oath (EUO).

An EUO is a formal proceeding whereby an insured, under oath, and in the presence of a court reporter, is questioned regarding the specifics of the claim. Although the policy holders failure to give an EUO when properly requested may technically be construed as a breach of the insurance contract, it does not permit an insurance company to refuse a claim. This was decided in State Farm General Insurance Company v. Lawlis. Nor can an insurance company delay payment solely upon failure to give an EUO. This was decided in Aetna Casualty & Surety Company v. Garza. However, other courts have held the opposite of both the above cited cases. Bottom line - a wise policy holder seeks the advice of an experienced Insurance Law Attorney whenever they are being requested to give an EUO..

As for taking reasonable actions to protect against further loss, each case would be handled on a fact specific basis. Essentially, if a policy holder can take reasonable steps to protect against further loss or an increased loss, then they should take those steps. If they fail to do so and that failure causes further loss, then they run the risk that the additional loss may not be covered.

Anytime an insurance company denies or refuses a claim for any of the above reasons, seek legal advice. Do not do anything further until you have received that advice.

In Texas, there are rules regulating the conditions for an insurance company to cancel certain liability policies or to opt to nonrenew the policies. These rules are found primarily in Section 551 of the Texas Insurance Code.

To begin with, one rule found in Section 551.052 says that an insurance company cannot cancel a liability policy that is a renewal or continuation policy. This makes sense, otherwise, why would anybody buy this type of policy.

Another rule in this section says that an insurance company may not cancel a liability policy during the initial policy term after the 60th following the date the policy was issued. So if you buy a one year policy on September 15, it cannot be cancelled after November 15.

The next question would be - is there ways for the insurance company to get around these rules. The answer is yes. There are four basic reasons for cancellation that get around the above rules.

The first is (1) fraud in obtaining the coverage. In other words, the person applying for insurance, lied about something. The second is (2) failing to pay premiums when due. This should not be hard to understand. You don't pay, you lose the coverage. Third (3) there is an increase in the hazard that is within your control that would produce a rate increase. A good example here is getting a bunch of speeding tickets if the coverage is auto liability coverage. (4) The fourth has to do with reinsurance and is seldom going to apply.

Section 551.053 of the Insurance Code requires the insurance company to give at least a ten day written notice of the cancellation prior to the cancellation taking effect. This notice must be given to the first named insured person on the policy to the address shown on the policy.

On nonrenewals, Section 551.054 says the insurance company must mail the notice of nonrenewal to the first named insured under the policy at the address shown on the policy. This notice must be delivered or mailed not later than the 60th day before the date on which the policy expires. If the notice is delivered or mailed later than the 60th day, then coverage remains in effect until the 61st day after the notice is sent.

Section 551.055 requires the notice for cancellation or nonrenewal to state the reason. Further, the statement must comply with Section 551.002(b) and (c), and the rules required under 551.002(d). These rules concern increases in premium payments.

Cancellation and nonrenewal of insurance policies are prime areas of litigation. The insurance companies frequently violate the law in this area. An experienced Insurance Law Attorney can give good advise about these rules if you find your claim being denied because your policy was cancelled or nonrenewed.

The Texas Department of Insurance has a web site that provides some useful information when an insurance company goes into receivership. An earlier blog at this site discusses the financial situation that will result in an insurance company being placed in receivership.

Other than the claims handling process, there are two main questions most people will have concerning their insurance policies when their insurance company is taken over by a receiver. The first is, "What happens to my unearned premium?", and the second is "What happens to my coverage and benefits?".

Unearned premium is the amount you paid to the company in advance that did not actually buy coverage. For instance, if you bought a six-month policy and paid all the premiums in advance, but the company failed two months later, you would be due a refund for four months of premiums.

If a property and casualty company fails, the receiver will refund any unearned premium to you, minus any applicable fees, up to a maximum of $25,000. To get a refund, you must ask for it in writing or on a proof-of-claim form. You can request this form from the receiver if he does not send one to you automatically.

Life and health coverage will normally continue after a company fails, so there is usually no unearned premium to refund

If your insurance company is placed in receivership, the outcome of your coverage and benefits will vary depending on the type of policy you have. Here are a few examples:

Life, health, and annuity policies: The life and health guaranty association must keep paid-up life policies and annuities in force. The association must also keep guaranteed renewable life and health policies in force as long as you pay your premiums. The association may nonrenew other policies at the end of the policy period.

Health care coverage: Health insurance that cannot be canceled by the insurance company will continue if you pay your premiums. Medical providers may not demand payment from you, other than your usual copayments.

If you have an HMO - you are not protected. You need to find new health care coverage as soon as possible.

Property and casualty policies: The court will cancel your policy. If you pay your premium, the policy will stay in effect for at least 30 days to allow you to find new coverage. The guaranty association will pay valid claims incurred during this period.

Workers' compensation benefits: The association will continue paying your benefits.

Pension plan benefits: The rules will vary here.

Bottom line is that if your insurance company is placed in receivership and taken over by a guarantee company, you need to consult with an experienced Insurance Law Attorney in order to make sure your rights and assets are properly protected.

Let's say you buy an insurance policy in Dallas or Grand Prairie. You drive over to Fort Worth or Arlington. You actually live in Weatherford or somewhere else in Parker County. Next, you incur a loss that you believe is suppose to be covered under the insurance policy you bought. Okay so far, but you call the insurance company to file a claim and you get told that the company has been having financial problems and is possibly going out of business. What happens now? The result will be the same no mattter where you are in Texas.

Most businesses that need protection because of financial problems they are experiencing file for some form of bankruptcy protection. When an insurance company has severe financial problems they are placed in receivorship.

There are two main classifications for a financially troubled insurance company in Texas. The first is called, "impaired", meaning that the insurer does not have admitted assets at least equal to all its liabilities together with the minimum surplus required to be maintained under the insurance code. The second is, "insolvency" or "insolvent", which means an insurer: (A) is unable to pay its obligations when they are due; (B) does not have admitted assets at least equal to all its liabilities; or (C) has total adjusted capital that is less than that required under various chapters of the insurance code.

The current claims and new claims received when a company is having financial problems are handled by a "Special Deputy Receiver". The failed insurance company transfers all of its outstanding claims to this "receiver". The receiver mails out information about filing claims, including deadlines.

The receiver has the same investgative and payment guidelines and requirments as the failed insurance company. However, Court-ordered deadlines, company restructuring, or poor company records could delay payments.

The biggest negative is that the payments from the receiver have limits that would not apply if the company were not in receivership. On the other hand, these limits are not going to apply to the majority of claims.

No matter how much you try, it is unlikely that you would understand the claims process when a company goes into receivership. It not that it is that difficult, it is just that it is something different. Only an experienced Insurance Law Attorney is going to be able to help you navigate through the claims process when an insurance company goes into receivership. Without the assistance of an attorney, you are going to feel like you got taken advantage of. Furthermore, this is a time when lots of mistakes will probably be made by the receiver, which entitles you to more compensation as penalties, for the wrongs that are committed.

More information about what happens when your insurance company fails can be found at the Texas Department of Insurance web site.

One of the most significant Texas cases discussing Texas Insurance Law as it relates to underinsured auto coverage was decided in 2006. This Texas Supreme Court case was Lilith Brainard, et al., v. Trinity Universal Insurance Company.

This case involved a head-on collision with a rig owned by a company called Premier. The ultimate decision in the case would have been the same regardless whether the accident occured in Dallas, Fort Worth, Arlington, Weatherford or anywhere else in Texas. Brainard was killed in the wreck. He had an underinsured policy with Trinity. Brainards' widow and children made a claim for benefits from Trinity and also filed a lawsuit against Premier.

Trinity paid the $5,000 Personal Injury Protection benefits under the policy immediately but nothing on the underinsured portion of the policy. Brainard settled the claim against Premier for the policy limits of $1,000,000. Brainard then requested that Trinity pay its underinsured policy limts of $1,000,000. Trinity refused but did offer $50,000. Brainard proceeded to trial and got a judgment wherein the jury awarded damages of $1,010,000 in actual damages.

Since Trinity had not paid the money under the insurance contract, Brainard demanded that Trinity pay the remaining $5,000 in actual damages (they got a credit for the $5,000 of PIP previously paid and the $1,000,000 settlement from Premier), plus $100,000 in attorneys fees and interest on the entire $1,010,000.

The significance of this case is that the Supreme Court ruled that Trinity had not broken its insurance contract with Brainard and thus there was not a claim for attorneys fees. In explaining this the Court said that there was no obligation under the insurance contract to pay underinsured benefits until Brainard had won in Court. And that as long as Trinity paid the amounts awarded in court within thirty days of the judgment, there was not a breach of contract.

This case essentially took away, Breach of Contract claims for situations wherein an insured makes a claim against their insurance company for benefits and the benefits are denied. A lawsuit can be filed and the monies eventually recovered in the lawsuit but as long as the insurance company quickly pays, the amount they have to pay is limited.

There are other lessons to be learned from this case that are significant for an attorney when advising a client how to proceed against their insurance company. Only an experienced Insurance Law Attorney is going to understand these distinctions and be able to properly advise a client.

All of the states in the United States have some State agency or board that oversees and regulates insurance activity in that State. In Texas, that agency is the Texas Department of Insurance.

Whenever a person has problems or concerns about the way they are being treated or the behavior of an insurance company or an insurance agent the best advice for that person is to talk with an Insurance Law Attorney. The web site for the Texas Department of Insurance is a good resource and a place to visit in order to learn a little bit of general information. Just keep in mind that visiting the web site is not a replacement for good legal advice.

The web site information is available in Spanish. So, if you have a Spanish speaking friend or relative who wants to seek information on their own they can still go to the Texas Department of Insurance web site. But then, speak with an Insurance Law Attorney who has personel who speak Spanish.

The site has information on insurance company agents and adjusters. It is surprising how often one can find agents who are not licensed. The web site has information about which of the licenses that the agent or adjuster carries. If you find that you have been dealing with an agent (most common) or an adjuster who is not licensed you should contact an Insurance Law Attorney immediately.

This site also has information pertaining to licensing requirements. There is general media information and information interesting to researchers. There are bulletions posted and information on the various codes and rules.

One important source on the site is a section for filing a complaint on-line against a company or agent. This source is good and most all complaints are followed up. The good thing is getting your complaint on record. The bad thing is, there is usually very little done. The number of investigators versus the number of companies is not good. Paperwork is almost always generated to the subject of the complaint and there is almost always a response to the complaint, a copy of which is forwarded to the person who complained. But very little beyond that. Again, this is where an experienced Insurance Law Attorney comes into play.

Another important resource at the web site is the Texas Insurance Code and the Texas Administrative Code. Both these resources are invaluable for Insurance Law Attorneys. A person reading them will gain some perspective but would be making a mistake relying on anything said in these resources without also having the legal training to understand how the laws in these books work in everyday life.

There is lots of other general information on companies, policies, pricing, rates, histories, etc. If you have the time or inclination there is a lot to be learned by visiting the Texas Department of Insurance web site. Just keep in mind that the informatio is general in nature for the most part and that follow up with professionals in insurance should be the next step.

The Fort Worth Court of Appeals recently decided a case wherein the Court had to apply Texas Insurance Laws and Texas Labor Code Laws in interpreting an insurance policy. The case was, Paul Robertson v. Home State County Mutual Insurance Company.

In this case, Robertson was an employee of a company called Redi-Mix. Robertson was injured while on the job for Redi-Mix. Redi-Mix had a policy of insurance with Home State. The policy in relevant part said that it provided coverage for "all sums an insured legally must pay as damages because of bodily injury or property damage to which the insurance applies". The policy contained the following relevant exclusion to which coverage did not apply:

3. WORKERS COMPENSATION
Any obligation for which the insured or the insured's insurer may be held liable under any workers compensation, disability benefits or unemployment compensation law or any similar law.

Robertson sued Redi-Mix and Home State and obtained a judgment against Redi-Mix for $967,631.52. The claim against Home State was separated by the Court. Home State made legal arguements based on the above portions of the policy that Home State did not have any liability under the policy and that the case against them should be dismissed. It was dismissed and this appeal followed.

Redi-Mix did not carry workers compensation insurance. Based on this, Roberstson said the above Workers Compensation exclusion did not apply. Home State argued that the workers compensation exclusion did apply because this claim arose under the Texas Workers Compensation Act. This law is found in the Texas Labor Code, Sections 406.031 thru 406.035.

The arguement about whether or not the Workers Compensation exclusion applied eventually came down in favor of Home State and was upheld by the Fort Worth Appeals Court. Thus, Redi-Mix became fully liable for the injures suffered by its employee rather than Home State having to pay the claim. What is most relevant here is that reading of the policy dealt not only with insurance laws but also how those insurance laws applied to Texas labor laws. This serves as another example why an experienced Insurance Law Attorney is needed to offer legal advise on interpretation of Texas Insurance Policies.

The Texas Supreme Court stated in 2008 that insurance policies are contracts. This was stated in the case Ulico Casualty Company v. Allied Pilots Association. This is not new in Texas. In the Ulico case the court cited earlier Texas case law. The earlier case law was a Texas Supreme Court case styled Barnett v. Aetna Life Insurance Company and was decided in 1987.

What this means is that rights and obligations arising from an insurance policy, and the rules used to construe them, are those rules generally pertaining to contracts. One relevant concept here is that when a court construes or tries to interpret a contract and that contract can be read to mean more than one thing, then the interpretation is suppose to be in favor of the party who did not draft the contract. The burden is on the party drafting the contract to make it clear. Since an insurance company is always the party who drafts the insurance policy, the result is that if the reading of the policy can be interpreted in more than one way, the court is supppose to interpret it in such a way as to find coverage under the policy.

When an insurance contract covers certain risks, such as liability, but the policy contains exclusions or limitations of coverage, then when the insured customer makes a claim for coverage benefits, the insurance company must assert any applicable exclusion or limitation to avoid liability. This would be called an avoidance or in the Texas Rules of Civil Procedure it is called an affirmative defense. The burden of proof here then falls on the insurance company. This law is found in the Texas Insurance Code, Section 554.002.

The insurance company has neither a "right" nor a burden to assert noncoverage of a claim until the insured policy holder shows that the claim is covered by the terms of the policy. Once the insured policy holder does so, then it becomes incumbent on the insurance company to assert any limitations or exclusions as an affirmative defense. This is done using rules pertaining to contract interpretation.

All of this can be confusing and convoluted even if it is something you are used to dealing with on a regular basis. An experienced Insurance Law Attorney knows how to read an insurance policy and apply that policy to the other issues in the claim and then provide proper advice on the best way to proceed with a case.

The Court of Appeals of Texas, Houston (1st Dist), recently handed down a decision that dealth with interpreting an insurance policy here in Texas. The case was, National Fire Insurance Company of Hartford, as Assignee of Kelvin Ray Gatlin v. State and County Mutual Fire Insurance Company. This case should have had the same result whether it was decided in Dallas, Fort Worth, or anywhere else in Texas.

This case arose out of an auto accident on December 23, 2000. A 1994 Ford Ranger driven by Gatlin ran a red light and damaged a truck owned by Rainbow Play Systems and insured by National Fire Insurance.

State and County denied coverage on the accident and National Fire filed a subrogation suit against Gatlin to recover the monies paid to Rainbow for damage to their truck. National took in excess of a $42,000 judgment against Gatlin. National then got Gatlin to assign to National the claim Gatlin had against State and County for State and County denying the claim. This assignment included claims for breach of contract, a Stowers action, and violations of the Insurance Code.

The main fight here was whether or not State and County was acting properly when it denied coverage to Gatlin. State and County alleged that Gatlin had purchased the policy on December 19, 2000 and at the time of purchase had not informed State and County that he owned the 1994 Ford Ranger. State and County pointed out that the policy did not cover the vehicle unless it was listed on the policy at the time the policy was purchased and that Gatlin did own the vehicle at the time the policy was purchased but he failed to list it. State and County alleged the vehicle was purchased on October 29, 1999 by Gatlin.

Without getting too technical here, the case got into argueing about evidence and hearsay and the proper form of affidavits. What is important is that State and County was argueing that coverage denial was proper because of a listed exclusion in the policy it had issued. To prove the applicability of an exclusion to insurance the burden of proof is on the insurance company according to Texas Insurance Code, Section 554.002.

In this case, the court ruled that State and County had not properly met the burden placed on them by Section 554.002. When a claim is denied by an insurance company, most people are not in a position to realize or understand whether or not the actions of the insurance company are legal or proper. Anytime an insurance company denies a claim you should seek the advise of an experienced Insurance Law Attorney to insure that you are not being cheated.

Texas insurance laws often times require that the insurance company issueing a policy, sell certain types of insurance with at least a minimal amount of coverage. The situation most people are familiar with is that related to automobile insurance coverage. In Texas, according to Texas Transportation Code, Section 601.072, a person cannot legally drive a car unless they have at least $25,000 worth of liabilty coverage. Texas Transportation Code, Section 643.101 requires a minimum amount for tow trucks, Section 643.1015 requires a minimum for school buses, and throughout the Texas Insurance Code and the Texas Transportation Code minimal required limits are spelled out depending on the vehicle driven.

Other types of insurance may have minimums or caps that are required. In other situations, there may not be a minimum that is required by law, rather there is a minimum that is purchased by the person seeking the insurance. These other types of insurance could be homeowners policies, commercial policies, medical malpractice policies, and many others.

What happens if a person's losses exceed the minimum the insurance company is required to pay? There are three main options here. The first is to accept the amount the insurance company actually has to pay and walk away. The second is to accept what the insurance company actually has to pay and then pursue the individual or company who is insured for the differerence still owing. This is usually (not always) futile in that the individual or company does not have any assets worth seizing to satisfy a judgment beyond what the insurance company pays. The third is one where you would be required to have an experienced Insurance Law Attorney.

This third option comes into play when presented with a "Stowers" situation. Briefly, a Stowers situation is where the insurance company is given the chance to settle the claim for an amount equal to or less that the policy limits. When the insurance company refuses to pay a reason demand that is equal to or less than the policy limits then the insurance company could be subjected to a situation where they have to pay more than the policy limits.

For a Stowers demand to pay, to be proper and legal, there are certain requirements that must be met. These requirements were discussed in the Texas Supreme Court case, Trinity Universal Insurance Company v. Bleeker. This case requires certain wording regarding releases and certain time frames within which to operate and investigate and accept the claim being made. These requirement have changed over time from that which was required in the original Stowers case. Only an experienced Insurance Law Attorney is going to be aware of these changes. In the proper case, where a Stowers demand was made and rejected, an injured party can recover from the liability insurance company an amount way over the actual amount of insurance coverage.

Did you know that there is a law in Texas which requires a health care service provider to bill the patient or other responsible person for services, not later than the first day of the 11th month after the date the services are provided. This law is found in the Texas Civil Practices & Remedies Code, Section 146.002.

Whether a patient receives care at a hospital or clinic in Dallas, Texas, or in Arlington, Grand Prairie, Weatherford, or anywhere else in Texas, the health care service provider is required to bill the patient or the issuer of health benefits plan for services within the time frame set out above. An exception would be the unlikely event that the contract between the health care provider service provider and the health care insurer provide a longer time to submit the bill for services. It is an unlikely for this exception to exist because from a practicle standpoint, no health care service provider is going to sign a contract requiring them to wait longer than 11 months before getting paid.

If the health care service provider is required to directly bill the third party payor who is operating under State or Federal law, including Medicare and Medicaid, the requirement is the same as stated above.

The context under which a health care service provider does not immediately bill for their services is usually going to arise in two situations. The first is, they forget about it. In other words the patient is seen and treated and the paperwork gets lost or set aside and the office simply makes a mistake in not sending in the bill for services. The second way it arises is where the provider learns of or believes the treatment arises from an accident wherein a 3rd party insurance company is going to have to pay the medical expenses of the injured patient. The normal situation for this is in the car wreck cases.

In a car wreck situation the medical provider treats the injured party then sends them the bill rather than billing the injured persons insurance provider. The health insurance company, whether it be a company like Blue Cross / Blue Shield or Humana, or Medicare or Medicade is going to pay substantially less on the bill because of the discounts they get. The 3rd party insurance is not entitled to the discounts and thus may be liable for much greater amounts including the total bill. Discounts can be as high as 90%. At first this may seem ok but, what if, in the end, say a year later, there is not a recovery in the car wreck from the 3rd party insurance company.

When Section 146.002 is violated, then Section 146.003 becomes applicable. Texas Civil Practice & Remedies Code, Section 146.003 says when 146.002 is violated, the health care service provider may not recover from the patient any amount that the patient would have been entitled to receive as payment. This means that the debt goes away.

This is another example where an experienced Insurance Law Attorney can make sure that a person is not taken advantage of, by an insurance company or a health care service provider.

Whether you live in Dallas, Fort Worth, Arlington, Grand Prairie, or any other metroplex city, or in a smaller town such as Weatherford, Granbury, Cleburne, or Azle here is something that happens just about every day. An accident occurs because of someone elses negligent actions. Someone is injured and gets medical treatment. The medical treatment is paid for by the injured persons' health insurance, such as Blue Cross Blue Shield, Humana, Prudential, or any number of other health insurance companies. Maybe the medical care is paid for by the injured persons' own auto insurance company through the personal injury protection (PIP) benefits or med-pay benefits. Most property insurance like homeowners policys and commercial policys have some sort of med-pay that pays for injuries.

In most these cases, someone else, or someone else's insurance company is ultimately responsible for the injury that was incurred. The medical benefit that was used to pay bills is seldom going to pay all the bills. The injured person still has co-pays and deductibles to meet and sometimes there are caps on what is paid. Also, these medical benefits do not pay lost wages or anything for pain and suffering or anything for impairment or disfigurement or scarring that may have resulted from the injury. As a result of these other losses, even the person who does not want to "sue" anybody has to make a claim against the responsible people and their insurance company to recover all their losses.

When the injured persons' insurance pays for a loss that was ultimately the resposibility of the other person or the other persons' insurance, the injured persons' insurance has a subrogation right to the monies received from others. In other words, the injured persons' insurance has to be paid back and there is no legal, double recovery.

In the car insurance scenario, Texas Insurance Code, Article 5.06-1, creates a statutory and contractual right of subrogation against a third party motorist to recover uninsured and underinsured motorist benefits the insurance company makes to its customer. It says that if an insurance company makes a payment to any person under this coverage, the insurer is entitled to recover up to the amount of the payment from the proceeds of any judgment or settlement with the person.

In the health insurance situation, this is found in Texas Insurance Code, Section 1506.301. For property and casualty insurance, this law is found in Article 21.28-C.
This subrogation right also applies to Workers Compensation Laws, Veterans Benefits, Medicare, and Medicaid, and dozens of other situations.

What is important to realize here is two things; 1) that these laws exist and if they are not properly taken into account it can cost the injured person even more, and 2) an experienced Insurance Law Attorney can handle these situations for you and often times defeat the law requiring that the monies be repaid or atleast reduce the amount that has to be paid back to the entities.

PIP coverage is comparable to Medical Payments Coverage in a Texas Insurance Policy in that both are no-fault and pay for similar expenses. The difference between the two is this: Medical Payments Coverage only pays for reasonable and necessary medical expenses. PIP pays for that and up to 80% of lost wages, both to a maximum of whatever the amount of coverage is that has been purchased. Their similarity is that both are nofault coverages.

Texas Insurance Code, Article 5.063(b) sets up PIP coverage as a quick source (payable with 30 days of providing the information needed to pay the claim) of funds for an insured accident victim when the losses are for medical expenses or lost wages. The legal minimum is $2500, but much higher amounts can be purchased. The highest this writer has seen by an individual is $50,000.

PIP coverage exists in every automobile policy automaticly, unless rejected in writing by each insured. This is firmly established in Texas law in the cases, Ortiz v. State Farm Mutual Automobile Co., and Old American v. Sanchez.

As stated earlier, PIP pays for two types of losses; 1) reasonable and necessary medical expenses, (and funeral), and, 2) 80% of a covered persons' loss of income from employment. This benefit applies only if, at the time of the accident, the covered person, a) was an income producer, and b) was in an occupational status.

Lost wages under PIP benefits is not usually challenged by an insurance company as long as if can be verified and that is usually easy to do through an employer. However, it is challenged routinely when the claimant is self-employed or someone who is paid on a commission basis.

PIP claims for reasonable and necessary medical benefits are challenged routinely except when the bills are emergency room related. After the E/R care, at a physical therapist or chiroprator is often challenged by the insurance company as not being necessary. And the charges from these, after the E/R providers, are also challenged. Seems kinda reversed considering how high these charges are compared with the E/R.

Lawsuits from a denial of PIP benefits are common. Whenever it happens, the advise of an experienced Insurance Law Attorney will usually get the benefits paid, plus court costs, plus attorneys fees.

Most people have heard the terms, "Good faith", "Bad faith", "The duty of good faith and fair dealing", and "Statutory bad faith". The question would be: What do these terms mean and why do we care? In Texas, as in many other states, the duty of an insurance company to its customer, at least in the automobile and homeowners' policies, go beyond just what the policy says.

Statutory bad faith is violation of statutes found in the Texas Insurance Code. These statutory violations are primarily found in Section 541.060 and Section 541.061.

Common-law bad-faith and statutory bad faith standards are essentially the same according to the Texas Supreme Court in their deciding of Progressive County Mutual Insurance Co. v. Boyd.

It is bad faith for an insurance company to engage in unfair settlement practices which also gives rise to a cause of action under the Texas Deceptive Trade Practices Act. The following acts are examples of these unfair claim settlement practices:

1) Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to the coverage at issue;
2) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;
3) Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims submitted once liability has become reasonably clear;
4) Failing to adopt and implement reasonable standards for prompt investigation of claims arising under its policies;
5) Compelling policyholders to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them;
6) Failure by any insurer to maintain a complete record of all the complaints which it has received during the preceding three years or since the date of its last examination by the commissioner, whichever time is shorter.

What about common-law bad faith? This arises when an insurance company has no resonable basis for denial or delay of payment or fails to reasonably investigate its basis for denying a claim. Now one has to understand the meaning of the phrases "liability becomes reasonably clear" and " reasonable basis for denial". These definitions are sources of continueing litigation to determine their exact definitions.

The problem for the almost everybody who purchases insurance for their own protection is all the above. Why? Because only an experienced Insurance Law Attorney can have an educated basis for deciding if a particular case has elements of bad faith in it and whether or not the facts in a case justify legal action against an insurance company. The good news is, in spite of what seems complicated, an aggressive Insurance Law Attorney can get justice for his client, reimbursement for legal expenses, court costs, and sometimes extra damages for the nature of the insurance companies conduct exceeding certain boundaries.

Whether you purchase your insurance policy in Dallas, Texas, or in Fort Worth, Arlington, Grand Prairie, Weatherford, or anywhere else in Texas, there is one thing you can count on. The policy of insurance that you purchase is going to require that you notify the insurance company "immediately" or "as soon as practicable" whenever there is an occurrence or an offense that may result in a claim. If you fail to do so, the one thing you can almost always count on is that the insurance company is going to deny your claim for benefits.

What if your failure to timely notify your insurance company of the claim or occurrence results in no harm to the insurance company? You still violated a policy provision by not notifying the company in the time frame in which the policy requires you to notify them. Do you lose? Is your claim for benefits lost?

This issue was addressed in the case PAJ, Inc. v. Hanover Ins. Co. This was a Texas Supreme Court decision. The issue for the court to decide was whether a policy holder who failed to timely notify its insurance company of a claim defeats coverage under the policy if the insurance company was not prejudiced by the delay. Prejudiced meaning, the insurance company suffered no real harm or loss due to the delay in being notified of the claim.

In PAJ, the policy contained a prompt-notice provision that required PAJ to notify Hanover of an occurrence or an offense that may result in a claim "as soon as practicable". The claim was a type that PAJ did not believe was covered by the policy and because of that belief did not notify Hanover. It was not until about six months after a lawsuit had been filed that PAJ learned that the Hanover policy would cover PAJ. Hanover denied the claim for PAJ's failure to timely notify Hanover. In other words, Hanover said that PAJ broke its contract with Hanover by not notifying them in the time frame specified in the insurance contract.

The issue for the court here was: Was this breach of the contract (insurance policy) material or in other words did this failure to comply with the policy terms cause real harm to Hanover? The supreme court concluded that there was no real or material harm to Hanover and thus PAJ's failure to timely notify Hanover of the claim did not defeat coverage.

For Hanover to have prevailed in this matter, Hanover would have had to convince the court that they were harmed by the delay in notifying them and in this case, they were unable to show any harm. This case serves as another example why a person needs to have an experienced Insurance Law Attorney review and look at these cases involving insurance companies any time they deny a claim for benefits.

Venture Encoding Service, Inc. v. Atlantic Mutual Insurance Company is a Texas Appeals Court case wherein the Fort Worth Court of Appeals made a decision in a dispute between a policy holder and its insurance company. The dispute was one of policy interpretation.

The basic facts were that Venture, a printing company, made a printing error in the publication of 328,799 coupon books. The error was the printing of an incorrect lock box payment return address. The cost of re-printing and re-mailing the coupons books was $122,888.

Venture, who had a commercial general liability policy and an errors and omissions policy with Atlantic, made a claim for the $122,888. Atlantic denied the claim stating that the wording of the policy did not cover the type of loss that was incurred by Venture. The wording of the policy used to describe "property damage" was what was at issue. Plus, Atlantic cited an exclusion in the policy as another reason for denying the claim.

When an insurance company denies coverage on a claim and a lawsuit is filed, the insurance company has the burden of proof as to its reasons and defenses for denying the claim. The Texas Insurance Code, Section 554.002, is where the law can be found that puts this burden on the insurance company.

In general, this meant in this case that Venture had the initial burden of showing that there was coverage under the insurance policy and Atlantic had the burden of proving the applicability of the exclusion that it says permitted it to deny coverage. Once Atlantic proved the applicability of the exclusion, the burden of proof shifted back to Venture to demonstrate they had coverage under an exception to the exclusion.

Is the above confusing? Yes, even if you deal with these issues on a regular basis. Here, there was a fight over what "property damage" meant and a fight over whether exclusions written in the policy applied, taking into account the facts of the claim. Venture won this fight and was awarded the money, plus attorneys fees, and court costs.

The main idea for the reader to keep in mind is that when an insurance company denies a claim for "any" reason, they should get an experienced Insurance Law Attorney to review their case. It is routine for an insurance company to deny a claim and in the denial letter highlight a portion of the policy they believe justifies their denial of the claim. This letter is meant to seem to be a final determination and that pursueing the matter further is a waste of time.

It is common for an insurance company to take policy language out of context to justify their denial of a claim. It is also common for an insurance company to cite an exclusion that simply is not applicable to the facts of the claim. Get your own opinion before accepting the reasoning and statements of the insurance company.

Texas insurance companies are regulated by the Texas Department of Insurance. The written laws for most insurance companies are found in the Texas Insurance Code. These laws and regulations apply to all insurance companies in Texas. So whether the company is located or does business in Dallas, Fort Worth, Arlington, Irving, Grand Prairie, Carrolton, Mesquite, Weatherford, Granbury, or anywhere else in the State of Texas the same laws and regulations apply to the insurance company.

The worst acts of insurance companies may be criminal in nature, but the majority are violations of civil laws and statutes, and what are being addressed in this writing. Violations of these civil laws and statutes may result in fines to the companies and issuance of cease and desist orders, and revocation of licenses or suspensions of insurance licenses. Most of the penalties just mentioned are enforced through the Texas Department of Insurance or the Texas Attorney Generals Office.

The recourse for insureds against their own insurance companies for violations to them personally, are addressed in different parts of the Insurance Code and depend on exactly which statute the insurance company violated. Punishment for violations of Insurance Code, Chapter 541 are found in Section 541.152. Here, the plaintiff who prevails in their cause of action may obtain: 1) the amount of actual damages to the plaintiff, plus court costs and reasonable and necessary attorney's fees, and 2) any other relief the court determines is proper. What is important here and in other statutes that allow for the recovery of attorneys fees, is that if your cause is just and right, that at the end of your case, you can recover your court costs and attorneys fees. This is also why it is important to seek an experienced Insurance Law Attorney so that they can inform you whether you have a case worth pursueing.

If you are like most people, you might say "is that all, the insurance company cheats me, and all they have to do is pay what they should have paid in the first place plus my attorney and they just walk away". The answer to that is - it depends. If your case is the type that a Judge or Jury would find that the insurance company acted "knowingly". Then you could be entitled to an amount up to three times your actual damages. "Knowlingly" is defined in Section 541.002 as having an actual awareness of the falsity, unfairness, or deceptiveness of the act or practice on which the claim is based. This on its face seems fairly simple but the courts of this State make it much more difficult than it seems. This is another example or reason why an experienced Insurance Law Attorney is needed to look over a case.

Violations by the insurance companies of Subchapter B, Prompt Payment of Claims Act, are found in Section 542.060 of the Texas Insurance Code. In this section, an insurance company is liable for the amount of the claim, plus interest on the amount of the claim at a rate of 18% a year as damages, together with reasonable attorneys fees and court costs.

Depending on the nature of the wrong by the insurance company, the insurance company may also be subjected to liability for causes of action outside of the Insurance Code. Some of these other causes of action would be: 1) Breach of Contract, 2) Fraud, 3) Negligence, and 4) Misrepresentation, to name just a few. Plus, depending on the severity of their conduct the insurance companies could be subjected to punitive damages.

When it comes to holding an insurance company accountable for its actions, the law has a lot of "teeth" to it. However, a person is well advised to seek an attorney who regularly deals with Insurance Law to make sure their rights are fully protected and the insurance company is not getting away with doing wrong.

The recourse that a Texas insurance policy holder has against their insurance company depends on exactly what it is that the insurance company does that is wrong or illegal. The types of wrong that can be committed by insurance companies are too numerous to mention all of them here. However, there are a few wrongs committed by insurance companies that policy holders should be aware of when dealing with their insurance agent or the insurance company.

Again, keep in mind that there are many wrongs that can be committed by an insurance company. The most wrongs that can be found without reading all the laws related to insurance can be found in the Texas Insurance Code Section 541.051, Section 541.060 and Section 542.003.

These Sections are appropriately found in Subtitle C of the Texas Insurance Code which is titled "Deceptive, Unfair, And Prohibited Practices". Section 541.051 is in Chapter 541 and titled "Unfair Methods Of Competition And Unfair Or Deceptive Acts or Practices".
Under this section is the law saying an insurance company cannot misrepresent to you the terms of a policy, the benefits or advantages promised by a policy, or make any misrepresentations regarding dividends or sharing of other monies on the policy. This section makes it illegal for an insurance company to make a misleading representation or misleading statement regarding the financial condition of an insurance company. It also makes it illegal for an insurance company to use a name or title of a policy that misrepresents the true nature of the policy.

Section 541.060 is titled "Unfair Settlement Practices". This section is a common area of litigation and there are volumns of information that can be written about this section and will be the subject or future articles. Here, is where the insurance laws of Texas make it clear that an insurance company cannot; 1) misrepresent policy provisions relating to the coverage at issue, 2) fail to attempt in good faith to accomplish a prompt and fair settlement when the insurance companies liability has become reasonably clear, 3) fail to make clear to the policy holder a reasonable explanation of the reason within the policy itself why the insurance company is denying the claim, 4) fail to within a reasonable time affirm or deny coverage of a claim. The insurance company also cannot: 5) refuse of delay payment of a claim under the policy based on the belief there may be coverage under another policy, 6) refuse to pay a claim without conducting a reasonable investigation, 7) require a policy holder to produce a copy of their tax returns unless the claim involves a fire loss or the claim involves lost profits or income. This is just a portion of relevant law under Section 541.060.

Texas Insurance Code, Section 542.003 is found in Chapter 542, Subchapter A. Chapter 542 is titled "Processing And Settlement Of Claims". Subchapter A is titled "Unfair Claim Settlement Practices". Section 542.003 is titled "Unfair Claim Settlement Practices Prohibited". The titles speak for themselves.

Under 542.003 it is made illegal for an insurance company to engage in an unfair claim settlement practice. The following are acts constituting unfair claim settlement practices; 1) knowingly misrepresenting pertinent facts or policy provisions relating to coverage, 2) failing to acknowledge with promptness communications relating to a claim under an insureds policy, 3) failing to have and implement reasonable standards for the prompt investigation of claims, 4) failing to effect a prompt and fair settlement when liability has become reasonably clear and, 5) causing a policy holder to file a lawsuit to recover monies due under a policy because the insurance company was offering substantially less than what was ultimately recovered in the lawsuit.

The above is just a sample of some of the laws insurance companies must follow. These were chosen as an example because of their central location. There are many other located throughout the Insurance Code plus there are many more in other law books. All serve as reasons why anyone having problems with an insurance company should seek an experienced Insurance Law Attorney to make sure their rights are protected. Whether you are in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or anywhere else in Texas, only an experienced Insurance Law Attorney is going to fully understand and know about all the laws that may apply to any given situation.

An insurance company in Texas has a duty or responsibility to people who purchase insurance. When dealing with one its customers / insureds it has a duty to that person. This is referred to as the "duty of good faith and fair dealing". When an insurance company violates its duty of good faith and fair dealing it is call "bad faith".

There are laws in the Texas Insurance Code that set out acts that insurance companies cannot legally do. In addition to setting out prohibited acts and practices there are punishments the insurance companies face for violations of their duties to their insureds. The punishments will vary depending on the degree of culpability or wrong that is committed.

A 2008 case discussing some of the above is Texas Mutual Ins. Co. v. Ruttiger. This is a case that occurred in Galveston, Texas and was decided by a Houston Court of Appeals. The same law would apply whether it happened there, or in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or anywhere else in Texas.

Ruttiger is a case involving an on the job injury but the way the insurance company handled the claim is applicable to all insurance claims. In Ruttiger, the employee, Timothy Ruttiger, claimed an on the job injury that occurred when he stumbled after picking up a load of metal conduit. His employers insurance company claimed that Ruttiger actually got hurt the previous week-end playing softball. The issue was not only a question of where the injury occurred but the way in which the insurance company investigated the claim.

The insurance company always has a duty under the Texas Insurance Code, Section 541.060 to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim, and to do so within a reasonable time. This is to be done by conducting a reasonable investigation with respect to the claim. The jury found that Texas Mutual had failed in its duty.

The law mentioned above has to be applied to the facts of each case. An experienced Insurance Law Attorney knows how the facts in a case and the applicable laws are likely to be applied by the court. Putting the two together properly allows an attorney to give reliable advice to their client.

There are many, many types of insurance that a person can purchase. The types most people first think of are life insurance, home owners insurance, and auto insurance. Beyond these you have health, disability, credit, commercial, flood, etc.

Every State has their own laws regulating insurance plus there are Federal Laws that apply to the States. Further each type of insurance, such as those listed in the prior paragraph have laws that are specific to that type of insurance in addition to the general laws of insurance that may exist at the State and Federal level.

The laws dealing with and regulating auto insurance can be found in some obvious places, such as the Texas Insurance Code and at the Texas Department of Insurance. An attorney in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or anywhere else in Texas may not even know that the Insurance Code exists. As for the Texas Department of Insurance, most attorneys would know there is an agency that deals with insurance that is run by the State but may not know its name.

Even attorneys who dabble a little bit in Insurance Law may not know that another valuable source of knowledge and research for Insurance Law is the Texas Administrative Code. And very few would know that laws applicable to insurance are found in other law books besides the ones already mentioned.

Lets look at Insurance Law dealing with autos as a brief example. Suppose you have an auto totaled in a wreck that is sitting in storage or a car sitting in storage awaiting repairs. Where is the law saying who is financially responsible for the storage? For this you look in, of all places, the Texas Occupation Code, Section 2303.156. What about a rental car? A person was offered insurance at the time of rental but declined it and gets involved in a wreck. Is there a law dealing with this situation? Sure is! Look at this Federal Statute. United State Code, Chapter 49, Section 30106. Another statute dealing with rental car insurance situations is found in the Texas Transportation Code, Section 601.124(c).

In the Texas Insurance Code there is a specific section dealing with auto situations but all through the Insurance Code are different chapters and sections on other Insurance Law that relates to autos. Only an experienced Insurance Law Attorney knows how to navigate the laws and find answers to situations a person may face.

The rules regulating and governing inusrance agents in the State of Texas are found in the Texas Insurance Code. A source for information on a particular agent is the Texas Department of Insurance.

What exactly is an agent? An "agent" is defined in Section 4001.003 of the Texas Insurance Code, in part, as a person who is an authorized agent of an insurance company and any other person who performs the acts of an agent, whether through an oral, written, electronic, or other form of communication, by soliciting, negotiating, procuring, or collecting a premium on an insurance contract. This would include the people you are dealing with on the internet or through the mail when trying to buy insurance.

To become an insurance agent in Texas, a person must be licensed by the State. In order to be licensed by the State of Texas, a person must submit a completed application to the State with fingerprints. They must also take and pass a test showing their knowledge of the basic principles of insurance contracts, the basic laws of Texas regulating the business of insurance, and the ethical obligations and duties of an agent. Further, there are continueing education requirements.

In order to sell insurance for a company a person must receive an appointment from an insurer or insurance company. To do this a fee is paid to the Texas Department of Insurance. At this point a person has for the most part, met their requirments to sell insurance in the State of Texas.

Section 4001.051 of the Texas Insurance Code describes "Acts Constituting Acting as Agent". Basically a person acts as an agent of an insurance company if the person, (1) solicits insurance on behalf of a company, (2) receives or transmits an application for insurance or an insurance policy to or from the company, (3) receives or transmits an insurance policy of a company, (4) examines or inspects a risk, (5) receives, collects, or transmits an insurance premium, (5) takes any action in the making or consummation of an insurance contract for or with the company.

Too often, people who work in offices of insurance agents, are not themselves licensed insurance agents, even though they are doing some of the above described actions. Not only do these people make mistakes but the agents themselves make mistakes. No one is perfect, but if their mistakes cost you, the consumer, it is important to know what the laws are regulating these people in order for you, the insurance customer, to get justice.

The reason for this writing is let the consumer know that sometimes the insurance company itself did not commit a wrong in their way of dealing with the consumer. In other words, it is the action of the agent and or their employees which was wrong. If this is the case the consumer still has recourse and needs to seek the advice of an experienced Insurance Law Attorney for further advice and assistance.