Dallas Fort Worth Insurance Lawyer Blog

How does this stuff work?! That is a question someone in Dallas, Fort Worth, Grand Prairie, Weatherford, Arlington, Mansfield, Irving, or anywhere else in Texas might ask when it comes to insurance contracts and bad faith insurance.
"Insurance coverage claims and bad faith claims are by their nature independent. But, in most circumstances, an insured may not prevail on a bad faith claim without first showing that the insurer breached the contract." This was stated in the Texas Supreme Court case styled, Liberty National Fire Insurance Company v. The Honorable Ted Akin, decided in 1996.
The case is called a mandamus proceeding.
The original proceeding arose out of claims by Jennifer Broderick against her homeowner's insurance carrier, Liberty National Fire Insurance Company. On Septmeber 1, 1993, Brodrick discovered that a shifting foundation had damaged her house. She retained an engineer to identify the source of the problem. The engineer eventially concluded that a water leak under the slab had caused settling and the resulting damage.
Broderick made a claim against Liberty. Liberty sent out an adjuster who concluded that the claim was not covered. Liberty had a second engineer investigate and still denied the claim.
Broderick sued for breach of the insurance contract and for breach of the duty of good faith and fair dealing. Liberty requested that the court sever the breach of contract claim from the bad faith claim and when the court refused to do so, this mandamus action was brought.
Earlier court decisions have made clear that insurance coverage claims and bad faith claims are by their nature independent. In most circumstances, an insured may not prevail on a bad faith claim without first showing that the insurance company breached the contract.
This court spent considerable time discussing the standards that are suppose to be applied in determining whether the trial court has abused its discretion in determining whether the breach of contract claim and the bad faith claim should be severed.
With the standards in mind that the court had discussed, they held that the trial court did not abuse its discretion in denying Liberty's motion for severance. The court stated that the contract claims and bad faith claims are largely interwoven. Most of the evidence on one of the claims would be part of the evidence on the other claim. For example, evidence regarding Liberty's investigation and reasons for denial of the claim will no doubt be admissable in the contract case because the linchpin of any coverage case is the insurance company's denial of the claim. The court would assume that Liberty would introduce all evidence tending to support its contention that the claim was not covered by the policy. The court also assumed that Brodrick would offer evidence of any bias against the claim on the part of Liberty's agents, which would likely be admissable on cross-examination to test the agents' credibility and to allow the jury to determine the weight to be given to the agents' testimony.
This case stands for a couple of legal principles for an experienced Insurance Law Attorney to be aware of and one of them is that there is a difference between breach of contract and bad faith.
Another Texas Supreme Court has stated that contractual liability is not essential to establish extracontractual liability, but it helps. For example, an insurance company that owes policy benefits under the contract may also be found to have acted unfairly in refusing to pay those benefits.
On the other hand, the absence of contractual liability may disprove liability under other theories. For example, if the insurance company successfully defends a contract claim by proving the insured committed arson, the insurance company would not be liable for failing to act in good faith to settle, because the contract defense also gives the insurer a good faith basis for denying the claim.

If someone in Dallas, Fort Worth, Grand Prairie, Arlington, Irving, Mesquite, Garland, Richardson, Plano, Coppell, Mansfield, Cedar Hill, or anywhere else in Texas has a claim under their disability insurance policy denied, what can be done?
Start with the legal reality that an insurance policy is a contract. When a party to a contract is obligated by the contract to another, absolutely repudiates the obligation without justification, the obligee is "entitled to maintain his action in damages at once for the entire breach, and is entitled in one suit to receive in damages the present value of all that he would have received if the contract had been performed, and he is not compelled to resort to repeated suits to recover the monthly payments." This was stated in the 1937, Texas Supreme Court case, Universal Life & Accident Insurance Company v. Sanders.
Here are some of the facts of the Sanders case:
In March, 1928, Universal Life & Accident Insurance Company issued to Sanders a policy of health and accident insurance wherein it bound itself to pay Sanders a stipulated sum per week for sickness resulting in total disability. While such policy was in force and effect Sanders alleges she became totally and permanently paralyzed. She instituted the lawsuit to recover for payments alleged to have accrued and for the value, as of the date of the trial, of all future installments to mature during her life expectancy, which expectancy was alleged to be 27 years from and after January 23, 1933, based upon the American Experience Table of Mortality.
Prior to this case, the Texas Supreme Court had announced the rule that when a party who is obligated by contract to make monthly payments of money to another absolutely repudiates the obligation without just excuse, the obligee is "entitled to maintain his action in damages at once for the entire breach, and is entitled in one suit to receive in damages the present value of all that he would have received if the contract had been performed, and he is not compelled to resort to repeated suits to recover the monthly payments."
In this case, the court re-interated its prior rule of law and reaffirmed that Sanders could maintain her action against Universal Life for the full amount of monies she would be entitled to under the disability insurance policy even though the future amounts had not actually been due. By virtue of Universal Life denying the benefits, the entire amount became due when Sanders was successful in her lawsuit based on repudiation of the disability policy / contract.
So, what is repudiation?
This is made and reaffirmed in the 1981 case, Group Life And Health Insurance Company, decided by the Dallas Court of Appeals.
This case arose when Group Life And Health Insurance Company (Group Life) discontinued paying monthly disability benefits to an insured on the theory that the insured was no longer disabled. The principle question was whether Group Life repudiated the contract. The jury found repudiation and judgment was rendered in favor of the insured for accrued installments, future installments discounted to present value, statutory penalty, and attorney's fees.
In discussing this case the court stated, "In Texas, where a party ... obligated by contract to make monthly payments of money to another absolutely repudiates the obligation without just excuse, the obligee is entitled to maintain his action in damages at once for the entire breach, and is entitled in one suit to receive in damages the present value of all that he would have received if the contract had been performed."
They also cited other cases in saying, "Repudiation consists in 'such words or actions by a contracting party as indicate that he is not going to perform his contract in the future'." "It is conduct which shows a fixed intention to abandon, renounce, and refuse to perform the contract."
A 1976, Texas Supreme Court case, Republic Bankers Life Insurance Company v. B. L. Jaeger, says:
"The measure of damages in an action for breach of contract by repudiation is the total of all accrued payments plus interest, plus the present value of all unaccrued payments that the plaintiff would have received if the contract had been performed."
When someone has their claim for disability benefits denied by an insurance company, it is important that the policy holder seek the advice of an experienced Insurance Law Attorney.

Someone in Grand Prairie, Arlington, Mansfield, Dallas, Fort Worth, Cedar Hill, Duncanville, De Soto, Benbrook, Burleson, Cleburne, Weatherford, Granbury, or just about anywhere else in Texas might ask; What is the difference between an insurance policy and a contract!
Here is the answer - An insurance policy is a contract. Insurance policies are contracts, and as such are subject to rules applicable to the rules governing contracts. The Texas Supreme Court had this argued before them in a 1994 case styled, Hernandez v. Gulf Group Lloyds. In the case, the Texas Supreme Court affirmed this legal position regarding insurance policies.
A person who is sueing, that is, seeking to recover on an insurance contract must prove that the contract was in force at the time of the loss. Also, the person who is claiming under a policy is required to produce the insurance contract upon which he sues or to prove its terms. That is what the Tyler Court of Appeals stated in 1975, in the case Hartford Accident and Indemnity Company v. Spain.
This is easy to do. Just have a copy of the insurance policy to show the Judge. If you do not have a copy because it has been lost, then a copy can be obtained from the insurance company through the law suit proceeding. To prove a breach of the insurance contract, the Dallas Court of Appeals, in 1992, in the case, St. Paul Insurance Company v. Rakkar, stated that the insured had to establish 3 points:
1) the existence of the insurance contract
2) compliance with the terms of the insurance contract; and
3) the insurance company's breach of the insurance contract.
At the trial in the Rakkar case, the first and second of the above elements were satisfied by uncontested testimony that the house was insured at the time of the fire, that the insured had paid his premiums, that the insurer had refused to pay, and that the amount that would have been paid was the policy limits. The insurance company denied the claim, claiming the insured intentionally set the fire. When the jury rejected this insurance company defense, that established the third element - that the insurance company breached the contract.
The above has confirmed that an insurance policy is a contract and treated as such. What if an oral agreement is made with the insurance agent to get coverage?
An oral contract to insure is valid and enforceable. This is clearly the law stated in a line of cases going back as far as 1949, where the Texas Supreme Court stated this is the case styled, Pacific Fire Insurance Company v. Donald. Per Donald, the oral agreement "is presumed to be made in contemplation of a policy containing the terms and conditions in customary use, and impliedly to adopt the same, and it is on this ground that such agreements are sustained as complete and binding contracts."
In the Donald case, the agent for Pacific Fire agreed to insure Donald's hay. The agent's usual practice was to send a bill the next month, or even the month after that. The hay burned before any bill was sent to Donald. The court found sufficient evidence of an oral contract based on the agent's agreement to provide insurance. It did not matter that rates were not agreed to, because the rates were set by law. The change in the insured location also did not matter, because that would only effect the rate, not whether there was coverage.
What needs to be kept in mind, is that insurance policies are contracts and that even though insurance has a large set of laws regulating the conduct of insurance companies and their agents, and they also have the Texas Department of Insurance looking over their shoulder, that contract law and principles also apply to insurance policies.

Not many people in Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Cedar Hill, Duncanville, De Soto, Lancaster, or elsewhere in North Texas have to worry about an issue that some gulf coast residents have to be concerned about. That is the drywall cases that have resulted from hurricane Katrina and hurricane Ike.
The Miami Herald published an article on January 3, 2011. The article is titled, Drywall Insurance Coverage Still Possible." It was writen by Duane Marseller. Much of the article is quoted here.
The drywall cases are cases that resulted after hurricanes where homes were damaged. When this occurred there were a large number of homes that were repaired using a drywall product that was manufactured in China. It turned out that the drywall product was defective.
The Miami Herald article tells us that a recent court ruling could close the door on home owners insurance coverage of this corrosive drywall product. In spite of this ruling however, there are other, more likely recovery theories still open for the affected home owners.
What happened is, last month a federal judge in New Orleans ruled that ten home insurance companies did not have to pay drywall related claims. These insurance companies had exclusions in the policies that specifically excluded the type of coverage being sought by the home owners.
The ruling was a 50 page opinion on this drywall product. The faulty drywall is said to be corrosive and emits sulfuric gases that damage electrical and air-conditioning components plus causes sore throats and watery eyes.
The ruling by this federal judge is limited in its scope and is based on Louisiana law and applies only to policies in Louisiana, not policies out of the state.
As was pointed out by the home owners attorney in the lawsuit, "Every state has different laws regulating insurance policies and the courts of each state have interpreted those laws differently. The attorney went so far as to compliment the Judge on his ruling, saying that the ruling is narrow in its scope and has a very narrow application to Louisiana home owners policies. Plus the Judge rejected the insurance company's arguements that the drywall was not causing a physical loss and was not covered because of pollution exclusions.
In his opinion the Judge wrote, "In the present cases, the Chinese manufactured drywall has caused a 'distinct, demonstrable, physical alteration' of the plaintiffs' homes by corroding the silver and copper elements in the homes, often to the point of causing total or partial failure in electrical wiring and devices installed in the homes, as well as by emitting odorous gases."
This was a victory of sorts for the Louisiana homeowners, but ultimately a loss because of the one exclusion in the policies the Judge found valid. However this victory does help other home owners with different policies without that specific exclusion.
One home owners attorney wrote, "This may indicate courts will find coverage against insurance companies issueing liability policies to builders and suppliers. These insurers have been relying on the 'pollution exclusion' when breaking their promises to their insureds.
This ruling helps home owners go after the manufactuers of these drywall products. Another attorney said, "Those commercial policies are a better bet anyway for home owners seeking compensation to replace damaged property and fix their homes."
Still another attorney said, "That is the recovery source the plaintiffs are primarily looking to. I don't think the home owner policies ever were looked at as one of the main avenues for recovery."

Weatherford, Parker County, Aledo, Azle, Mineral Wells, and other residents through out Texas would wonder what are the different ways of recovering losses that result from an insurance company or insurance company agent doing something wrong in the sale of an insurance policy.
The Texas Department of Insurance has a web-site that provides some information about insurance companies and insurance agents. There is also information at this site about insurance adjusters.
The Texas Supreme Court hears and issues opinions about situations that have happened across the state dealing with insurance related issues. Plus the lower appeals courts and the local courts have to hear and decide on insurance related cases on a fairly regular basis.
The best source for learning about the different theories of recovery in insurance cases would be an experienced Insurance Law Attorney. An attorney who handles a lot of these cases will be familiar with how the courts handle these cases and he would know about the resources available through the Texas Department of Insurance that are helpful in dealing with these insurance cases.
The Texas Insurance Code has rules and regulations dealing with just about everything you can imagine related to insurance.
One of the most common basis for an insurance dispute is the complaint that someone misrepresented something. After a claim arises, the insured person or business entity may feel that the coverage accepted by the insurance company is less than the coverage promised at the time of the sale of the policy. Depending on the facts of the case, a representation by the insurance company or its agent may lead to liability for breach of contract, unfair insurance practices, deceptive trade practices, negligence, or fraud.
The insurance agent may be held liable for misrepresentation even where the insured fails to read the coverage, when the jury could find the insurance company and the agent misrepresented the extent of coverage under the policy. This was the decision in the case, Omni Metals, Inc. v. Poe & Brown of Texas, Inc., decided by the Texas Court of Appeals -- Houston [14th Dist.], decided in 2002.
Closely related to misrepresentation is the theory that the insurance company, insurance agent, or insured person failed to disclose information. For example, if an exclusion is not adequately disclosed, the insurance company may be liable for breach of contract by relying on the exclusion to deny a claim. Failing to adequately disclose limitations or exceptions to coverage may also make the insurer or agent liable for unfair practices or deceptive trade practices.
There are several statutory prohibitions specifically aimed at settlement practices in the Texas Insurance Code. Liability may arise from failing to pay benefits that are owed under the policy, for failing to pay benefits that were promised by the insurance agent, for failing to act promptly to settle once liability is reasonably clear, for paying too little, or for paying too slowly. Liability may also arise from the insurance company's failure to adequately investigate a claim.
Other disputes may arise that do not fit neatly within the above categories, such as unreasonable cancellation of a policy, unconscionable conduct, or unfair discrimination.
The theories of liability discussed above may vary depending on who is seeking recovery. It may make a difference whether the person is the insured, a named beneficiary, an intended beneficiary, or an injured person seeking recovery under another's liability policy. Questions also arise whether an agent can sue his own insurance company, and under what theories, and whether other persons affected by the insurance company's conduct can sue.

People in Grand Prairie, Dallas, Fort Worth, Arlington, Mansfield, Garland, Mesquite, Rowlette, De Soto, Cedar Hill, Duncanville, and other places in Texas would like to think that people are honest with them in their business dealings. The majority of the time, this is true. Rarely does someone intentionally lie about a subject, but occassionly a misrepresentation is made, not on purpose, but accidently. When this is done it is called negligent misrepresentation.
Here is an example of negligent misrepresentation. This is from a 2003 case styled, New York Life Insurance Company, et al v. Phillip M. Miller. This case was decided by the Texas Court of Appeals, Austin.
Here is some background:
The case involves a dispute between two life insurance agents over a large commission. Michael Coffey, the agent for New York Life Insurance Company (New York Life) was asked by a company to help set up a complex set of estate planning transactions that included a "split dollar conversion" of a $10 million New York Life policy. This transaction generated a large commission. Miller, also a New York Life agent, was the permanent servicing agent on the policy. Both Miller and Coffey were obligated under their respective contracts with New York Life to follow the rules for client contact. Miller alleged that, although Coffey did eventually contact him about his work on the policy, Coffey violated the rules by failing to contact him as soon as he began to work on the conversion. Miller sued New York Life for breach of its contract with him and for negligent misrepresentation and other causes of action. At trial, verdict was rendered for Miller. New York Life appealed. This appeals court reversed the judgment and Miller ended up taking nothing on his claim.
In this case the court spent a lot of time discussing the $10 million policy and New York Life rules of client contact. Relevant rules from the New York Life "Agent's Handbook" were cited by the court in discussing the intent of the rules and how these rules could and should be interpreted. This handbook of course being relevant as to what agents of New York Life understood the rules to be.
The court after reviewing the rules then began a discussion as to what constitutes negligent misrepresentation. The following are quotes from the case. These quotes are taken from other cases dealing with this issue that were decided by the Texas Supreme Court and other courts of appeals in Texas.
"To establish a claim for negligent misrepresentation, Miller was required to prove that, without exercising reasonable care or competence, New York Life made a representation in the course of its business, or in a transaction in which it had a pecuniary interest, which contained 'false information' for the guidance of Miller in his business. He also was required to prove that he suffered pecuniary loss by justifiably relying on the information. Significantly, the sort of 'false information' contemplated in a negligent misrepresentation case is a statement of existing fact, not a promise of future conduct. Moreover, the tort of negligent misrepresentation frequently involves a defendant's statement that a contract exists, upon which the plaintiff relies, only later to discover that the contract has been rejected or never completed. Thus, negligent misrepresentation is a cause of action recognized in lieu of a breach of contract claim, and is not usually available when a contract is in force between the parties.
There are two thoughs to take from this case. The first is that issues about negligent misrepresentation can be difficult and hard to understand and as a result an experienced Insurance Law Attorney should be consulted when you are dealing with insurance issues and something like this arises. Second, one needs to realize that insurance companies and their agents will sometimes be in situations where they are misrepresenting policy coverage to an insured. When this is done accidently or negligently there is legal recourse for this wrong.

Insureds in Dallas, Fort Worth, Grand Prairie, Mansfield, Cedar Hill, De Soto, Duncanville, Red Oak, Lancaster, Arlington, Forest Hills, and other places in Texas do not really understand the different parts of insurance transactions. Let's try to get an understanding and be more educated about insurance transactions.
To understand the different ways disputes can arise, it is helpful to consider the sequence of events that is likely to occur. At its very simplest, the insurance transaction can be divided into the initial sale of the policy, and subsequent handling of claims. These can be broken down further to include:
(1) The sale of the policy: Initially, the consumer and insurer or insurer's agent must communicate to establish a contractual relationship. Disputes may arise over what was asked for by the applicant, what was represented by the insurer or agent, or the timeliness of the insurer or agent in providing coverage. Issues may also arise about the truthfulness of the applicant or agent in disclosing information requested by the insurer;
(2) Underwriting: At this stage the insurer considers the application and determines whether the applicant is an acceptable risk. Certain types of discrimination based on risk are legitimate and are inherent in the process of providing insurance. Other types of discrimination -- such as distinctions based on gender, ethnicity, or disability -- are unlawful;
(3) Policy administration: During the course of the insured / insurer relationship, disputes may arise even if there is no claim. For example, the insurer may choose to cancel or not renew the policy. The insurer may demand a premium that is higher than the insured was lead to expect; and
(4) Claims: If a claim arises under the policy, the parties may fall into disagreement over the scope of coverage, the amount of payment, the insurer's failure to pay, or the timeliness of any payment. An insurance claim may also give rise to disagreements based on the difference between the coverage promised by the insurer or its agent at the time of sale contrasted with the coverage given at the time of the claim.
There are differing theories of recovery when sueing on an insurance contract. Insurance transactions tend to resemble one another, so disputes arising from them tend to resemble one another. There are only so many ways that an insurance company and an insured can get crossways. Most cases present recurring problems that can be grouped into categories. Insurance law is driven by precedent, more so than other areas of the law. Courts try to construe similar policy language consistently. This is why many cases start to look alike.
The key in insurance law case is find case law that matches the facts of the case being looked out.
The most important starting point is the insurance contract itself. The initial inquiry almost always starts with the language of the insurance policy to determine what is covered and what is not. Other tort and statutory theories of law may depend on the existence of coverage, or may exist independent of coverage. The interplay between recovery for breach of contract and recovery under other theories of law have to be examined. Beyond suit for breach of contract, most insurance cases can be grouped into these categories:
1) misrepresentations
2) nondisclosures
3) unfair settlement practices; and
4) other misconduct.
A lot of attorneys will have some understanding of insurance law just based on their knowledge of law in general. But, insurance law is a sub-division of law unto itself and only an experienced Insurance Law Attorney is going to have read the cases and stayed up on changes in the law as they occur, enough so as to give someone having problems, good advice on how to proceed.

Someone is Burleson, Granbury, Cleburne, Bembrook, Crowley, Dallas, Fort Worth, Grand Prairie, Arlington, or any other place in Texas who has a disability insurance policy probably is not sure exactly how the policy works. Most people who have these types of policies get them through their job. When obtained through work the person usually gets a pamplet explaining some of the benefits but rarely is much attention paid to it. A few people will purchase them through an independent insurance agent who explains the coverage but even then, the explanation is quickly forgotten or not completely understood.
The Beaumont Court of Appeals decided a case in 1978, dealing with an insurance policy. The policy had different periods of disability that applied depending on whether the disability resulted from an accident or an illness. The style of the case is, Lone Star Life Insurance Company v. Joseph B. Griffin.
At the trial level, Griffin obtained a judgment against Lone Star Life Insurance Company (Lone Star). Lone Star appealed.
The facts in this case were as follows:
Griffin testified that on the night of February 2, 1975, as he was returning to his home from his farm, he passed his drugstore. As was his custom, he entered the store to see if everything was normal (having been burglarized several times in the past). He smelled smoke which he found to be coming from the rear of his building. He testified that he emptied his fire extinguisher but his efforts were futile; that he was trying to get out of the building when an aerosol can exploded in his face; that he lost consciousness while upon the floor of the store near a door, and regained consciousness later in a hospital.
Dr. Lee Popejoy testified as to his treatment of Griffin beginning at about two in the morning following the fire. He told of finding external burns on several parts of Griffin's body but the most serious injury was to his lungs from the inhalation of smoke and fumes.
Griffin operated a one-pharmacist store and he secured the services of a retired pharmacist to help him for a while. He testified that he was unable to do the work of a pharmacist because of his difficulty in breathing and that while his health had improved, he was still unable to do his work in the store.
Dr. Popejoy testified positively and unequivocally that Griffin's injuries were caused by the inhalation of the smoke and fumes which resulted in his total and permanent disability. Dr. Charles Anderson examined Griffin for Lone Star. His examination was more than two years after the accident and he found Griffin to be only partially disabled, at the worst. Anderson attributed Griffin's condition to his constant smoking of cigarettes which he admitted to have been addicted to for approximately fifty years. Anderson testified that Griffin could do all of the work of a pharmacist but could not do any sustained heavy lifting.
The policy of insurance provided that Lone Star would pay Griffin $1,000 per month for sixty months for an accidental injury resulting in total disability and that it would pay $1,000 per month for twenty-four months for total disability resulting from sickness. Lone Star paid several monthly payments of $1,000, noting on each check that the payment was for accidental injuries. Without any change in its medical information in its file and for some undisclosed reason the checks were coded to indicate that the disability was the result of sickness, not an accident. The twenty-fourth payment was coded to indicate a sickness disability payment and a letter was written. The check indicated it was the last payment.
The letter said, "If we can be of further assistance to you, please do not hesitate to contact us."
Griffin alleged and contended that Lone Star, by sending the letter, "repudiated the provisions of its policy dealing with payment of benefits for disability resulting from accident" so as to entitle him to recover not only the past due payments but "also the present cash value of the future payments which are unaccrued."
The jury found in Griffin's favor.
There are two relevant points in this case:
1) to point out that disability policies have various provisions written in them and understanding this is important to understanding your rights in a policy when making a claim for benefits, and
2) when, as here, there are two time periods of payment that may be applicable, that alleging and proving a repudiation of the insurance policy may allow the insured to recover future benefits immediately, subject to a reduction for present value.
A third lesson would be, consult with an experienced Insurance Law Attorney whenever you find yourself in a position of being denied benefits under a disability insurance policy.

Disability income insurance coverage for someone in Grand Prairie, Dallas, Fort Worth, Arlington, Bedford, Euless, Hurst, Lake Worth, Aledo, or anywhere else in Texas is usually expensive. In addition to being expensive, the policy language is sometimes difficult to interpret.
Disability income policies typically specify an amount that will be paid in the event of a disability (as defined in the policy) and a maximum length of a disability (as defined in the policy) and a maximum lenght of time for which such benefits will be paid (e.g., "$200 per month for up to 60 months").
A beginning place to look to see how Texas regulates disability income insurance policies is the Texas Administrative Code. Title 28, Part 1, Chapter 3, Subchapter S, Rule Section 3.3005 deals with the definitions in policies. It reads:
Except as otherwise provided by law or these sections, no individual accident and sickness insurance policy or hospital, medical and dental service corporation subscriber contract delivered or issued for delivery in this state may contain definitions respecting the matters set forth in Sections 3.3006 - 3.3029 of this title (relating to Minimum Standards and Benefits and Readability for Accident and Health Insurance Policies) unless such definitions comply with the requirements of said sections.
One should keep in mind that the person claiming benefits need not prove that he or she actually lost the amount of income protected. In other words, the benefits are payable even if the insured is unemployed at the time of the disability.
The Administrative Code quoted above, Section 3.3012 reads:
(a) A general definition of "total disability" may not be more restrictive than one requiring the individual to be totally disabled from engaging in any employment or occupation for which he or she is or becomes qualified by reason of education, training, or experience, and such individual is not in fact engaged in any employment or occupation for wage or profit.
...
The Texas San Antonio Court of Appeals said in 1966, in the case, Occidental Life Insurance Company v. Duncan, "The test for 'total disability' is whether a reasonably prudent person in the insured's condition would, in the exercise of ordinary care, engage in the insured's business; it is not necessary that the insured be immobile, bedridden, or totally unable to work before he or she can recover."
The above Administrative Code Section, subpart (b) reads:
"Total disability" may be defined in relation to the inability of the person to perform duties, but such inability may not be based solely upon an individual's inability to:
(1) perform "any occupation whatsoever" or "any occupational duty"; or
(2) engage in any training or rehabilitation program; however, an insurer may specify the requirement of the inability of the person to perform all of the substantial and material duties pertaining to his or her regular occupation, or words of similar import.
In 1978, the Fort Worth Court of Appeals in the case, Metropolitan Life Insurance Company v. Duncan said that a disability insurer selling a policy designed to provide coverage in the event of being unable to engage in their occupation, may define "total disability" in terms of:
(1) the insured's usual occupation (e.g., "unable to perform any and every duty pertaining to his or her own occupation");
(2) an occupation for which the insured is qualified by virtue of education, training, and experience (e.g., "unable to engage in any gainful occupation or employment for which he is reasonably qualified by education, training, or experience").
The Texas Insurance Code, Section 1252.001, defines "total disability." It says in sub-part (5):
"Total disability" or "totally disabled" means:
(A) with respect to an employee or other primary insured covered under a health benefit plan, the complete inability of that individual to perform all of the substantial and material duties and functions of the individual's occupation in which the individual earns sustantially the same compensation earned before the disability; and
(B) with respect to any other individual covered under a health benefit plan, confinement as a bed patient in a hospital.
Disability policies are a big source of litigation. An experienced Insurance Law Attorney is a must have when dealing with disability policies. Another factor making these cases different than other insurance policies is that a majority of these disability policies are ERISA policies, which means the legal fight with these policies have to be waged in a Federal Court. In addition to that, these cases have very strict guidelines that must be followed. And finally, in an ERISA type of policy, the claimant is not going to be entitled to a jury trial, rather the process is an administrative process with strict timelines which are ultimately decided by a judge based on a stringent standard.

Business owners in Dallas, Mesquite, Duncanville, Grand Prairie, Fort Worth, De Soto, Arlington, Mansfield, Seagoville, Rowlette, and other places in Texas may ask the same question. What ends up happening when a loss occurs in the business, is that the business owner calls his insurance company and makes a claim, then the insurance company tells that business owner that the type of loss that was incurred is not the type of loss that is covered under the commercial insurance policy.
The Aspen Daily News has reported a story that follows the above scenario. The title of the article is, "Jimmy's Sues Insurance Company Over Bombed-Out 2008 New Years Eve." The articles author is Brent Gardner-Smith.
Jimmy's is a restaurant in Aspen, Colorado.
What happened is described in the article. It appears that bomb threat notes were left at two Aspen banks, a Wells Fargo and Vectra Bank. The notes demanded money and a threat of "mass death" and "a very big fire cracker." Crude looking bombs looking like Christmas presents were left near the banks. These bombs were real and were later detonated by a Grand junction, Colorado, bomb squad.
There were not any injuries or damage as a result of the blasts but the threat shut down 16 square blocks of Aspen's main business district and resulted in an evacuation at 5 P.M. as a precaution and the area did not re-open until 5 A.M.
The bomber was identified and was later found died from a self-inflicted gun wound.
For the restaurants in this area, New Year's Eve is their biggest night of the year. One of the restaurants, Jimmy's, filed suit to prevent the two year statute of limitations from running.
The article tells us that Jimmy's, like may other restaurants in Aspen, had to cancel two pre-paid New year's Eve dinner seatings and refunded money to its guests, who had to scramble to find other ways to celebrate the end of 2008.
The owner of Jimmy's is The Fierce American Food Co., LLC. Their insurance company is Homestate Companies, which also is known as the Berkshire Hathaway Homestate Companies.
The lawsuit papers say that Jimmy's suffered in excess of $100,000 in damages.
Jimmy's filed a claim with Homestate and the claim was denied. Homestate is saying there was not any coverage because there was not any physical damage to the property. The claim was filed under the interruption of business operations coverage portion of the policy.
Lawyers for Jimmy's are saying that even if there is not coverage under the business operations coverge portion of the policy, that the terrorism coverage portion of the policy clearly applies.
It is noteworthy that at one time, most or all of the restaurants in the area were making claims for coverage and that it is estimated that millions of dollars were lost as a result of the bomb threats. At the time of the publication of this article, only Jimmy's had filed suit.
The lesson to be taken from this article is for a business owner to understand what his coverages are in the policies of insurance he buys to protect that business. An experienced Insurance Law Attorney shoud be consulted and given a copy of the policy. A discussion of the facts regarding the cause of the loss and the way the loss was incurred would allow the attorney to discuss options available in a reliable way.
Most policies regarding autos and homes are pretty standard. The variations will be minimum most of the time. However, in commercial policies there is not a lot of standardization. Plus, lots of times, a policy on its face may seem to read in such a way as to provide coverage but then an "endorsement" to the policy takes away the coverage that may have at first seemed to exist.

A lot of people in Fort Worth, Arlington, Colleyville, North Richland Hills, Keller, Roanoke, Azle, Aledo, Weatherford, Dallas, Grand Prairie, and other places in Texas own dogs. So, what does it matter?
Here is one answer to that question. It could result in your homeowners insurance being cancelled or at the least, it might result in increased premiums for your homeowners insurance policy unless you get rid of the dog. The type of dog will also make a difference in whether or not it affects you.
The Palm Beach Post ran an article back on August 6, 2010. The article was written by Laura Green and is titled, "Insurers Turning Down Coverge For Homeowners With 'Bully' Dog Breeds."
The article reports that every year, more than 4.5 million people are bitten by dogs, and nearly 900,000 of them, half of whom are children, require medical care. This according to the Centers for Disease Control and Prevention.
The relevance of these statistics for the homeowners who want homeowners insurance is that when a dog bite victim needs to pay medical bills, he often seeks payment from the dog owner's homeowners policy. Taking this into account, the total amount of claims paid out nationally has risen nearly 20 percent between 2003 and 2008.
The Palm Beach Post writer tells us that dog bites account for a third of all homeowners insurance liability claims, costing $387 million in 2008, according to the Insurance Information Institute. Also, more than half of bites occur on the dog owners property.
Owners of Pit Bulls, including Staffordshire Terriers, Dobermans, Rottweilers, Chows, Presa Canarios, Akitas, Huskies, and Wolf hybrids cannot get homeowners, condo and renters policies through the Allstate subsidiary, Castle Key, who writes policies in Florida. This situation is the same in many other states. The company United Property & Casualty Insurance excludes the same dogs as Castle Key plus German Sheperds, American Eskimos or any mixed breed that is half or more of any of the banned breeds.
The insurance company, State Farm Insurance, ignores breed and focuses on a survey dog owners must fill out before they are approved. The form asks whether their dog has a history of bites and if so what measures the owner has taken, such as obedience classes or a fence, to prevent the animal from attacking again.
Many insurance companies think it is a mistake and short-sighted to single out a breed of dog and take the approach of State Farm Insurance. They focus on the dog's history and the owners rather than a breed of dog. A great example of this would be some of the dogs that most people consider dangerous such as Pit Bulls, German Shepherds, etc., which are trained as service dogs or therapy dogs. These dogs can be great companions and represent minimal threat or no threat to others.
The concern for homeowners insurance companies is the costs associated with claims related to dog bites. According to statistics the average payout on a dog bite is $24,461. Jury awards and high medical costs can carry a serious bite case to $1 million, obviously a high risk to these insurers.
The general scenario in a dog bite case is one where the dog who has never bitten anyone before, bites a visitor to the house. The visitor could be a service man such as a plumber or a neighbor or a relative who is at the house. Occasionally the dog bite results from a kid or kids teasing the dog. In any event, the owner of a dog who bites who does not have a previous history of bites or danger to others will be liable for medical bills, lost wages, disfigurement, impairment, plus mental and physical pain and suffering.
The owner of a dog who has a history of bites or aggression will be liable for the above plus may be liable for punitive or exemplary damages. In Texas the standard for recovery of exemplary damages is found in the Texas Civil Practices & Remedies Code, Chapter 41.
Exemplary damages can be very costly for an insurer.
Because of the dollar costs that can result from dog bites, it is very important that a homeowner or any owner of a dog be insured. Read the insurance policy and make sure it covers dog bites and that the policy does not exclude coverage for the type of dog you may own.
Consulting with an experienced Insurance Law Attorney whenever you find yourself the victim of a dog bite or the owner of a dog who has bitten is vital to making sure your rights are protected, regardless of what the insurance policy may say.

Most people in places like Arlington, Grand Prairie, Dallas, Fort Worth, Mansfield, Benbrook, Burleson, Crowley, Granbury, and other places in Texas will have some sort of life insurance. But how true is that statement?
The Wall Street Journal published on article on October 3, 2010, titled, "Shift to Wealthier Clientele Puts Life Insurers in a Bind". The article was written by Mark Maremont and Leslie Scism.
This article tells how the life insurance industry has enjoyed beneficial tax treatment for its products for most of the century. Whenever Congress tried to change the tax treatment enjoyed by beneficaries of the policies the life insurance companies could always holler: We protect widows and orphans.
The industry pointed out that life insurance benefits kept these survivors from becoming wards of the State when the primary breadwinner died.
The article points out that these life insurance companies have shifted away from their broad historical base of middle class households. Instead, statistics show, an increasing portion of live insurance business consists of selling large policies to wealthier Americans, often as a part of complex estate tax plans.
What this means is that the tax benefits are not going to the middle class the way they use to, rather the tax benefits are going to the wealthy in our society. The result of this is that a cash strapped Congress is rubbing its hands together at the idea of going after these life insurance policies and removing its tax free status.
Pointed out by the article is that high end policies for $2 million and up, which can carry annual premiums of $20,000 or more, made up nearly 40% of the face value of whole-life and universal-life policies sold in 2007. Such policies accounted for just 10% a decade earlier, and 1% two decades ago.
Meanwhile, the percentage of American families owning life insurance continues to fall. Thirty percent have no life-insurance coverage of any kind. This is a four decade high according to the research group, Limra.
Instead of helping those left behind when the primary bread winner dies, life insurance has become a tax shelter for the rich.
Most middle class families tend to purchase "term" insurance, which provides coverage just for a designated period and doesn't involve a tax advantaged investment account. With term insurance, the only tax break is an untaxed death benefit, and this break comes into play infrequently. That's because most buyers are in their 30s or 40s and remain alive at the end of the policy's term.
The president of the American Council of Life Insurers, Frank Keating, says the favorable tax treatment of assets accumulated within insurance policies is justified even if the affuent are big beneficiaries, because "it is good public policy" to encourage weath accumulation that helps feed capital formation and job creation.
The Congressional Budget Office last estimated that eliminating the tax preferences for investment gains inside permanent life insurance and annuities would raise an additional $265 billion in taxes over a decade.
Some of the largest life insurers, seeing the trend, are concerned about a failure to meet what some consider the industry's social mission to ensure that families have life coverage.
Prudential Financial Inc., which historically has focused on the middle class, says 31% of its new policy sales in 2009 were to its most affluent slice of customers, households with investable assets over $250,000. That puts them in roughly the top 15% of U.S. households measured by financial holdings, according to Fed figures. A decade earlier, 19% of its policies in force were in that high end segment.
A focus on upscale customers was evident at the national conference of the Association for Advanced Life Underwriting, a group of high end life insurance agents. "Bullet proofing Estate Plans Against (Successful) IRS Attacks" was the title of one presentation at an April event in Washington, D. C.
While taxing incomes inside of life insurance policies and annuities may not be a terrible idea, much like taxing capital gains, the idea of taxing life insurance policy proceeds is absolutely uncalled for and goes a long way toward defeating the purpose of life insurance.

A person in Dallas, Fort Worth, Grand Prairie, Arlington, Bedford, Hurst, Euless, Boyd, or any other place in Texas may wonder about the validity of any release they are presented with. Sometimes they are valid and binding and sometimes they are not.
Some guidance about the validity of release can be found in the case styled, Ranger Insurance Company v. John Ward, et al. This is a 2003, case decided by the Texarkana Court of Appeals.
Here are some facts:
On March 19, 1991, Ranger Insurance Company (Ranger) issued a policy to Thompson Flying Services, Inc. This policy brought Thompson into compliance with financial responsibility laws governing the commercial application of herbicides and pesticides, per Texas Agriculture Code, Section 76.111. On June 26, 1991, operating under this policy, Thompson applied a herbicide by aerial application to the Smith Trust Ranch. The herbicide drifted across the county line onto a large portion of land owned by Ward and others, destroying a cotton crop and preventing Ward and the others from planting the following season. On April 29, 1992, Ward et al sent letters to Thompson and Ranger, notifying them of the results of the investigation by the Texas Department of Agriculture (the Department). On May 5, 1992, Ranger sent Thompson a reservation of rights letter. In May 1992, Ward et al filed suit against Thompson and others.
On January 16, 1996, Thompson and Ranger entered into a release, under which Ranger paid Thompson $100,000.00 in exchange for his retroactively releasing Ranger from its obligations under the policy as of the date of issuance. Neither party notified the Department of the release, as required by the Agriculture Code.
When Ward et al made a demand for settlement that is when they were first informed of the retroactive release that had been entered into.
Ward et al eventually obtained a judgment against Thompson for $2,394,479.51 with prejudgment interest of $1,576,688.00 and post judgment interest at ten percent per annum. Ward et al then brought this action against Ranger claiming the release was invalid and that Ranger now owed the claim.
The court then discussed the Financial Responsibility Law saying:
At the time in question, Section 76.111 of the Agriculture Code required that a commercial aerial applicator of pesticide maintain a policy of liability insurance in a minimum amount or provide a surety bond in that same amount. The statute provided in pertinent part: "except as otherwise provided by this section, the amount of the proof of financial responsibility may not be less than $5,000 nor more than $100,000 for property damage and may be less than $5,000 for bodily injury." ... Central to both the interpretation and application of this statute is the language that expresses the purpose of compulsory insurance in this activity: "protecting persons who may suffer damages as a result of the operations of the applicant."
The court went on saying:
Ranger argues it complied with the statutory imposed liability by paying Thompson $100,000.00 in consideration for the release of Ranger's obligation. Contrary to Ranger's position, the statute was intended to have the insurance protect an injured third party rather than just its insured. The statutory announcement of the intended policy goal is quite clear. Ranger reads the statute to allow it to remain in compliance by simply buying its way out of a policy by paying its insured the policy limits in exchange for a release.
From the unambiguous language in the statute, the release cannot act as a complete bar to recovery as Ranger contends, nor as a condition precedent to a cancellation. Ranger remains liable in spite of its actions. ... The retroactive release is contrary to public policy, rendering the release entirely void and keeping fully intact the policy that was in effect at the time of the loss.
This court then cited rulings from other courts to support their position in this case:
"A release, just as any other contract, however, is subject to the public policy of the State"
"We determine the validity of a release by considering all the attendant circumstances at the time of the making."
This case serves as an example of what most people have heard at one time or another, which is that contracts (releases) are not always valid. The circumstances, the wording, and public policy come into play in determining the validity of these documents.

Insureds in Grand Prairie, Arlington, Dallas, Fort Worth, Richardson, Garland, Mesquite, Carrolton, Irving, Mansfield, Weatherford, Aledo, Azle, and all other cities in Texas may want to be aware of one of the ways an insurance company will try to keep from paying on a claim.
There are many things an insurance company might do and regardless of which one of the many things they may try, the best advice for someone to take is: Consult with an experienced Insurance Law Attorney if it ever happens to you.
One of the things an insurance company might do is file a declaratory judgment action, also called a "dec action", to have a court declare as a matter of law that there is no coverage on the policy that is at issue.
This happened in the 1983, Texas Supreme Court case styled, Dairyland County Mutual Insurance Company of Texas v. Harry Childress, et al.
In this case, there was a dispute as to liability insurance coverage provided by a family automobile insurance policy containing a non-owner's endorsement. Harry Childress and the passengers in his automobile at the time of the collision along with the owner of a private residence damaged as a result of the collision sued Fredrick Booth, the insured, for damages arising out of the collision. While this suit was pending, Dairyland County Mutual Insurance Company of Texas, (Dairyland), the insurer, sued Booth seeking a declaratory judgment that the non-owners policy did not cover the automobile in the wreck. An agreed judgment was rendered declaring that no coverage was provided. Childress and the other defendants in this case were not made parties to the dec action.
Childress et al sued Dairyland for the policy limits and Dairyland asked the court to dismiss the lawsuit based on the result of the dec action declaring there was no coverage.
The issue, among others, presented to the Texas Supreme Court was; whether the Childress parties were bound by the dec action between Dairyland and their insured, to which Childress and the others were not made parties?
Here is what the court looked at in ultimately ruling against Dairyland:
Childress filed suit against Booth on May 17, 1976. Dairyland hired an attorney to defend Booth and paid him for his services. The attorney filed an answer for Booth on June 4, 1976. On June 15, 1976, Dairyland filed suit for declaratory judgment that the non-owners policy did not provide Booth coverage for the collision with Childress. On January 17, 1977, an agreed judgment was rendered that Dairyland had no duty to defend Booth and that the non-owner's policy provided no coverage for Booth respecting the collision with Childress. On July 18, 1978, judgment was rendered for Childress in this suit against Booth.
Dairyland relied upon the doctrine of res judicata and collateral estoppel to support its contention that Childress was bound by the dec action. Their arguement was that Childress' suit was derivative of Booth's coverage and therefore they were in privity with Booth. In their arguement, Dairyland cited a few cases that they contended supported their position. This court distinguished the facts in those cases from the facts in this case.
In this case, the court stated, "In the present action, Childress could exercise no control over the declaratory judgment suit. Their interests were not represented by a party to the action nor were they successors in interest to a party. In fact the purpose of the suit was to work against their interest."
The court went on to point out the requirements of a declaratory judgment action found in the present day Texas Civil Practice & Remedies Code, Chapter 37, which states in relevant part:
When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding.
In ruling for the Childress side on the lawsuit, the court stated, "We hold that Childress and Booth were not in privity respecting the declaratory judgment suit and the doctrine of res judicata and collateral estoppel is not applicable to Childress' suit against Dairyland.
The proper action for Dairyland to have taken in this matter would have been for them to serve legal papers on Childress et al. Then if they had prevailed, they may have been able to successfully keep from paying any damages. Since they did not have Childress et al involved in the lawsuit, then the results of the lawsuit were not binding on Childress et al and the doctrine of res judicata and collateral estoppel did not apply.

Here is info for someone in Arlington, Grand Prairie, Dallas, Fort Worth, Mansfield, Garland, Mesquite, Richardson, and other places in Texas to think about.
Normally, an injured party cannot sue the other guy's insurance company. Any lawsuit is brought against the person who caused the injury or damages and then that person turns the claim over to their own insurance company to defend or pay the claim to the injured party.
Here is a case for thought on this subject. Ben P. Perez and Minerva B. Perez v. Catlin Specialty Insurance Company f/k/a Wellington Specialty Insurance Company. This is a United States District Court for the Western District of Texas case. The opinion was issued on December 20, 2010.
The facts generally are, in 2005, the Perez's contracted with Kyle Construction (Kyle) to construct an addition to their existing home. According to the Perez's, the construction work was performed in a negligent manner. In 2007, the Perez's experienced significant water damage to their home as a result of Kyle's negligence. They sued Kyle and the case was sent to arbitration. The Kyle's prevailed at arbitration.
Catlin Specialty Insurance Company f/k/a Wellington Specialty Insurance Company (Catlin) issued a policy of liability insurance to Kyle for the period of September 13, 2006 -- September 13, 2007. Thus, the policy was in effect at the time of the damage to the Perez's property. Catlin accepted coverage and provided legal assistance to Kyle. Two years into the lawsuit, Kyle entered into a Settlement Agreement with Catlin wherein, in exchange for a lump-sum payment from Catlin, Kyle released Catlin from any further obligation to defend or indemnify Kyle with respect to the Perez lawsuit. The Perez's continued their claim against Kyle and obtained a judgment at arbitration. The Perez's then obtained a turnover order, ordering Kyle to give the Perez's any and all rights and claims that Kyle might have against Catlin. The Perez's then sued Catlin alleging Catlin is obligated to pay their judgment against Kyle. The Perez's contended that the purported release between Kyle and Catlin was void as against public policy.
Based on this allegation Catlin attempted to have this case thrown out of court. The Perez's filed a motion for summary judgment on this same legal question: is the release entered into between Catlin and Kyle valid, or is it void as against public policy? The Perez's prevailed.
In ruling for the Perez's the court stated the following: It is undisputed under Texas law that a plaintiff becomes a third party beneficiary of an insurance contract at the moment he obtains a judgment against the insured. It is also undisputed that an insured and its insurer cannot defeat a plaintiff's rights in the policy by executing a release after the plaintiff has received a judgment against the insured.
The distinction in this case is that the Perez's did not obtain a judgment against the insured until after the release had been entered into between Kyle and Catlin. Catlin therefore contended that the Perez's did not have standing to sue Catlin for benefits under the policy because its obligations under the policy were extinguished by the Settlement Agreement.
The law in Texas is that releases entered into prior to a plaintiff receiving a judgment against the insured are void as against public policy. Other cases ruling on this matter have dealt with situations where the insurance was mandatory. Even though the insurance in this particular situation was not mandatory, Kyle was required to maintain public liability insurance according to the guidelines of the subdivision in which the Perez's lived. Additionally, insurance under the Texas Occupations Code is mandatory for residential appliance installers per Section 1305.1618. It is requred for Master Plumbers in Section 1301.552, and for air conditioner contractors per Section 1302.260.
In making its ruling the court looked at the above situations and others where liability insurance is required and noted that the purpose of the laws in this area were to protect persons who suffered damage as a result of operations of an insured. That persons damaged are third party beneficiaries of the policies.
Considering the purposes of the law and the legislature in adopting the laws, the court ruled in favor of the Perez's and stated that the release in this case was void as against public policy.

Lots of people in Arlington, Grand Prairie, Fort Worth, Dallas, Mesquite, Garland, Richardson, Burleson, Benbrook, Crowley, and other places in the Dallas-Fort Worth metroplex area have purchased insurance policies that provide payment to them in the event they become disabled and are unable to work. A natural question would be: What happens if the insurance company denies a claim for disability benefits because of total disability and the case goes to trial?
This is what happened in the case styled, Occidental Life Insurance Company of California v. Robert L. Duncan. This case was decided by the San Antonio Court of Appeals in 1966.
The record in this case shows that Duncan was engaged in the selling of labels as an independent contractor for Louis Roesch Company on a commission basis. Louis Roesch Company manufactures labels and Duncan sells them, generally to canners. He has been in the label selling business for some twenty years. He was in an airplane accident on October 25, 1957, and was rather severly injured, Occidental Life Insurance Company of California, (Occidental) paid him for total disability from the time of the accident until September, 1963, when it stopped payment. Duncan sued.
Duncan was injured in his back, right knee and right foot. He was in the hospital for five months and thereafter confined to his home for some time. At the time of trial, he still had pain to his back but learned to live with it, his right knee was somewhat recovered. His right foot problem still existed. The joints in the metatarsal section were fused, the pressure caused the joints in his foot to separate, and he wore a brace with a steel plate under his foot to relieve some of the pressure. Motion in that area of his foot caused great pain. His right ankle was shorter and completely stiff. The ankle was solid bone. He could not walk up slopes; he once fell trying to negotiate a slope in Houston, a year and a half before trial, calling on a customer. The fall caused a brain concussion. He had numerous other falls, averaging one a month. He could not negotiate rough terrain, wet ground, snow or ice. Uneven gravel surfaces were hard for him to walk on. It was difficult for him to get into some of the plants that have slopes. Before the accident he would run and catch trains, from time to time; at trial he could not run at all. Prior to his accident he had a total of one hundred and ten accounts that he had sold at one time or another; at trial he had only nineteen of those accounts remaining. He could not follow through with his accounts because of his limited ability to travel long distances.
Before his injury he often drove his automobile 50,000 miles per year, and traveled a total of about 100,000 miles. At trial he was unable to drive more than 6,000 to 10,000 miles per year. A great deal of traveling was necessary in his business. At trial he introduced into evidence his income.
He showed is was unable to establish major accounts since the accident.
In this case the jury found in favor of Duncan, however, this appeals court remanded the case for a new trial based on issues surounding jury misconduct. The part of the case dealing with the way insurance disability cases are analysed is still good law.
The Occidental insurance policy defined total disability as:
'Disability shall be deemed to be total whenever the Insured becomes disabled as the result of injury or disease so as to be wholly unable to engage in any occupation and to perform any work for compensation or profit.'
The court in analysing this case said:
"The controlling issue in this case is whether an ordinarily prudent person in the exercise of ordinary care would have refrained from working under the same or similar circumstances."
The trial court in connection with the issue summitted to the jury regarding whether or not Duncan was totally disabled, gave the following instruction:
"In connection with the above question you are instructed that disability shall be deemed to be total whenever an individual becomes disabled as the result of injury or disease so as to be wholly unable to engage in any occupation and to perform any work for compensation or profit. It does not mean, however, an absolute physical inability to perform any of the duties pertaining to his occupation; but total disability, as inquired about in the above question, exists if such disability prevents the individual from substantially performing every essential operation necessary to the performance of his occupation."
An experienced Insurance Law Attorney is needed whenever a denial of benefits is received from an insurance company. The above case is a good beginning point for evaluating these cases.

People with life insurance policies in Fort Worth, Dallas, Grand Prairie, Arlington, Hurst, Euless, Bedford, Lake Worth, Benbrook, Burleson, and other places in Texas may wonder if the life insurance company can contest their life insurance after purchasing it. Here is some guidance on this issue.
The Texas Insurance Code addresses incontestibility clauses in atleast two separate places in the insurance code. The first one is in Sections 705.101 and 705.105. Of these five statutes, four deal generally with this issue, while 705.104 is more direct. It says:
"A defense based on a mispresentation in the application for, or in obtaining, a life insurance policy on the life of a person in or residing in this state is not valid or unenforceable in a suit brought on the policy on or after the second anniversary of the date of issuance of the policy if premiums due on the policy during the two years have been paid to and received by the insurer, unless:
(1) the insurer has notified the insured of the insurer's intention to rescind the policy because of the misrepresentation; or
(2) it is shown at the trial that the misrepresentation was;
(A) material to the risk; and
(B) intentionally made."
The next place the incontestibility clause is addressed in the Texas Insurance Code is Section 1131.104. It says:
"A group life insurance policy must provide that:
(1) the validity of the policy may not be contested, except for nonpayment of premiums, after the policy has been in force for two years after its date of issue; and
(2) a statement made by any insured under the policy relating to the insured's insurability may not be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force before the contest for a period of two years from its date of issue during the insured's lifetime and unless the statement is contained in a written instrument signed by the insured making the statement."
The statutes above require that incontestability clause be in life insurance policies.
The purpose of an incontestability clause is to protect the insured from a contest as to the validity of the policy after the set period has expired. This was made clear in the 1972, Texas Supreme Court case, The Minnesota Mutual Life Insurance Company v. Ethel C. Morse. In this case, The Minnesota Mutual Life Insurance Company contested the amount of money to be paid a beneficiary and whether or not the two years had elapsed. This case was a loss for the beneficiary but its importance to other beneficiaries was it's holding that the incontestibility clause is valid.
Another important point of the law in incontestability cases was stated by the Texas Appeals Court -- Houston [14th Dist.], in 1982. The style of this case is Parchman v. United Liberty Life Insurance Company. What the case stands for is the proposition that a life insurance company may not place a more onerous incontestability clause in the policy than the one prescribed by statute, although it may be shorter than that prescribed.
In Parchman, the policy date in question was October 10, 1977, and the effective date was either July 20, 1977, or August 6, 1977, depending on whether a medical examination was required and completed. Using the policy date (October 10) as the date that the clause began to run provided for a longer period than using the effective date (July 20 or August 6). Thus, the policy's incontestable clause was more onerous than the one prescribed by statute, so the statute prevailed, and the policy date in the incontestability clause was construed to mean the effective date. In this case, the two-year period began running on the earlier effective date rather than on the later policy date.
As always, when someone finds themselves in the position where their claims for policy benefits are being denied, they should consult with an experienced Insurance Law Attorney. That is the only sure way of knowing that your lack of legal knowledge in this area of the law is not being taken advantage of in an unfair way.