Dallas Fort Worth Insurance Lawyer Blog

Anyone in Grand Prairie, Arlington, Mansfield, Cedar Hill, Duncanville, De Soto, Irving, Fort Worth, or anywhere else in Texas would naturally wonder when a claim they submit is suppose to be paid. The lawyerly answer is: It depends. One answer in one situation is shown here.
In 2002, the San Antonio Court of Appeals issued an opinion in a case that dealt with when a claim for underinsured motorist (UIM) benefits should be paid. The style of the case is Lawrence F. Wellisch, III and Maria L Wellisch v. United Services Automobile Association. The case came to the appeals court on an appeal on a motion for summary judgement in favor of United Services Automobile Association (USAA).
Here is some background.
Judith Salinas was driving her car at about 88 miles per hour when she lost control of the vehicle. It rolled over, killing Salinas and her son and severely injuring other passengers, including 15 year old Jessica Wellisch. Jessica was in a coma for five days before dying. The Wellisch's sued Salinas estate, and, with USAA's permission, settled. The Wellisches then sought to recover under their USAA UIM coverage. On November 25, 1998, USAA denied the claim, and the Wellischs sued on the insurance contract and for extra-contractual claims.
A trial was held wherein the Wellishes prevailed on their contract claim. On May 2, 2000, the judgment was entered and on the same day, USAA paid the Wellisches their policy limits of $300,000.
The Wellischs then proceeded on their extra-contractual claims against USAA. The part of this that is relevant to this writing is the claim for delay in paying the claim from November 25, 1998, to May 2, 2000. USAA filed a motion for summary judgement asking the court to rule that there was no liability and the court granted that motion. This appeal ensued.
The Wellisches asserted that USAA's denial of their claim on November 25, 1998, was a violation of the Texas Insurance Code, Prompt Payment of Claims Act, and thus they were entitled to Section 542.060 penalties. USAA countered, arguing that the money was not due until judgment was rendered on May 2, 2000, and since they paid on that same day, they had no liability under Section 542.060.
The USAA policy provided that USAA would "pay all damages which a covered person is legally entitled to recover ...."
In discussing this case the court looked at how other courts have ruled and stated, "Various courts have construed the phrase 'legally entitled to recover' in similar UIM policies to mean that the insured must establish the uninsured motorist's fault and the extent of the resulting damages before becoming entitled to recover UIM benefits." They went on to say that those other courts make clear that an insurer is not obligated to pay UIM benefits until the insured becomes legally entitled to those benefits. Thus, an insurer has the right to withhold payment of UIM benefits until the insured's legal entitlement is established.
In looking at the statute, they said that the plain objective of the statute is to obtain prompt payment of claims, and as a court, they must liberally construe the statute to promote its underlying purposes. Failure to comply with the statute is what would result in penalties for failure to comply with the statute.
However, as the court stated, "Nothing in (the prompt payment of claims act) suggests that an insurance company cannot dispute and deny a claim. In fact, the statute is premised on the presumption that carriers have the right to dispute claims. It merely requires that they do so promptly. Further, nothing in (the act) precludes an insurer from awaiting a judicial determination of an insured's 'legal entitlement' to UIM benefits. It merely requires that the insurer notify the insured of its reasons for delaying the acceptance or rejection of a claim."
An experienced Insurance Law Attorney can read Section 542.055, 542.056, and 542.057 and advise a client how best to proceed. These situations can be very fact specific. When dealing with UIM cases, too many times a person has to wait until there has been a judicial determination of fault and damages. Most other cases do not require this wait.

Someone in Grand Prairie, Arlington, Fort Worth, Dalworthington Gardens, Mansfield, Crowley, Rendon, or anywhere else in Tarrant County or Texas may wonder how long an insurance company has to pay a claim. The answer is, it depends.
In 2001, the Texas Supreme Court issued an opinion in the case, Allstate Insurance Company v. Rhonda Bonner. This case dealt with the time frame in which an insurance company must respond to a claim benefit request and the punishment for the insurance company when the time frame is violated.
The Texas Insurance Code has a chapter that deals with the payment of claims and is known as the "Prompt Payment of Claims" statutes. They are sections 542.051 thru 542.061.
Here is some information on the case.
Rhonda Bonner was injured under an Allstate personal automobile policy when she was injured in an accident caused by an uninsured motorist in October 1997. Bonner submitted notice for personal injury protection(PIP) benefits along with a bill for $1,802. Allstate acknowledged and paid the claim. Bonner then submitted a claim for uninsured motorist (UM) benefits under the same policy on December 11, 1997. Allstate received the demand letter on December 15, 1997, but did not acknowledge receipt of the letter until January 16, 1998. Section 542.055 says an insurer must acknowledge receipt of a claim, "Not later than the 15th day ... after the date an insurer receives notice of a claim, ...."
Allstate eventually denied Bonner's UM claim. Bonner sued Allstate to recover the UM benefits. Bonner alleged injuries and alleged Allstate violated the Prompt Payment of Claims statutes. Bonner sought recovery of her damages, attorney's fees, and costs.
At trial, the jury compensated Bonner only $1,000 for her medical care and nothing for her physical pain and suffering and impairment claims and awarding her $7,500 for attorney's fees. Because Bonner's policy contained a nonduplication-of-benefits provision, and because the PIP payment exceeded the $1,000 UM damage award, the trial court rendered judgment that Bonner take nothing. The trial court refused to award Bonner attorney's fees and taxed cost of court against her.
In analyzing this case the court reviewed the statute. Section 542.060 is titled, "Liability for Violation of Subchapter." Part (a) states, "If an insurer that is liable for a claim under an insurance policy is not in compliance with this subchapter, ... the insurer is liable to pay the holder of the policy, ... in addition to the amount of the claim, ... reasonable attorney's fees." In reviewing this statute and reviewing other cases dealing with this subject, the court said that since Allstate was not liable under the policy in that they had already paid enough per the jury verdict, there was no penalty to be awarded.
In conclusion, the court stated, "Although Allstate failed to acknowledge Bonner's claim within fifteen days, Bonner has not presented a claim under her insurance policy for which Allstate is liable. As a consequence, Bonner cannot recover attorney's fees under Insurance Code (Section 542.060)."
A reading of the Prompt Payment of Claims statutes has to be very careful. Violations turn on, (1) the type of insurance company, (2) the type of claim, (3) the liability under the claim, (4) the information required to investigate the claim, and other conditions that have to be looked at carefully to be able to decide if an actual violation has occurred. An experienced Insurance Law Attorney is needed to look at the facts of each case and evaluate those facts against the backdrop of these statutes in order to determine if there has been a violation.

People in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Willow Park, Brock, Hudson Oaks, Millsap, Cool, Peaster, Palo Pinto, and other places in Parker and Palo Pinto Counties may wonder: How long does the insurance company have to pay the claim?
The "Prompt Payment of Claims statute" is found in the Texas Insurance Code, Sections 542.051 thru 542.061.
The "Prompt Payment of Claims statute" imposes certain deadlines for an insurance company to acknowledge, investigate, and accept or reject a claim. An insurance company that violates the statute is liable for attorney's fees and an additional 18% per annum in addition to the amount of the claim.
The statute sets out the steps an insurer must follow when presented with a "first party" claim by an insured.
To recover a penalty under the statute act, an insured must establish that:
(1) the insured had a claim under an insurance policy;
(2) the insurer is liable for the claim; and
(3) the insurer has failed to comply with a requirement of the Act.
This was made clear in a 2001, Texas Supreme Court case styled, Allstate Insurance Company v. Bonner.
In the Bonner case, the Court considered whether an insurance company that did not comply with the claim acknowledgment deadline could be held liable under the statute even though the insurance company ultimately did not owe the claim. In that case, that insured was awarded less on her uninsured motorists claim that the insurance company had already paid in personal injury benefits. Nevertheless, Bonner argued that Allstate's violation entitled her to recover attorney's fees under the statute. The Court rejected this argument and held that for an insurance company to be liable under the Prompt Payment of Claims statutes, a party must establish the three elements listed above.
The Bonner case decision raises questions whether an insurance company can always disprove a claim thereby avoid liability for violating the statute, or whether the court's holding is limited to the circumstance presented in that case.
The statute's purpose is "to promote the prompt payment of insurance claims pursuant to policies of insurance." This per Section 542.054.
This statute, which was revised in 2005, made several changes compared to prior laws. It applies to more insurance companies and more kinds of insurance. It imposes more deadlines. It also imposes a bigger penalty -- 18% per annum, instead of a flat 12%. The statute was intended to enhance the protections for insureds and claimants, and strengthen the incentives for prompt claims handling by insurance companies.
An experienced Insurance Law Attorney is going to be needed to know whether or not the insurance company had violated the statute . The rule varies based on the type of claim and what the insurance company needs from the insured to properly investigate the claim. Many adjusters violate the provisions of this statute. These adjusters rely on the lack of knowledge most people have regarding the proper way for these claims to be handled.

Insured people in Grand Prairie, Fort Worth, Dallas, Lake Worth, Benbrook, Saginaw, Crowley, Mansfield, and other places in Tarrant County and Texas need to be cautious when dealing with their insurance company agent.
A case from the Austin Court of Appeals decided in 2000, is a good example of the above. The style of the case is, "Stan Stumph, d/b/a Concrete Concepts/Dallas Fire Insurance Company v. Dallas Fire Insurance Company/Stan Stumph, d/b/a Concrete Concepts."
Here is some background.
Stumph is the sole proprietor of Concrete Concepts. In 1992, Stumph purchase a commercial policy from Dallas Fire (the "first policy"). The first policy was purchased through Dallas Fire's local recording agent, don Harvey. Harvey owned Emerald Insurance. The policy was to be in effect from November 17, 1992, through November 17, 1993. Stumph made a down payment on the policy's premium and financed the remainder through a premium finance company, to whom he sent monthly payments. The premium finance company forwarded the payments to Harvey. Harvey was to send the payments, minus a commission, to Dallas Fire. Dallas Fire did not receive Stumph's payments and eventually discovered that Harvey had not forwarded payments on other accounts as well. On July 14, 1993, Dallas Fire quit doing business with Harvey.
Shortly after this, Dallas Fire sent a cancellation notice to Stumph, stating that his policy would be cancelled on July 26, 1993, for "non-pay agent to co." Upon receiving the cancellation notice, Stumph called Harvey. Harvey told Stumph to continue making payments as usual and that this "had to be a paperwork mix-up." Stumph then called Dallas Fire and spoke to Liz Jennings, an "underwriter" at Dallas Fire. There is a disagreement about their conversation but Stumph claims Jennings told him that there must have been a "mix-up," Harvey was a "good man," Stumph should continue to make payments to Harvey and should keep his canceled checks, and Jennings would call him if he needed to send the checks to her or if there was a "problem."
This continued with a second policy (the "renewal policy"). With the renewal policy however, Stumph made the monthly premium payments directly to Harvey. Soon a claim was made against the policy.
In September 1994, Stumph sued Harvey, which settled, then later he sued Dallas Fire for violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA).
Dallas Fire asserted they could not be sued because they had suspended Harvey's authority to issue policies. Stumph countered by asserting that Jenning's conversation with Stumph created apparent authority for Harvey to issue Dallas Fire policy's and that Stumph relied upon that apparent authority.
This court found that Dallas Fire was liable for misrepresentations by its underwriter that Stumph could continue to send premium payments to Harvey, described by the underwriter, Jennings, as a "good man" but who was in fact suspended.
This case is a situation where an employee, in this case the underwriter, made misrepresentations that the insured relied on and as a result suffered harm. Usually the misrepresentation is made by the insurance agent or there is a misrepresentation in the policy itself.
This situation, where the insured payed his premiums, suffered a loss, then made a claim that was denied, is exactly the type of insurance wrong doing where an Insurance Law Attorney is needed to assist the insured.

Misrepresentations to people in Grand Prairie, Fort Worth, Dallas, Duncanville, De Soto, Lancaster, Cedar Hill, and other places in Texas can be a reason to sue an insurance company when the misrepresentation causes harm.
This issue is discussed in a 1987, Texas Supreme Court case styled, The Aetna Casualty and Surety Company v. Robert W. Marshall.
In this case the court upheld a verdict wherein The Aetna Casualty and Surety Company, (Aetna) was found to be guilty of making a misrepresentation by contractually promising benefits and then refusing to pay them.
The facts are, briefly, that Marshall sustained an occupational injury to his back in 1976. Marshall filed his worker's compensation claim, and after an award from the Industrial Accident Board and an appeal to the district court of Brazoria County, Marshall settled his claim with Aetna for $20,000 and the payment by Aetna of all past medical expenses. Additionally, the settlement included a provision for payment by Aetna of future medical costs, as follows:
Any future medical aid, surgery, hospital services, nursing, chiropractic service, medicines and rehabilitation benefits for the injuries made the basis of this lawsuit, provided that such medical care and treatment is incurred within five (5) years from the date of this Judgment and rendered by or at the direction of a competent physician will be paid by the defendant, Aetna Casualty & Surety Company.
Almost immediately after the settlement, Marshall encountered difficulties with Aetna in obtaining payment for his medical expenses. Evidence shows delays in payment of medical bills by Aetna varying from four to five months, up to seventeen months, as well as an outright refusal by Aetna to reimburse for some prescribed medication. At the time of the trial, medical bills totaling $355 were still unpaid. Aetna's adjuster even called one of Marshall's doctors, stating that it would not pay Marshall's current bills nor any future bills submitted by the doctor. Aetna refused to allow Marshall to attend a pain clinic recommended by one of his doctors. Marshall offered evidence showing that Aetna had been repeatedly advised of its mistake.
Marshall elected to file suit under the Insurance Code with its provision for treble damages, alleging also a breach of a duty of good faith and fair dealing. The jury found in Marshall's favor and this appeal resulted.
Texas Insurance Code, Section 541.151, makes actionable any violation of Texas Business & Commerce Code, Section 17.46. Marshall alleged that Aetna violated Section 17.46 by representing to him that it would provide benefits by the agreement and then failing to do so. Aetna argued that Marshall could not recover under that statute because he was not a consumer of goods or services and because a court judgment is not an insurance policy. The court pointed out that Section 541.151 did not incorporate the entire Deceptive Trade Practices Act which would require proof that Marshall was a consumer of goods or services. Instead, it provided a cause of action to a person who has been injured by an insurance carrier who engages in an act prohibited by Section 17.46.
The court said that Aetna's contention that a judgment is not an insurance policy is likewise irrelevant. The question was simply whether Aetna engaged in conduct prohibited by Section 17.46. The jury found that Aetna misrepresented the medical benefits that it would pay under the agreed judgment. The terms of the agreement called for Aetna to pay Marshall's medical bills incurred because of his back injury, while Aetna represented to Marshall that it had the right to pay only the bills from doctors whom they approved.
Current law in the Texas Insurance Code makes it less necessary for a wronged insured to seek remedies under the Texas Deceptive Trade Practices Act. But it is still good for an Insurance Law Attorney to have even more legal recourses against an insurance company when the company treats one of their insureds wrong.

People in Grand Prairie, Arlington, Saginaw, Bedford, Hurst, Euless, Grapevine, Colleyville, Grapevine, Keller, Boyd, Newark, or anywhere else in and around Tarrant County should know a little bit about the insurance company they are buying their insurance from.
The Texas Department of Insurance is a good resource to use to learn about almost all insurance companies doing business in the State of Texas. Their web-site is easy to navigate and contains lots of useful information on insurance companies and insurance agents and insurance adjustors. It has information related to licensing and information related to complaints filed. There is also a lot of information about the financial viability of the companies.
The site has lots of general information. Surfing their web-site will usually result in finding out information you did not know and are glad you discovered.
The Houston Chronicle published an article on November 4, 2011, titled, Farmers Insurance Leads in Consumer Claim Complaints. The article is written by Purva Patel, who has written numerous articles covering the insurance industry in Texas.
The article tells us that Farmers Insurance has received more complaints about its handling of homeowners claims than any other insurer in Texas, yet it is the third largest insurer. Most people only look at prices when shopping for insurance. But rest assured, that when if comes to making a claim for benefits that you want an insurance company that is going to be responsive to your claim and fulfill their responsibilities under the contract of insurance. The number of complaints filed against Farmers is 207, between October 1, 2010, and September 30, 2011.
State Farm, the largest insurer had 198, while Allstate the second largest insurer, had 159. The number of complaints does not tell the whole story because many people do not file legitimate complaints because they either do not know how or they hired an attorney who helped to get the situation resolved.
A spokesman for Farmers says, "Everyone we deal with is dealt with as fairly, efficiently and as quickly as we can to resolve their issues, and we work very diligently to resolve each and every claim."
The number of complaints for most all insurance companies is small compared with the thousands of claims handled each year. But again, the number of complaints actually filed does not usually tell the whole story.
Texas Watch, a consumer watchdog group, says the data is still an important measure of how companies stack up against each other.
A spokesman for Texas Watch says "Farmers stands out as a company with more complaints than anyone else, and that's a very telling distinction."
The data does not include complaints about coverage or premium issues, but those dealing with payment delays, underpayments, denials and other matters pertaining to how claims are handled.
Unfortunately from a evaluation standpoint, the numbers do not break down how many complaints are justified. What is relevant though is that the Texas Department of Insurance can dismiss complaints without investigating if it feels the complaints fall outside its jurisdiction.
The spokesman for Texas Watch said "We weren't interested in what TDI thought of the complaints. We were interested in how many people were registering dissatisfaction with their carrier."
The arthur of this blog would suggest that an experienced Insurance Law Attorney should be consulted before filing a complaint with TDI. The reason is that the wording used in the complaint needs to be proper in case a lawsuit ensues. The person filing a complaint does not want something they wrote in a complaint to come back and hurt their claim.

People in Weatherford, Aledo, Azle, Hudson Oaks, Willow Park, Mineral Wells, Millsap, Brock, Cool, Springtown, Peaster, Poolville, Whitt, and other places in Parker County need to make sure they know what they are doing when they sign a release for a claim they have against an insurance company.
The Texas Court of Appeals, Amarillo, issued an opinion on October 25, 2011. The style of the case is Trisha Braziel, Spencer Braziel and Kathy Wright v. Becton Insurance Agency, Inc.
This case was an appeal from a Motion For Summary Judgement which was granted against the Braziels and Wright.
Wright and the Braziels sued to recover damages allegedly suffered when a fire burned a home owned by the former and leased to the latter. Wright who purchased insurance on the abode from Travelers Lloyds of Texas Insurance Company (Travelers) through Becton (i.e. Travelers' agent) and alleged that Becton had been instructed to name the Braziels as additional insureds. Becton apparently failed to abide by the directive, though the trial court nonetheless found that the occupant's contents (that is, those of the Braziels) were covered by the policy. Eventually, Travelers, Wright, and the Braziels settled their dispute and executed an agreement releasing Travelers. It paid Wright $94,391.15 to satisfy her claim under the policy and an additional $25,000 to Wright and the Braziels in exchange for the release.
In his motion for summary judgment, Becton asserted that he was not liable because Wright and the Braziels settled with and released their claims against Travelers.
In reviewing the case the court noted that no one disputed that a settlement was had with Travelers and that a release was executed as part of that agreement. Per that document, Wright and each Braziel bound themselves to "RELEASE, ACQUIT, and FOREVER DISCHARGE Travelers from any and all Event Claims including those asserted, whether accrued or unaccrued, whether known or unknown, whether existing or that may arise hereafter." Furthermore, the settlement contract they signed defined not only the term "Travelers" but also "Event" and "Claims." Within the scope of "Travelers," the parties agreed to include not only the insurance company itself but also "... all of its past, present, and future underwriters, officers, directors, stockholders, agents, attorneys, insurers, servants ..." and others. In turn, "Event" was interpreted to mean "the fire loss occurring on or about December 8, 2007," while "Claims" was defined as "any and all past, present and/or future claims, demands ... settlements and causes of action ...."
Included in the court's record on this case was a copy of an agreement between Becton and Travelers. Through it, Travelers designated Becton as its "agent," and in accordance with that designation, Becton's name appeared under the moniker "Agent's Name and Address" in the insurance policy issued by Travelers to Wright. No one disputes that Wright and the Braziels seek damages from Becton and that the damages pertain to the loss caused by the fire occurring on or about December 8, 2007.
Based on the plain language of the release the court ruled in favor of Becton.
The relevance of this case is pointing out that a person needs to know what they are signing when they sign a release. It appears that Wright and the Braziels wanted to preserve their claim against the agent, Becton, but the language of the release they signed prevented them being able to pursue the claims against him. One way of preventing this is to see an experienced Insurance Law Attorney.

Home owners in Grand Prairie, Arlington, Grapevine, Colleyville, Irving, Crowley, De Soto, Dallas, Fort Worth, Mesquite, Lake Worth, and other places in the DFW metropolitan area do not have some of the fears and concerns that home owners along the Gulf Coast have. But there are always concerns about claims denials resulting in a homeowner taking a loss. So, being aware of other ways of recovering losses is important.
The Miami Herald ran a story on October 26, 2001, titled Homeowners File Lawsuit Against Chinese Drywall Manufacturer, Distributor.
The history of these Chinese drywall claims is pretty easy to follow. After storms hit the Gulf Coast area in the early part of this decade, a lot of the damaged homes were repaired using Chinese drywall. This drywall was defective causing problems with home owners and devaluing effected homes.
The article tells us that lawyers representing South Florida homeowners with defective Chinese drywall went on the offensive, pursuing separate legal claims against both the manufacturer and a distributor of the toxic product.
In Miami-Dade Circuit Court, a group of lawyers pressed for punitive damages against the German-based drywall manufacturing company Knauf and its Chinese outpost Knauf Plasterboard (Tianjin) Co. The homeowners' original complaints sought compensatory damages, and the motion for punitive damages could potentially lead to steeper penalties if Knauf is found to be liable for the tainted drywall used during the re-builds.
Knauf manufactured millions of sheets of Chinese drywall, which contains toxins that can corrode pipes and electrical wiring in homes, emit foul odors and cause breathing problems.
"They engaged in conduct that endangered every American consumer that had defective drywall," said the homeowners attorney. He compared the drywall to a "ticking time bomb." "They concealed it from the American consuming public in order to protect their financial interests."
The Judge presiding over the case, stopped short of allowing all plaintiffs to seek punitive damages, indicating that the individual cases will have to be heard on their merits, saying, "Each plaintiff must meet his or her burden of proof."
The article tells us that the cases are complex and likely to be drawn out because of the large number of parties and allegations involved.
Knauf maintains they have acted in good faith with respect to drywall it sold in the United States. Knauf cited proof of their good faith by pointing out their remediation program, which was the company's idea.
As South Florida homeowners seek to recover damages from the drywall manufacturer, they are also going after the Miami-based distributor that bought more than a million sheets of Chinese drywall from Knauf.
A new lawsuit filed against Miami-based Banner Supply Co. claims that the company kept distributing the Chinese drywall even after it learned about the defects, and entered into a secret agreement with Knauf to keep silent.
The lawsuit alleges that company directors Arthur and Jack E. Landers learned the drywall was defective back in 2006, but conspired with the manufacturer to conceal the problem from homeowners. The lawsuit claims Banner engaged in a secret agreement with Knauf to replace its supply of defective drywall with U.S. made drywall and remain silent about the defects.
Banner denied the allegations.
An attorney for Banner said in a statement, "While it may be easiest to pursue a small, Florida-based company rather than focus on the German conglomerate that manufactured the defective drywall, the fact remains that Banner Supply didn't create the drywall problem."
For its part, Banner agreed to a $54.5 million settlement with more than 3,000 affected homeowners, some of whom have opted out to pursue separate claims. Banner also launched a $100 million lawsuit against Knauf.

People needing an attorney in Grand Prairie, Arlington, Mansfield, Irving, Fort Worth, Dallas, and other places in Texas will probably get confused on this case and realize the necessity of hiring an experienced Insurance Law Attorney.
The Amarillo, Court of Appeals, issued an opinion on October 17, 2011, styled, In Re Farmers Texas County Mutual Insurance Company. This is a case where Farmers was seeking the issuance of a writ of mandamus from this appeals court. Farmers was asking this court to issue an order to Judge Carter Schildknecht of the 106th Judicial District Court of Garza County, Texas, to abate trial on extra-contractual claims asserted by real-party-in-interest, Terry Henrie. This court denied Farmers request.
Here is some background.
In September 2008, Henrie was involved in an auto accident when William Rainey collided with Henrie's parked vehicle. Henrie sued Rainey and, later sued Farmers, his personal auto carrier. The suit against Farmers was for failure to pay uninsured motorist (UIM) benefits, and extra-contractual claims for breach of the duty of good faith and fair dealing and for violations of the Texas Insurance Code.
In July 2011, Farmers filed a plea in abatement requesting the Judge to abate all extra-contractual claims until after resolution of the UIM claim. The court denied the plea on August 30, 2011. In a letter, dated September 30, Farmers informed the Judge that it "made a settlement offer to conclude the entire contract claim" of Henrie. Trial was scheduled for October 14, 2011.
Farmers contended that Texas law established that, when an auto insurance carrier makes a settlement offer for a UIM claim, a trial court is without discretion and must abate extra-contractual claims until the contractual UIM claim is resolved. Because the Judge did not abate the extra-contractual claims, Farmers contended it is entitled to mandamus relief.
In its analysis of this case, this court recognized that "mandamus" relief will issue only to correct a clear abuse of discretion for which the relator has no adequate remedy at law. The court agreed with Farmers that Texas case law establishes that abatement of extra-contractual claims is required in most instances in which an insured asserts a claim to UIM benefits. However, in a mandamus context, for a party to preserve its complaint that the trial judge failed to abate extra-contractual claims, that party must have brought the issue to the trial judge's attention by seeking the issuance of an abatement order from the trial judge.
This court notes that nothing in Farmer's petition for mandamus established that it sought an abatement order from the trial judge on the grounds upon which it now seeks mandamus relief. In July, Farmers filed a plea in abatement in which it raised the issue of abating Henrie's extra-contractual claims until his contractual UIM claim could be resolved. The trial judge held a hearing on this plea on August 30, at which the trial judge denied Farmer's abatement plea. In a letter to the Judge, Farmers informed the court that, at a September 29 mediation, it made Henrie a settlement offer to conclude his entire contract claim. The remainder of the letter read as follows:
"We appeared before you on August 30. On the record, you denied and overruled defendant's Plea in Abatement. I am enclosing a copy of the order to memorialize your ruling which was prepared by plaintiff's counsel and I have approved as to form only.
Unless you have reconsidered your ruling, we would ask that you now sign and enter the enclosed order to facilitate appellate review of the same."
Notably, this letter does not request the trial court reconsider its denial of Farmer's plea in abatement in light of its settlement offer to Henrie. However, Farmer's mandamus petition alleges that the Judge clearly abused her discretion by failing to abate Henrie's extra-contractual claims after Farmers made a settlement offer on Henrie's entire contract claim. As such, Farmers has failed to to preserve its complaint by failing to seek an abatement order from the trial judge on the grounds upon which it now seeks mandamus relief.
In making its ruling, this court stated, "Consequently, we cannot conclude that the trial court clearly abused its discretion or that Farmers does not have an adequate remedy available at law. Having failed to establish its entitlement to mandamus relief, we deny Farmers's petition."

Anybody in Weatherford, Mineral Wells, Aledo, Azle, Hudson Parks, Willow Park, Brock, Millsap, Cool, Springtown, or anywhere else in Parker County, who owns a home, will find this interesting.
The Houston Chronicle published a story on October 13, 2011, titled, Home Insurance Rates Rise As Coverage Falls. The author is Purva Patel who has written several article on insurance in Texas.
The article tells us that the insurance companies in Texas are dropping or decreasing certain coverages to allow them to control costs and, in turn, keep a handle on the rates they charge. Consumer groups say its a reflection of lax oversight by the Texas Department of Insurance (TDI) and regulations coming out of Austin.
Since about eight years ago, many insurance companies in Texas have limited coverage for mold damage, limited wind damage coverage to named storms and in some cases eliminated windstorm coverage altogether in coastal areas.
The state's largest insurer, State Farm, recently said it plans to move new and renewing customers to a minimum 1 percent deductible starting December 2011. This means deductibles will be calculated as a percentage of a home's insured value rather than a flat dollar amount, increasing how much homeowners would pay out of pocket before collecting on insurance claims.
Reports from TDI reported earlier this year that a survey of insurance companies making up 90 percent of the Texas market found that many dropped or reduced coverage compared to the standard homeowners policies they sold before laws changed in 2003.
Eighty-seven percent of the insurance companies had less coverage for leakage from plumbing, air conditioning or heating; 72 percent had less coverage for sewer backups and 67 percent had less coverage for foundation and slab damage. An example would be that now some insurance companies cover water damage from sudden pipe breaks, but not from slow or repeated leaks. Aren't most of these damages the result of slow leaks over time?
The consumer group, Texas Watch, says the numbers are pretty clear, "Consumers are not getting the same level of protection they were getting under the standard form. And we are paying more now than we were then. So we are paying more and getting less."
Texas Watch blames the changes in the law that occurred in 2003 for creating a climate that allows companies to raise prices and lower coverage with less oversight than is needed. These changes were passed by the Legislature when mold claims were creating a financial crisis.
Current rules regarding policies allow the insurance companies to file new policies with TDI and to immediately start using them. It is only later that if the changes in the new policies are disapproved that refunds can be ordered based on the offending part of the policy.
What is important to realize is that this is a political battle wherein the politicians are allowing the insurance companies to operate without meaningful oversight.
Texas Coalition for Affordable Insurance Solutions, an insurance company lobby group, says letting the TDI preview changes before officially filing notice, leads to haggling that can delay the process.
According to figures released by the National Association of Insurance Commissioners, Texas has the most expensive homeowners insurance premiums in the nation. According to the report, the average annual premium in Texas is $1,460 for the most common type of homeowners policy sold across the country.
Insurance company representatives say the report is misleading because it does not reflect the range of policies sold in the state, some of which are cheaper than one used for the comparison.
What they do not dispute is that rates in Texas have grown.
Since the laws changed in 2003, rates have increased 5.1 percent.
Both, State Farm and Farmers have recently filed notices to hike rates.
The insurance industry argues that the increases are justified due to higher costs such as the rising price of building materials.
The bottom line appears to be that you are paying more for less and if you have a claim that is being denied, contact an Insurance Law Attorney.

If someone in Grand Prairie, Arlington, Crowley, Mansfield, Benbrook, Burleson, Keene, or anywhere else the metroplex area reads their homeowners insurance policy, they will probably find an appraisal clause. This clause usually, is for the benefit of the insurance company. As a result, getting around that clause is a good thing.
The United States District Court for the Southern District of Texas, Houston Division, issued an opinion on October 13, 2011, that is insightful for understanding at least one way of beating the appraisal clause. The style of the case is, Sidney Sam, et al. v. National Lloyds Insurance Company.
Sam and others (Plaintiffs) were insured under a Standard Flood Insurance Policy (SFIP) issued by Lloyds pursuant to the National Flood Insurance Program (NFIP). Plaintiffs' apartment building was damaged by flood waters following Hurricane Ike. Plaintiffs submitted their claim to Lloyds, which determined that the flood damage to the building and its contents would require repairs in the amount of $100,622.67. Plaintiffs submitted a request for supplemental payment in the total amount of $249,000, or an additional amount of $148,377.33 beyond the amount offered by Lloyds. The additional payment included $39,000 for the presence of a "Commercial Superintendent on the site for 3 months for commercial restoration." On April 21, 2010, Plaintiffs demanded an appraisal. On May 3, 2010, Lloyds denied the request. Plaintiffs filed a Motion to Compel Appraisal on September 15, 2011.
As analysis, this court cited a 5th Circuit ruling in the case, Dwyer v. Fidelity Nat. Prop. and Cas. Ins. Co. saying, "Congress created the NFIP to offer flood insurance at rates that were uneconomical for private companies." The Federal Emergency Management Agency (FEMA), which administers the program, has established the SFIP.
The SFIP includes an appraisal provision, allowing either party to demand an appraisal "of the loss" if they cannot agree "on the actual cash value or, if applicable, replacement cost of the damaged property to settle upon the amount of loss." This appraisal clause can be invoked only to resolve disagreements between the parties regarding the actual cash value or, if applicable, replacement cost of the damaged property. "Congress expressly limited the application of the appraisal clause to matters where coverage is not at issue and the only dispute remaining between the parties is the quantum of loss ...." Where the insured requests compensation for items that the insurer asserts are not covered by the SFIP, the dispute is outside the ambit of the appraisal clause.
In a Florida case cited by the plaintiffs, the Florida court noted that the insured both challenged the extent of damage to items which were admittedly covered and requested compensation for additional items. As a result the Court in that case held that the dispute was "outside the ambit of the appraisal clause." Similarly, in this case, there are disputes regarding how badly a covered item was damaged and whether it needed to be repaired or replaced, as well as disputes regarding whether other items - such as the presence of the commercial superintendent - are covered at all. This inclusion of a coverage dispute places the case outside the appraisal clause of the SFIP.
In another case, virtually indistinguishable from the present case, the insureds sought supplemental payment for several items, including reimbursement for packing and storing the contents of their residence. The insurer argued that packing and storing the contents of the residence were items not covered by the SFIP. The Court noted that the dispute regarding the packing and storing charges was a dispute over coverage for those charges and, as a result, held that the appraisal clause was not implicated.
This court then said that the request for packing and storing charges in that case is similar to this case. This case seeks reimbursement for the cost of having a commercial superintendent on the property for three months. As a result, Lloyds asserted that the SFIP does not cover this expense. The dispute is whether this expense is covered, not whether $39,000 is a reasonable cost for the superintendent. Because the parties do not agree about whether this item is covered, the dispute does not relate exclusively to the actual cash value of the loss or its replacement value and does not implicate the appraisal clause.
End result - the court refused to order appraisal.

Few people in Grand Prairie, Arlington, Mansfield, Fort Worth, Hurst, Euless, Bedford, or other places across Tarrant County like the use of credit scoring to get insurance. It is allowed in Texas.
The Insurance Journal ran a story on October 6, 2011, titled "Mass. Agents Gathering Signatures for Insurance Credit Score Ban."
The article tells us that a Massachusetts independent agents group is confident that banning auto insurers' use of credit scores and other socioeconomic factors will become law in coming months.
According to the article, The Massachusetts Association of Insurance Agents (MAIA) said it is preparing member agencies to start gathering 69,000 signatures to register voters to put this question on the 2012 state ballot.
Massachusetts is already one of a few states with strict policies on the use of credit scores and other socioeconomic factors. Regulators there will not approve rate filings for auto or homeowners insurance that include the use of credit scoring. But supporters of the ban want it signed into law so that a different administration will not change it.
Only one state, Hawaii, has a law that bans the use of credit reports for auto insurance underwriting and rating, according to the Insurance Information Institute. Proposition 103, in California, prohibits the use of a credit score for rating auto policies unless specifically allowed by the regulator.
Washington State, passed a law in 2002, prohibiting cancellations after 60 days and non-renewals based on credit scores. Maryland bans the use of credit in homeowners policies and in auto insurance underwriting decisions on existing business.
So far, 26 states have adopted laws and regulations based on a model law by the National Conference of Insurance Legislators (NCOIL), according to the Property Casualty Insurers Association of America.
This law requires insurers to disclose to consumers that a credit report may be used and to notify the policyholder in compliance with the Fair Credit Reporting Act when credit is the basis for an adverse action. It prohibits the use of credit information as the sole basis for refusal to insure, to non-renew or cancel. It also bans the use of disputed data or information identified as medical collection accounts in the credit report. And it encourages insurers to take into account extraordinary life events, such as catastrophic illness or the death of a spouse.
Credit factors are used because insurers and actuarial studies have shown a consistent link between low credit scores and auto insurance claims. Actuarial studies have shown that how a person manages his or her financial affairs is a good predictor of insurance claims. Most people have no idea they are beneficiaries of credit-based insurance scoring.The insurance company, Nationwide, states that studies show incorporating a credit-baased score and credit history allows the company to better predict insurance losses. Other rating factors in addition to credit that influence auto insurance premium include: age or driving experience; how the vehicle is used; driving and claims history; make and model of the vehicle; and geographic location. According to Hartford, Conn., based insurance research firm Conning & Co., more than 90 percent of all insurers use credit information when determining premiums.
This is an issue that is not going to go away. People for credit scoring say it is necessary for the insurers to properly evaluate risk. Those people against credit scoring say that it unfairly discriminates against those people who have smaller incomes.

Everyone in Grand Prairie, Arlington, Fort Worth, Dallas, Irving, Mesquite, Garland, Carrolton, Duncanville, De Soto, and other places through out Texas need to know how to make sure they get paid properly and fully when making a homeowners claim.
One way is to see an experienced Insurance Law Attorney early in the claim. Another way is to make sure you have good records of your possessions.
The Wall Street Journal published an article on October 13, 2011, authored by Lori Bennett. The title is "Accounting for Disaster: Itemizing Your Home."
The article tells us that while fire and theft are always concerns for homeowners, that Mother Nature has been the challenge this past year. Mother Nature has delivered blizzards, tornadoes, floods, a hurricane and even an East Coast earthquake. Can you remember?
The Insurance Information Institute statistics report that insured catastrophe losses for 2011 already exceeded $13.6 billion reported in 2010.
What one needs to know is the best way to be prepared for natural disasters when it comes to re-couping those losses, is to keep careful records of belongings. Keeping those records somewhere besides the home is better than keeping them in the home.
The article is informative in listing several web-sites that assist in keeping these records. When these records are kept on a web-site or "in the cloud" they are there when and if you need them.
An experienced Insurance Law Attorney will tell you to take photographs of everything of value in your home. To also have a video. The video should start outside your front door showing a picture of the front of the house. This captures those items that are in front of the house such as any lawn furniture, wreaths on the door, little welcome signs and such. Then enter the house, going room to room. Open closet doors, open cabinets, drawers, and anything and everything that may be closed or shut. Don't forget the basement and attic. Then go into the backyard and capture on the video everything that is outside. Also, do not forget the garage, storage buildings, and anything you may have on the side of the house.
What seems like small items that add up when making a claim for a total loss are items in the kitchen cabinets and pantries and under the kitchen sink and such. Think how much that little container of a special spice costs in the store. Think about the price of all those containers of spice that need to be replaced!
Then the bathroom. What do all those cosmetics cost?
As can be seen, there are lots of everyday items that you will loss in a fire or other catastrophic loss that you would have a hard time thinking about if a loss occurred.
But thinking of all the items that can be lost is only part of the consideration if you find yourself having to do this. The other part is placing a value on these items and proving the value to the insurance company. That is where keeping receipts and good records comes into play. An examination of credit cards and business records helps but having that receipt is great.
Lots of items you will not have receipts for. So what do you do? Well, get on the internet and start looking up the prices on those items at the stores where you buy them.
Before a loss ever occurs, your insurance agent should be able to sit down with you and evaluate the amount of insurance coverage you need. There are always going to be items that require special coverage, such as antiques, jewelry, firearms, etc., otherwise you may not get full reimbursement for these items even though you have proof or their existence and value.
A few of the web-sites listed in the article are lockboxer.com, knowyourstuff.org, stuffsafe.com and Quicken Home Inventory Manager. These are either free or relatively cheap.

Farmers and ranchers in Weatherford, Mineral Wells, Aledo, Springtown, and other places in Parker or Palo Pinto counties may have to deal with crop insurance issues on occasions. Here is a legal case that deals with crop insurance.
The case was decided by the United States District Court, Eastern District of Texas, Paris Division, in 1997. The style of the case is John Earl Bullard v. Southwest Crop Insurance Agency, Inc., Blakely Crop Hail, Inc., Farmers Alliance Mutual Insurance, Co.
There is a federal law called the Federal Crop Insurance Act. Due to the inherent risks of insuring crops, insurance companies in the early 1900's refused to write multi-peril crop insurance policies. In an effort to remedy the problem, Congress passed the Federal Crop Insurance Act (FCIA) in 1938. Is purpose was to "promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance ...." To carry out this purpose, Congress created an agency within the Department of Agriculture known as the Federal Crop Insurance Corporation (FCIC). The FCIC assists in carrying out the goals of the FCIA by providing crop insurance to farmers in the following ways: (1) selling insurance through private insurance agents, (2) reinsuring private insurance companies that provide crop insurance, and (3) providing crop insurance directly to the farmer.
In this case, Bullard seeks benefits allegedly due under a multi-peril crop insurance policy purchased from Southwest to cover Bullard's 1995 nursery crop. This policy was reinsured by the FCIC under the provisions of the FCIA.
In 1995, Bullard made a claim for benefits . The insurers denied the claim. Bullard filed a lawsuit in State District Court alleging (1) breach of contract; (2) violations of the Texas Deceptive Trade Practices Act; (3) violations of the Texas Insurance Code; (4) negligence; (5) negligent misrepresentation; (6) breach of duty of good faith and fair dealing in settling an insured's claim for loss; (7) breach of duty of good faith and fair dealing to timely adjust a claim; (8) conspiracy; and (9) declaratory judgment. The insurers removed the case to Federal Court, alleging federal question jurisdiction pursuant to 28 U.S.C. Section 1331. In so doing, the insurers alleged the FCIA and its corresponding regulations completely preempt all state law causes of action against FCIC-reinsured entities and that Bullards failure to plead violation of the federal laws was an attempt to avoid federal court.
In response, Bullard asserted that the FCIA does not completely preempt his state law causes of action and, since he has pled no federal claim, the federal court should remand the case back to the state court. Thus, the ultimate question at this point for this federal court was whether or not removal jurisdiction existed over Bullard's state law claims.
The court noted that Bullard alleged the nine state law causes of action noted above. That he did not mention mention or implicate the FCIA or any federal law. Yet, the defendants are alleging federal question.
This federal court then began a several page discussion of the laws regarding removal, the "artful pleading doctrine" and the federal laws regarding crop insurance and associated legislation and the intent of the legislation.
The court noted that the present version of section 1508(j) was created by the passage of H.R. 4217 on October 13, 1994. A previous version of H.R. 4217 which was adopted by the Senate read: "if a claim for indemnity is denied by the Corporation or by the private insurance provider, an action on the claim shall only be brought against the Corporation or Secretary 'or insurance provider' in the United States District Court ...." However, the final version passed by both the House and Senate reads: "if a claim for indemnity is denied by the Corporation or by the private insurance provider, an action on the claim may be brought 'against the Corporation or Secretary' only in the United States District Court ...."
By opting to exclude the phrase "or insurance provider" in the final version, Congress appears to have addressed the exact subject at issue in the present case. If Congress had included this phrase, it would have clearly granted federal jurisdiction over suits against insurance providers. It declined to do so.
In short, this case did remand the case back to the state court.
This is a case where, once again insurance companies are trying to have a case against them, removed to federal court. They believe that their chances of prevailing in claims against them are much better when the claim is in federal court rather than state court.

Someone in Weatherford, Mineral Wells, Aledo, Azle, Hudson Oaks, Willow Park, Millsap, Brock, Cool, Peaster, or anywhere else in Parker County may wonder how to make a claim for uninsured motorist benefits. READ ALL THE WAY TO THE END TO GET THE ANSWER.
The Texas Supreme Court issued an opinion in 1970, in the case styled, State Farm Mutual Automobile Insurance Company v. William A. Matlock et ux. In this case the court reversed its earlier opinion and the ruling of the trial court and the court of appeals. This reversal resulted in William Matlock and his wife taking nothing in their lawsuit against State Farm.
The Matlocks suffered injuries in an accident with a car driven by a man identified in the court record only as a man with one leg. They knew the name of this man, but did not testify about his name. Upon the theory that he was an uninsured motorist and without joining him as a defendant, the Matlocks filed a lawsuit against their own insurer, State Farm, and asserted its liability under its policy terms to cover the Matlocks for damages for bodily injury caused by an uninsured motorist.
In State Farms' appeal and motion for rehearing, urged that the Matlocks failed to obtain a judgment against the uninsured motorist. State Farm claimed that a judgment against the uninsured motorist is a condition precedent to the Matlocks' action against State Farm. In the original opinion issued by the Texas Supreme Court, the court held that neither the Texas Insurance Code nor the policy provisions of the insurance between State Farm and the Matlocks required the Matlocks to obtain a judgment against an uninsured motorist prior to seeking a judgment against the insurer. State Farm had a point, which it consistently urged in its motion for rehearing, that the Matlocks failed to prove that the driver of the other vehicle was an uninsured motorist.
In its discussion, this court said, "Texas has not had an occasion to allocate the burden of proving the uninsured status of an operator in direct actions by an insured against his insurer, but most courts outside of Texas have placed the burden upon the claimant." This court then cited cases from, Arkansas, California, Wisconsin, Illinois, North Carolina, and New York. The difficulty in proving a negative is recognized and the court approved a cite from one of the cases which said:
"Since the absence of insurance upon the offending vehicle and its driver is a condition precedent to the applicability of the uninsured driver endorsement, we hold that the burden of proving such absence is upon the claimant. However, we must keep in mind that proving a negative is always difficult and frequently impossible and that, consequently, the quantum of proof must merely be such as will convince the trier of facts that all reasonable efforts have been made to ascertain the existence of an applicable policy and that such efforts have proven fruitless. In such an event, and absent any affirmative proof by petitioner (the insurance company), the inference may be drawn that there is in fact no insurance policy in force which is applicable."
In this case, Mr. Matlock was the only person who testified about the uninsured status of the other vehicle. He testified that he bought his own policy from Earl Oxford who was the recording agent for State Farm. He said he knew the other driver, but he identified him in the record only as a man with one leg. Matlock did not prove the make, model, or license number of the other vehicle, and this information was easily available. Below is the only evidence which Matlock presented to prove the one-legged operator was an uninsured motorist:
Q. Go ahead. Did Mr. Oxford ever tell you anything about whether or not this man that you had the accident with had liability insurance?
A. He said that he checked with him, and he didn't have any type of insurance.
State Farm had objected to this answer as hearsay and because there was no proof that Oxford had authority to make statements and admissions that were binding upon State Farm. In agreeing with this objection, this court said that in their opinion, Oxford did not have the authority to bind State Farm by his statement. Oxford, as State Farm's recording agent, sold the policy to the Matlocks, and Matlock testified that Oxford was still with State Farm, "so far as I know." There was no proof of Oxford's agency powers.
In conclusion the court stated that the Matlocks failed to prove that the operator was an uninsured motorist and thus the uninsured motorist protection did not apply.
NOW FOR THE CURRENT LAW
The above case was essentially overruled by the Texas Legislature when it passed a law in 2007. The new law is found in the Texas Insurance Code, Section 1952.109. It says, "The insurer has the burden of proof in a dispute as to whether a motor vehicle is uninsured."
Uninsured motorist cases have pitfalls that are important to know. An experienced Insurance Law Attorney is necessary to assist in getting through these pitfalls.

Most people in Grand Prairie, Arlington, Irving, Fort Worth, Colleyville, Dallas, Mesquite, Garland, and other places in the Dallas/Fort Worth metroplex do not really understand what a "loss of consortium" claim is.
A 1981, Texas Supreme Court case described a loss of consortium claim as "companionship, emotional support, love, felicity, and sexual relations," and recognized that loss of consortium involves harm to "the intangible and sentimental elements" of a marriage.
How a loss of consortium claim works as it relates to an insurance policy claim was discussed in a 1987, Texas Supreme Court case styled, Ella Jo McGovern v. Linda Kay Williams et al. This case concerned the liability of an insurance company under an auto liability policy. Here is some background.
Robert McGovern and wife, Ella Jo, sued Linda Williams for damages arising out of an auto accident. State Farm, the insurer for Ms. Williams, intervened and tendered $10,000 as full payment of its policy limits. The trial court determined that $10,000 was the applicable policy limit and discharged State Farm from any further liability. This court upheld the trial court ruling.
Robert McGovern, a City of Dallas employee, sustained personal injuries in an auto accident. The City, as subrogee, initiated suit against Linda Williams for Mr. McGovern's personal injuries. Mr. and Mrs. McGovern later brought a separate suit against Ms. Williams and others for Mr. McGovern's personal injuries and for Mrs. McGovern's loss of consortium. Ms. Williams' policy with State Farm insured Williams to the extent of $10,000 per person and $20,000 per occurrence for bodily injury claims. State Farm tendered the $10,000 pursuant to the "per person" policy limit. Mrs. McGovern disputed the amount of the tender, contending that she and Mr. McGovern were each entitled to $10,000 in insurance proceeds and that State Farm's obligation was $20,000.
At issue in this case was whether loss of consortium is a separate "bodily injury" to a spouse for purposes of applying the minimum insurance policy limits contained in Williams' policy and required by the Texas Safety Responsibility Law (TSRL). Mrs. McGovern contends that her claim for loss of consortium constitutes a "bodily injury" as that term is used in the TSRL and that she is entitled to independently recover from State Farm under the $10,000 "per person" liability limit.
Mrs. McGovern argued the TSRL was intended to encompass loss of consortium as a separate "bodily injury" because the legislature's general intent in enacting the statute was to protect persons from loss caused by negligent motorists. She contended that bodily injury is not limited to actual physical contact but is to be construed liberally to include mental anguish and emotional trauma. For support, she relied on the 1981 case mentioned above.
In discussing this case, the court said the TSRL refers to liability limits due to bodily injury or death to any one or more persons in any one accident. It is undisputed that only Mr. McGovern was involved in the accident giving rise to his personal injuries. Thus, because only one person was involved in that accident, the limit of State Farm's liability is $10,000.
In further discussion, the court stated that the term "bodily injury" cannot be reasonably construed to incorporate loss of consortium. While it is true that loss of consortium is a separate and independent cause of action, that action is a derivative claim that arises only as a consequence of injuries to one's spouse. The fact that Mrs. McGovern has a separate cause of action for loss of consortium does not mean, as Mrs. McGovern asserts, that loss of consortium constitutes a "bodily injury."

If someone in Grand Prairie, Fort Worth, Saginaw, Roanoke, North Richland Hills, Lake Worth, Colleyville, or anywhere else in Tarrant County uses someone else's car when their own car is unavailable, does the insurance on that other car protect them?
This issue was discussed in a 2003, Texas Supreme Court case styled, Progressive County Mutual Insurance Company v. Paul Sink. The case concerned coverage for a "temporary substitute" vehicle under the standard Texas Personal Auto Policy.
The issue was whether the policy provided liability coverage when the insured, whose own vehicle was disabled, takes and drives an automobile owned by someone who is not a family member without permission or the reasonable belief that he has permission and is involved in an auto accident with a third party. The trial court ruled as a matter of law that there was no coverage. The appeals court reversed the trial court. This Supreme Court reversed the appeals courts. Here is some background.
Joshua McCauley's pickup truck became disabled. He was at that time employed by Alamo Rent-A-Car, and while on the job, he took one of its rental cars to drive to a location that was not disclosed in the court's record to get his tools so that he could attempt to repair his truck. It was uncontested that McCauley did not obtain permission from Alamo to use any of its vehicles and did not believe that he had permission to use the car in question. While returning to work in Alamo's car, McCauley was involved in an accident with Paul Sink.
Sink sued McCauley and obtained a favorable judgment that was subsequently discharged in bankruptcy. Sink then commenced this action against McCauley's auto insurance carrier, Progressive County Mutual Insurance Company, under its policy insuring McCauley's truck. Sink claimed that he was a third-party beneficiary of McCauley's policy and sought benefits under that policy's liability coverage.
When the trial began, the Judge determined that the vehicle owned by McCauley's employer was not covered by the insurance policy issued for McCauley's truck. That is when this appeal began.
The only issue for the Supreme Court was the proper interpretation of the policy.
The liability coverage section of the policy provided that Progressive "will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident." The policy contained a broad exclusion that precluded coverage for any person who uses a vehicle without a reasonable belief that he or she is entitled to do so, but the policy also stated that the exclusion does not apply to an insured or an insured's family member who uses "your covered auto":
EXCLUSIONS
A. We do not provide Liability Coverage for any person:
8. Using a vehicle without a reasonable belief that that person is entitled to do so. This exclusion (8) does not apply to you or any family member while using your covered auto.
The policy's definition of "your covered auto" contains, among other things, the reference to a "temporary substitute" vehicle:
G. "Your covered auto" means:
4. Any auto or trailer you do not own while used as a temporary substitute for any other vehicle described in this definition [e.g., a vehicle identified in the policy Declarations or a vehicle acquired by the insured during the policy period] which is out of normal use because of its:
a. breakdown;
b. repair;
c. servicing;
d. loss; or
e. destruction.
Progressive argued in the court of appeals and maintained before the Supreme Court that although there is no definition of its policy of what constitutes a "temporary substitute" vehicle, courts should look to the definition of "temporary substitute automobile" used in the Texas standard policy form that preceded the current one. Alternatively, Progressive contended that the term "temporary substitute" should be given its commonly understood meaning, which, it argued, is that a substitute vehicle must be used with the permission of its owner or at least a reasonable belief that the owner consented.
In justifying its ruling the court said that because the term "temporary substitute" is not defined in the policy, they considered the ordinary, everyday meaning of the words used. It is common to rent a car, use a loaner car, or borrow a car from a friend or family member while one's primary vehicle is undergoing service or repair. The generally accepted meaning of "temporary substitute" vehicle does not, include taking a vehicle without at least a reasonable belief of entitlement to its use.
Paragraph 8 says that a person using a vehicle without a reasonable belief that he or she is entitled to do so is not covered. "The general public understands that if a vehicle driven by a teenager and expressly covered by the policy breaks down and the teenager steals a neighbors car, the stolen vehicle would not be regarded as a 'temporary substitute' vehicle. Nothing in the use of the term 'temporary substitute' vehicle suggests otherwise. The analysis would not change if the teenager 'borrowed' the neighbor's car without the neighbor's knowledge or permission. The same can be said of an adult insured who 'borrows' his or her employer's car without permission. The ordinary connotation of a 'temporary substitute' vehicle is that it is a vehicle used with the owner's permission, or at least a reasonable belief that the owner consented."