Dallas Fort Worth Insurance Lawyer Blog

A Dallas Appeals Court upheld a lower Court ruling in an interesting case. The ruling applies to the same facts anywhere in Texas, including, Fort Worth, Arlington, Grand Prairie, or Weatherford.
This case is valid law today but was decided in 1989. The fact pattern is unique. The style of the case is United States Fire Insurance Company v. United Service Automobile Association.
The underlying liability lawsuit arose out of an accident that occurred when an Anna Milliken was riding as a passenger, with a Douglas Martin, being the driver. The car Douglas was driving was owned by his father and was covered by the United States Fire Insurance Company (U.S. Fire) policy. Anna's insurance was United Service Automobile Association. Douglas testified about some swerving and horseplay prior to the accident. Anna testified that Douglas was zigzagging the wheel back and forth and that she grabbed the wheel on two occasions prior to the accident. She was doing this to play back with Douglas. The first time she did this, Douglas did not object, and the second time was when the accident occurred causing serious injury to Douglas. Douglas sued Anna for his injuries.
The issue in this case was between the insurance companies and which one should be defending and paying on behalf of Anna. U.S. Fire argued that Anna was not using the vehicle with a reasonable belief that she was entitled to use the vehicle.
The Court got into a lengthy discussion about what it means to "use" a vehicle. They cited many acts that constitute use of a vehicle. They ruled that the fact that she was a passenger in the Martin automobile was enough by itself to constitute "use" of the automobile. The Court cited many other interesting examples of "use."
"Use" was the first issue. The second issue was, whether or not Anna had a reasonable belief that she was entitled to be operating the vehicle. This discussion was also interesting in that U.S. Fire kept argueing from the standpoint of what Douglas may have thought about this belief. However, the Court focused on whether or not Anna believed she could be doing what she did. In other words, the inquery was whether Anna had a "reasonable belief" that she was entitled to operate the automobile at the time of the accident. Stated another way, did Anna have a "reasonable belief" that she was entitled to grab the steering wheel when she did. The Court ruled that she did.
In Texas, there are many different forms for the policy's issued. A close reading of these policy's is vital to determining the rights of people making claims against those policy's. One should not hesitate to speak with an experienced Insurance Law Attorney when making a claim against an insurance company. As can be seen in this case, two insurance companies were fighting between themselves over the meaning of the policy language to determine which of them should be responsible on the claim..

Punative damages and "exemplary" damages are essentially the same thing in Texas. The way exemplary damages works in Texas is the same regardless of whether you live in Arlington, Grand Prairie, Fort Worth, Dallas, or Weatherford.
The Texas Court of Appeals in Houston, Texas, recently dealt with the issue of how exemplary damages are handled when the claim made is a claim against a person's own insurance carrier for uninsured motorist benefits. This case was decided on February 4, 2010. The style of the case is, Sandra Gervais Laine, v. Farmers Insurance Exchange.
In this case Laine's mother was killed in an auto accident. The other driver was at fault and was intoxicated. Laine made a claim against Farmers Insurance Exchange for benefits under her uninsured motorist benefits portion of the auto policy. Farmers paid the uninsured benefits limit of $250,000. She then made a claim against her umbrella policy which provided the same benefits as the auto policy except for a higher amount. The limit under the umbrella policy was $1,000,000.
Farmers denied the claim under the umbrella policy and Laine sued Farmers. A jury found the uninsured driver at fault and assessed actual damages of $175,000. The jury then found exemplary damages in the amount of $1,500,000 as punishment against the intoxicated driver. The trial Judge overruled the jury's verdict against Farmers on the exemplary damages. The appeals court affirmed the Judge's ruling.
The Judge's looked at the policy language and public policy considerations in making their decision. The policy defined damages as "the total of damages that the insured must pay (legally or by agreement with our written consent) because of bodily injury, personal injury or property damage caused by an occurrence covered by this policy..." The policy goes on to talk about "bodily injury". The policy is silent on the issue of exemplary damages. The court held that exemplary damages are amounts in excess of actual damages. And it did not matter that the policy did not contain an exclusion for "damages which are punitive or exemplary."
As for public policy considerations, the Texas Supreme Court has rejected as against public policy, coverage under uninsured motorist policies, when the insured seeks to recover from his own insurer exemplary damages assessed against a responsible third party wrongdoer. Further, that both public policy and the language contained in the Insurance Code and the Motor Vehicle Safety Responsibility Act, limit recovery under an uninsured motorist policy to compensatory damages. Here, the court cited the Texas Insurance Code, Section 1952.001 and Texas Transportation Code, Sections 601.001 - 601.054, and stated that this policy does not support rendering damages against an insurance company since neither deterrence of wrongful conduct nor punishment ... of the wrongdoer is achieved by imposing exemplary damages upon the insurance company.
To further affirm their position, the court looked to Chapter 41 of the Civil Practice and Remedies Code as further indication that the punishment imposed through exemplary damages is to be directed at the wrongdoer. And, the Texas legislature ensured that persons injured by uninsured motorists be compensated for their actual injuries, when they enacted Section 1952.101, Texas Insurance Code.

Diminished value claims have to be looked at from two different standing points. In Texas, whether you are in Dallas, Fort Worth, Arlington, Grand Prairie, or out in Weatherford, the same rules to go by are going to apply.
Diminished value would be the difference in the value of your car after a wreck, even though it has been repaired, and the value your car would have had, if the wreck had not occurred. A good example of this is as follows: You bought a new car 3 months ago for $30,000. Let's say the car is now worth $28,000. Your have a wreck. The car is repaired. Now, because the car has been in a wreck, the car is only worth $23,500. The reason it is worth less is because anyone buying the car will not pay as much for it, knowing it has been wrecked, than they would pay if it had not been wrecked. In our example, the car should be worth $28,000. This $4,500 difference is the "diminished value".
The first standing point, when making a diminished value claim, is when you are going to make a claim against another driver / insurance company. In making the claim against someone else who caused the damage to your car, they are responsible for the diminished value of your vehicle that was harmed in an accident. There are companies whose business purpose is to help people with these claims.
The second standing point, is when making the claim against your own insurance company under your own insurance policy. Depending on the wording of the insurance policy, most of the time the insurance company is not going to have to pay diminished value.
The case that deals with this issue is, American Manufacturers Mutual Insurance Company v. Schaefer. This is a case decided in 2003 by the Texas Supreme Court.
In this case, the Court sided with American Manufacturers Mutual Insurance saying that the policy's plain and unambiguous language did not require payment for diminished market value when a vehicle had been fully and adequately repaired. The Court noted that a carrier's obligation to compensate its insured for a loss was circumscribed by the policy's "limits of liability" section, which stated in relevant part that the insurance company's liability was limited to the damaged vehicle's actual cash value or the amount needed to repair or replace the vehicle, whichever was less. The Court stated that the concept of "repair" described something tangible, like removing dents or fixing parts, this being the ordinary meaning of "repair", and did not encompass compensation for diminished market value. The Court went on to say that because the policy provided that the insured was entitled to the lesser of actual cash value or the amount necessary to repair or replace the vehicle, incorporation of diminished value into the "repair or replace" provision would render the "lesser of" wording a nullity.
Wording in an insurance policy is important. More important, is understanding the wording. An experienced Insurance Law Attorney should be consulted whenever issues arise about the meaning of the words in an insurance policy.

Anytime a person buys insurance coverage for their automobile in Texas, they are given many options. These options include choices related to collision coverage, coverage for towing, rental cars, and even life insurance, to mention a few. No matter where you buy automobile coverage in Texas, whether it is Dallas, Fort Worth, Arlington, Grand Prairie, or in Weatherford , you are also given the option to buy uninsured / underinsured beneits and personal injury protection benefits also known as PIP.
In discussing PIP coverage, one should know that this coverage is regulated in the Texas Insurance Code, Sections 1952.151 thru 1952.161.
Section 1952.151 says that PIP provides payment of all reasonable expenses that arise from an accident for: A) necessary medical care, B) lost income for a wage earner, and C) reinbursement for reasonable expenses for essential services ordinarily performed by the injured person. An example of this last one would be reinbursing an injured person for having to pay someone to mow his yard because his injuries prevented him from doing it himself.
Another important thing to realize about PIP coverage is found in Section 1952.152. This section says an insurance company must provide PIP coverage in any and all polices issued in the State of Texas. This coverage is automatic unless the named insured rejects the coverage in writing.
Section 1952.153 requires that the minimum for PIP coverage be $2500. There is not a maximum required by law. A maximum is left to the discretion of the insurance company.
Section 1952.155 is another important part of PIP law. This section says that PIP benefits are payable without regard to the fault of a person seeking coverage. Also, this section says PIP is payable without regards to whether or not there is other insurance to cover the loss. In other words, this section actually allows for a "double recovery".
Section 1952.156 deals with time limits for presenting the claim for PIP benefits and the time frame for the insurance company to pay these benefits.
Section 1952.157 provides for the penalties an insurance company faces for not promptly paying claims under PIP benefits.
Another relevant section is Section 1952.159. This section allows an offset against a liability claim. This normally applies to a situation where a passenger is injured due to an insured drivers' negligence. The passenger would normally receive PIP benefits soon after an accident, then later on settle the liability claim against the driver. When the claim against the driver is settled under the liability portion of the settlement, the insurance company can take a credit or offset against the monies paid under the PIP portion of the policy.
PIP is a valuable coverage to be able to make a recovery from. And it is important to know and understand the way PIP coverage works so as to insure an insurance company adjuster does not accidentally or deliberately handle the claim wrong. Seeking the advice of an experienced Insurance Law Attorney can insure that your claim for benefits is handled properly.

Here is a situaton where a Dallas resident had a wreck in Mesquite, but it could have been Fort Worth, Arlington, Grand Prairie, or out in Weatherford. The injured persons had two insurance policies with the same insurance company.
This happened in a 1984 case, The Travelers Indemnity Company of Rhode Island, v. Lenny and Terri Lucas. Mr. Lucas was accompanied by his wife, Ms. Lucas, in an ambulance. A drunk driver ran head-on into the ambulance causing injuries to the Lucas'. They had two separate insurance policies with Travelers Indemnity, for Personal Injury Protection benefits and underinsured motorists benefits. Travelers paid the full amount under one policy to each of the Lucas' but refused to pay under the second policy. The damages to the Lucas' exceeded the limit of both the policies combined.
The ambulance also had underinsured benefits with a policy through Aetna. Travelers tried to limit what it had to pay by citing an "Other Insurance" clause within the Travelers policy.
The court ruled that an insurance company may not reduce its underinsured liability to an amount less than the policy limit by crediting itself an amount paid under another policy. The same ruling was made regarding payments made for Personal Injury Protection benefits.
A case decided in 2007, was essentially the same. The 2007 case was Kelley v. Progressive County Mutual Insurance Company.
Here, Kelley was injured by a motorist while riding her horse and her claim exceeded $1,000,000. She received the policy limit of $100,000 from the at fault driver and then received the limit of $500,000 under a policy issued to her by Progressive. However, on a policy issued to her father by Progressive, which also named her, Progressive refused to pay. Progressive asserted a policy provision that prohibited "stacking" the policies and argued that her recovery was limited to just one of the polices.
The court noted that the policies were separate policies, with separate policy numbers and separate vehicles listed. Just because Progressive issued both policies to members of the same family did not allow Progressive to prevent a "stacking" of these policies.
There are situations where an insurance company may not have to pay where there is duplicate coverage. When there is more than one policy that may cover a claim it is important to seek the advice of an Experienced Insurance Law Attorney to insure your rights are properly protected.

Residents of Dallas, Fort Worth, Arlington, Grand Praire, Weatherford, or any other town in Texas should be interested in a question posed by an attorney the other day on a web-site, to other attorneys who sub-scribed to the site. It was a question dealing with uninsured and underinsured (UM) automobile coverage.
In the situation, a potential client had come into the attorneys office. The potential new client had been involved in an accident where the other person did not have enough insurance coverage to fully cover the damages this potential new client had suffered. Sounds simple so far. Here was the problem: More than two years had past since the accident had occurred. The question posed was: Can I recover more money from the UM coverage on the injured persons automobile policy.
This was the issue in the case Raul C. Franco et ux., v. Allstate Insurance Company. In the Franco case, Franco sought to recover damages due to the death of their daughter in an automobile accident. The lawsuit had been filed approximately three years after the date of the accident. The applicable statute of limitations for an injury claim was two years.
In the Franco case, the lawsuit had been filed against Allstate Insurance Company because of the accident but the basis for the claim against Allstate was the policy of insurance issued by Allstate. A policy of insurance is a contract between the insurance company and the insured. The statute of limitations on a contract claim is four years.
Allstate argued, among other things, that because the two year statute of limitations had expired on the accident, that the claim against Allstate that originated out of that wreck, was also barred by the two year statute of limitations. The Texas Supreme Court disagreed with Allstate and ruled in favor of the Franco family members stating that the claim against Allstate was a contract claim and thus the four year statute of limitations applied.
What is to be learned here is two-fold. First, a claim for UM benefits under an insureds' own insurance policy is four years, not two. Second, not discussed in the case but important is the extent of the recovery.
If the other driver had insurance, for instance a liability policy of $20,000, and the injured person had underinsured coverage of $20,000, and a claim whose value was estimated to be $30,000, what would have happened? The answer would be, that because the two year statute had expired for making a claim against the other guys policy and the claim was now only against the injured persons' underinsured policy, the total recovery would be limited to $10,000. Why? Because the underinsured policy would get a credit for the $20,000 that would have been recovered from the other drivers liability policy.
This can be confusing. It illustrates though, why it is important to get an Experienced Insurance Law Attorney involved early in a case in order to fully compensate a person who is trying to make claims against an insurance company.

Here is a case that was originally filed in a State District Court in Dallas, Texas. The case was removed to Federal Court and promptly dismissed.
The style of the case is "Kenneth McQuinne v. American Home Assurance Company". The only important issue in the case was whether or not a self insured vehicle was "uninsured" for purposes of the American Home Assurance Company policy argued about in this case.
The facts in this case are that McQuinne was involved in a wreck with a person named Sapkota. Sapkota was driving a vehicle owned by Enterprise Leasing. McQuinne reached a settlement with Sapkota's insurance company for the policy limit of $50,000. McQuinne alleged that his damages exceeded that amount and consequently filed a claim with American seeking additional benefits under the policy American had issued on his employer, Turfgrass.
The American policy excluded uninsured motorist coverage for vehicles that were self-insured. The Enterprise vehicle was self-insured. McQuinne argued that since the Enterprise was self-insured that it was uninsured and thus American should be made to pay benefits under the uninsured portion of the policy.
American argued that the Enterprise was a self-insurer under the Texas Motor Vehicle Safety Responsibility Act. As such the car is expressly excluded from coverage under the policy.
The court got into an analysis of contracts, insurance policies, and the words used in the context of both. They decided that as a matter of law that American won the case.
This case points out the creative efforts of the attorney for McQuinne to try and obtain relief for his client. It also restated contract and insurance policy language that the courts are not going to change.

Let's say you are a Grand Prairie or Arlington resident. You purchased an auto policy from an agent in Fort Worth. The price quoted seemed way too high and you asked the agent if there was anything that could be done to get the premium lower. The agent says, "Yes, we can take your teenage son off the policy." You say okay. The agent sells you a policy that excludes coverage if your teenage son is driving the car.

You can guess what happens next - the son drives the car and gets involved in a wreck. Now what? Numerous lawsuits have been filed in these situations and outcomes will sometimes be different depending on the facts of the accident and more importantly, the wording in the insurance policy that excludes the son.

Courts will look closely at the wording in the policy at issue but as a general rule, these exclusions are found by the Courts to be valid. It has been held that public policy dictates the allowance of such exclusions to enable insured motorists with children having bad driving records to secure insurance they can afford, rather than being relegated to securing coverage from an assigned risk pool at a much higher cost. This issue was discussed at length in the case, Wright v. Rodney D. Young Ins. Agcy. Wright was a 1995, Fort Worth Court of Appeals case.

Another case, Zamora v. Dairyland County Mut. Ins. Co., was decided in 1996 by the Corpus Christ Court of Appeals, and said essentially the same. The Court wrote that, the named driver exclusion furthers public policy by enabling drivers with family members having poor driving records to secure insurance they can afford. It also deters insured drivers from entrusting their automobiles to unsafe excluded drivers, thus, keeping those unfit drivers off the public roadways.

One thing to keep in mind here is that the general rule cited in the two cases above is subject to the facts of each situation and the wording of the policies involved. It is for that reason that consulting with an experienced Insurance Law Attorney should be a priority if you find yourself in a situation where coverage is being denied because the driver was an excluded driver.

Pretend for a minute that you are driving your car in the Dallas Fort Worth area going west. You drive through Grand Prairie and Arlington and are on your way to Weatherford to enjoy the "First Monday" market. All of a sudden a dog runs in front of you and you swerve to miss it and hit a telephone pole. You are lucky in that no one is injured, but your car has $3800 worth of property damage. You are lucky again because you have collision coverage on your automobile and they repair your car and you are only out a $500 deductible.

Sounds ok so far, right. Well think about it for a minute. Your car was only a year old because you sell your car every two to three years and buy a new one. When you sell this one you will either have to disclose to the buyer the wreck or they will easily find out. So what does that mean? It means this: Your car is worth less because of the wreck than it would have been had it not been involved in a wreck. This is called the "diminished value".

The nest question is: What can you do about it? This question was answered by the Texas Supreme Court in 2003. In 2003, the Court decided the case, American Manufacturers Mutual Insurance Company v. Schaefer. Maunufacturers was Schaefers insurance company. They fixed Schaefers car. Schaefer did not dispute the quality or adequacy of the repairs. But he did say that Manufacturers owed him an additional $2600 due to market perceptions that a damaged and subsequently repaired vehicle is worth less than one that has never been damaged. Again, this is called the diminished value and he expected Manufacturers to pay the extra money to compensate him for the lose.

In the Schaefer case, the Court got into a discussion about insurance polices and the ways to interpret them. This discussion dealt with the specific language in the policy talking about "repair or replace" and "value". They also looked at the part of the policy dealing with "exclusions" from coverage.

The Court spent a great deal of time discussing what other courts in other States have ruled and about rulings in other Texas courts in the past. They even looked up definitions in Blacks Law Dictionary.

Their final ruling was that the policy did not cover diminished value even though diminished value was an actual loss. You would have to read the case to fully understand this final ruling.

What is important to keep in mind is that this claim was a claim made by Schaefer against his own insurance company under the collision portion of his policy. If this claim were being made against someone else's insurance company, such as would be the case if another car had ran into him causing the damage, then the other person's insurance would have had to pay for the diminished value. This issue was ruled on by the Texas Department of Insurance in its Commisioner's Bulletin, No. B-0027-00 (April 6, 2002).

Diminished value claims are most applicable when you are talking about a newer model car. If you find yourself in a situation where you believe you are entitled to a claim for diminished value it would be prudent to seek the advise of an experienced Insurance Law Attorney to give you guidance. There are independent companies that exist which are able to establish the diminished value on an automobile.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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