Dallas Fort Worth Insurance Lawyer Blog

When does someone in Grand Prairie, Fort Worth, Burleson, Crowley, Lake Worth, Benbrook, Alvarado, Keene, Joshua, or anywhere else in Texas, know that the insurance company is taking too long to pay the claim?
There is no easy answer to the question. The laws related to the time frame for payment of claims are found in the Texas Prompt Payment of Claims Act. A reading of these laws is confusing. Even an experienced Insurance Law Attorney will have to read the law, look at the facts in the case then reread the law and see how it applies to the facts of the case. A big part of this law is the penalty the insurance company is subject to having to pay for violations of the law. So how is this penalty calculated?
The Fort Worth Court of Appeals decided a case in 2008, that provides some guidance. The case is styled, GuideOne Lloyd's Insurance Company v. First Baptist Church of Bedford. Here are some relevant background facts:
First Baptist Church brought suit against GuideOne for hail damage to the roof of its church building. GuideOne's engineer concluded the roof had to be replaced and could not be repaired. GuideOne solicited an estimate to repair the roof anyway, and the church obtained an estimate for the replacement cost, including a statutorily required insulation upgrade. The jury awarded the church approximately $286,000 for the covered losses, $60,000 in damages on the church's Insurance Code violations, and $30,000 in compensatory and $55,000 in exemplary damages for a knowing violation, along with $100,000 in attorneys' fees, and $188,000 based on the 18% interest penalty under the Prompt Payment of Claims Act for untimely payment of claims. The jury found that GuideOne had made an unconditional tender of $155,000 to the church after the church filed suit. GuideOne argued that the trial court erred in disregarding the jury's finding regarding its unconditional offer and that the interest penalty should have been calculated without subtracting the $155,000 that the jury found it had unconditionally offered after the suit was filed. GuideOne also challenged certain questions on the jury charge as erroneous.
In making its ruling, this court said the trial court erred in disregarding the jury's finding that GuideOne had unconditionally offered $155,000 to settle the claim because there was some evidence to support the jury's finding. In applying the offer to arrive at a new interest calculation, the court applied the $155,000 tender first to the accrued prejudgment interest on the amount of the coverage with the balance applied the principle coverage amount owed, and then use the adjusted principle to calculate the 18% interest penalty for untimely payment. The court rejected GuideOne's argument that the plaintiff had not received a finding on the accrual date for its Prompt Payment claim because the accrual date was undisputed and need not be submitted to the jury.
With regard to the jury charge issues, the court found that submission of multiple alternative definitions of an "unfair or deceptive act or practice" was harmless even if erroneous, and that a question on "false, misleading or deceptive" acts was not duplicative of the question about "unfair or deceptive acts or practices." Other challenges to the jury's finding were not erroneous because the judgment was not based on the challenged findings and otherwise, GuideOne waived its challenges to the jury charges.

Insureds in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, Springtown, Millsap, Brock, and all other places in Parker County have to protect themselves immediately by seeing an Insurance Law Attorney when their insurance company refuses to defend them in a lawsuit.
A 1998, Dallas Court of Appeals case serves as an example of what happens when someone delays in hiring an attorney. The style of the case is, Greenberg, et al v. Cigna Lloyds Insurance Company. Here are some facts:
Greenburg was the independent executor as well as the trustee for his brother's children. The children eventually brought suit against Greenberg in Probate Court alleging among other things that Greenberg was liable for improper self dealing and breach of fiduciary duty. After receiving notice of the suit, Greenberg contacted two insurance companies that had secured insurance policies, including commercial general liability policies. Greenberg and his sons were told that there was no coverage under the policies. Greenberg hired an attorney to represent him in the probate suit. Judgment was rendered against him. Later, he entered into a compromise settlement agreement under which Greenberg agreed to pay $1.1 million. The trial in the underlying probate case began on September 25, 1989. In September 1994, Greenberg filed suit against Cigna as well as other insurance companies alleging breach of contract, breach of fiduciary duty, breach of duty of good faith and fair dealing, negligence, gross negligence, breach of express and implied warranties, violations of Texas Insurance Code, Section 541.060, and the DTPA, and intentional misrepresentation. Cigna filed a motion for summary judgment which was granted on the basis of a limitations defense. Greenberg then filed this appeal.
In reviewing this case, the Dallas Court of Appeals held that the summary judgment in favor of Cigna was affirmed. The court said that a cause of action for wrongful refusal to defend ordinarily accrues when the refusal to defend occurs. In this case, the underlying trial commenced on September 25, 1989. It is undisputed that the trial preceded in the probate suit without defense being provided by Cigna. Therefore, the refusal to defend occurred at the very latest on the day the trial commenced in September 1989. Greenberg did not file the breach of contract claim until September 1994. Therefore, the breach of contract claim is barred by the four year statute of limitations. All of the extra contractual claims are based on Cigna's failure to provide a defense. Those claims also began to run when Cigna failed to provide the defense in the underlying suit. The claims are subject to two or four year statutes of limitations. Therefore, the extra contractual claims are also barred by limitations.
Without talking to the parties involved there is no sure way of knowing why there was a delay. There are ways to excuse a delay and to get around the statute of limitations defense, but the facts have to be just right to be successful in this effort.
Bottom line - don't delay getting an insurance law attorney involved.

Residents of Grand Prairie, Arlington, Fort Worth, Dallas, and other areas in the State of Texas would want to understand what happens when a policy payment is missed. The following case is one where the policy ended up lapsing. An experienced Insurance Law Attorney may have been able to get a different result.
The case is State Farm Life Insurance Company v. Beaston. The case decided in 1995, by the Texas Supreme Court. Here is some background.
Beaston purchased a graded premium whole life policy from State Farm. The premium on the policy was due on 12/28/93. The thirty-one day grace period expired on 1/28/94. Three days after the expiration of the grace period, Beaston died in an automobile accident. State Farm refused to pay benefits because coverage had expired. Beaston's wife, the beneficiary, brought suit alleging that the policy remained in force because of its dividend-at-death provision. The trial court found the policy ambiguous and instructed a verdict in favor of Beaston with respect to coverage.
The jury found: (1) the defendants had engaged in unfair or deceptive acts and that such conduct was a producing cause of damages to Beaston; and (2) defendants did not: (a) engage in any false, misleading or deceptive act or practice; (b) engage in any unconscionable action or course of action; (c) commit negligence; or (d) commit gross negligence. The jury awarded no policy benefits but awarded $200,000 for past mental anguish and attorney's fees in the amount of forty percent of her recovery. Based on the court's directed verdict and the jury's findings, the court entered judgment in favor of Beaston in the amount of $598,000. The court refused to award damages for mental anguish or to treble the award pursuant to Texas Insurance Code, Section 541.060, because there was no finding the defendants acted knowingly. The Court of Appeals held that mental anguish damages should have been awarded and actual damages should have been trebled. The Court of Appeals further held that Beaston's contingent attorney's fees should be calculated from the total recovery and not the total damages.
In it's analysis of this case, the court said that the interpretation of an insurance contract is governed by the same rules of construction applicable to other contracts. The policy, viewed in its entirety, unambiguously provides that State Farm would use "any available dividend accumulations" to pay all or part of the unpaid premium. Beaston's policy had not accumulated any dividends on its first anniversary and the policy lapsed before its second anniversary. Therefore, no dividend had accumulated. As a result, there were no dividend accumulations available to cure the lapse. Accordingly, Beaston had no coverage under the policy. On an issue of first impression, the Court held a "knowing" violation is required for an insured to recover mental anguish under Section 541.060. Thus, the judgment of the Court of Appeals was reversed and judgment rendered that Beaston take nothing.
This case has a harsh result.
Referring to the first paragraph above, this author is not saying that an experienced Insurance Law Attorney would have resulted in a favorable outcome. Rather, this author is saying that there are many ways to get around late payments and missed payments and that the odds of knowing about these ways are greatly increased with an attorney who has dealt with the situation in the past.

People in Grand Prairie, Fort Worth, Dallas, Arlington, Hurst, Euless, Bedford, Grapevine, and other places in the DFW metroplex would want to know why an insurance company refuses a claim and what the consequences are. The following case may give some insight.
This is a 1999, Fort Worth Court of Appeals case styled, "Mid-Century Insurance Company v. Foreman." Here are some facts:
Joyce Foreman was involved in a car accident with anther driver, Karl Buehner. Foreman's auto policy included $250,000 in underinsured motorist coverage. Foreman settled with Buehner's insurance carrier for approximately $20,000. It is disputed whether or not Mr. Foreman spoke with the Mid-Century agent before the settlement. Because of extensive medical bills, the Foreman's filed an uninsured motorist claim with Mid-Century. Fisher, a Mid-Century adjuster, mailed an acknowledgement and request for information. Fisher spoke with Mr. Foreman who told her that they had hired a lawyer. Fisher stopped all contact with the Foremans.
The Foremans sued Mid-Century to recover extra-contractual and contractual UIM damages. Based on a review of the Foreman's medical records, Mid-Century denied the Foremans' claim for failing to obtain consent before settling with State Farm and Buehner under the policy terms. Later, Mid-Century withdrew its denial based on the Texas Supreme Court opinion in Hernandez v. Gulf Group Lloyds, which held that a settlement without consent exclusion is unenforceable absent a showing that the insurer had been prejudiced by the insured's failure to obtain consent.
The Foremans' claim for UIM benefits was severed and tried separately from all extra-contractual causes of action. In the trial for UM benefits, the jury awarded $112,287.00 to Joyce and $12,500.00 to her husband. That judgment was not appealed.
The Foremans' extra-contractual claims were then tried. The Foremans focused on Mid-Century's denial of the claim. The jury found that Mid-Century caused the Foremans damages by committing deceptive acts, breached its duty of good faith and fair dealing, and knowingly failed to promptly pay the claim. The jury also found that Mid-Century's conduct was knowing and intentional but was not grossly negligent. The jury awarded $150,000 to Foreman and $175,000 to her husband for mental anguish damages. A bifurcated proceeding was then held in which the jury awarded the Foremans an additional $125,000 each because Mid-Century "knowingly violated the DTPA." These additional damages were not awarded to the Foremans because the Insurance Code provided a greater recovery. Mid-Century appealed.
The appeals court held that because there was no evidence that the insurance company acted "knowingly," the judgment is reversed and a take nothing judgment in favor of the insurance company is rendered.
In its holding, the court said a culpable mental state is required to recover mental anguish damages under Section 541.060. "Knowingly" means actual awareness of the falsity, unfairness or deception of the act or practice made the basis for a claim for damages under Section 541.060. "Actual awareness" may be inferred where objective manifestations indicate that a person acted with actual awareness.
The Court stated that "actual awareness" does not mean merely that a person knows what he is doing, but it does mean that a person knows that what he is doing is false, deceptive or unfair. This is a more culpable mental state than gross negligence.
The court then said, in this case, there is no evidence that Mid-Century knew it was acting falsely, deceptively or unfairly towards the Foremans. Therefore, their mental anguish award cannot stand. The Foremans' assertions based on unsupported inferences are no more than a mere scintilla of evidence and cannot support a jury's finding.

Few people in Weatherford, Mineral Wells, Aledo, Willow Park, Hudson Oaks, Azle, Springtown, Millsap, Cool, Brock, or anywhere else in Parker County wants to be forced to hire an attorney to submit an insurance claim. But, like it or not, that is what most people have to do to get fair treatment.
A recent article on insurance singles out Allstate Insurance Company, but this same story could be told about many of the insurance companies. Here is what some of the article said:
Unlike may other businesses, the insurance industry is bound by law to act in good faith with its customers. Because of their protective role in the lives of ordinary citizens, insurance companies have long operated as semi-public trusts. But since the mid 1990's, a new profit hungry model, combined with weak regulation, has upended that ancient contract. In Texas, the Texas Department of Insurance is the agency that is suppose to be providing oversight on the insurance industry.
Claims has been converted into a money making process, is the report from consultants and people who study the industry.
The change started when consulting giant McKinsey & Company sold Allstate and other leading insurance companies on a new system to boost the bottom line. Rather than adjusting claims the traditional way, which gave claims managers wide latitude to serve customers, insurance companies embraced a computer driven method that produced purposefully low offers to claimants.
Those who took the low ball offers received prompt service, while those who did not had their claims delayed and potentially were reduced to bringing expensive lawsuits to fight for their benefits. An ex Allstate agent told the American Association for Justice, a trial lawyers lobby, the strategy was to make claims "so expensive and so time consuming that lawyers would start refusing to help clients." The strategy was dubbed "Good Hands or Boxing Gloves" by consultants.
McKinsey, which was reportedly hired by Allstate in 1992, prepared about 12,500 PowerPoint slides to present its plan. The slides were introduced in litigation in 2005, when Allstate turned them over under a temporary protective order. This information was detained in a book titled, "From Good Hands to Boxing Gloves: The Dark Side of Insurance."
McKinsey's strategy put profits above all. One slide in the McKinsey presentation illustrated this philosophy by painting the insurance business as a zero sum game: "Improving Allstate's casualty economics will have a negative economic impact on some medical providers, plaintiff attorneys, and claimants. ... Allstate gains -- others must lose."
Allstate has certainly gained: It made $4.6 billion in profits in 2007, double its earnings in the 1990's. The stunning increase, came through "driving down loss values to an average of 30 percent below the actual marker cost" -- that is, paying dramatically less on claims.
An insurance company can make a lot of money on the small claims because if you save a few dollars on a huge number of claims, it's worth more than saving a lot of dollars on a very small number of claims.
Allstate is the best known user of the McKinsey model, topping the list of the "Ten Worst Insurance Companies in America" published by the American Association for Justice. But Allstate's rise in profits has led most of the industry to adopt the same approach. McKinsey has worked with State Farm and other companies in redesigning their claims systems. Another book written on the subject is "Delay, Deny, Defend."
Statistics show that the companies that take in 70 percent of total insurance profits in the United States now abuse their obligations to their policyholders. When Allstate CEO Tom Wilson earned $9.3 million last year, he was not even on the top 10 list of best paid insurance executives according to New York Law School's Center for Justice and Democracy.

When someone in Weatherford, Mineral Wells, Aledo, Willow Park, Hudson Oaks, Azle, Springtown, Millsap, Brock, or anywhere else in Texas really gets mistreated in an insurance case, that person will probably have a claim for mental anguish. So, how does that work?
A 2004, Corpus Christi Court of Appeals case gives some insight on the answer. The style of the case is, Minnesota Life Insurance Company v. Elia L. Vasquez. Here is some background.
Elia Vasquez alleged that Minnesota Life Insurance Company unreasonably delayed payment of the proceeds of an accidental death policy that insured the life of her deceased husband. As part of the lawsuit, Vasquez sued for mental anguish damages. The jury awarded her $60,000 in mental anguish damages. There were other issues in the case which are not discussed here.
In reviewing the mental anguish award, the court stated Texas law which says: To support an award of mental anguish, a party must present either direct evidence of the nature, duration, and severity of her mental anguish, thereby establishing a substantial interruption in her daily routine, or circumstantial evidence of a high degree of mental pain and distress that is greater in degree than mere worry, anxiety, vexation, embarrassment, or anger. If a party's pre-existing medical condition deteriorates or is compounded because of the torts of another party, the worry and pain associated with the aggravated condition can be considered mental anguish. Mental anguish can be established through testimony from the injured party explaining how she felt and how her life was disrupted. Other cases that had evidence to serve as examples included evidence of insomnia, humiliation, and an inability to function and maintain a normal relationship with family, feelings of physical pain, and an affect on work and family relationships.
In this case, Vasquez testified that during the time Minnesota Life was delaying the payment of the accidental death claim, she could not sleep due to the stress from the uncertainty of her financial situation. She was worried about the effect of the delayed payment on the mortgage on her home and felt that her "whole world" had caved in. Although her doctor had told her not to return to work for at least another year because of various health problems, she was so concerned about the loss of her home that she began looking for work. Vasquez was a diabetic, and she testified that during this waiting period, she experienced an increased blood-sugar level that her doctor attributed to her stress levels. Her blood-sugar levels were sufficiently altered to require a change in her medical regimen, from taking pills to having daily insulin shots. The court said that this evidence alone more than satisfies the requirements of legal sufficiency.
The relevance of this case to an Insurance Law Attorney, is that the case discusses the requirements of successfully obtaining a judgment on a mental anguish claim. Mental anguish is not that hard to prove in a case involving personal injury such as in a car wreck claim, but is much harder to prove in cases where an insurance company denies a claim or is slow in paying a claim.

Bad Faith attorneys in Grand Prairie, Grapevine, Colleyville, Keller, Saginaw, Newark, Southlake, Roanoke, and other places in the DFW metroplex might find this case worth knowing.
The United States District Court, Southern District of Texas, Houston Division, issued an opinion in November 2011, in the case styled "839 East 19th Street, LP v. Lexington Insurance Company, et al." This is a case wherein a motion for summary judgment filed by one of the defendants, Unified Building Sciences, Inc. (UBS), was granted.
Here is some background:
839 East 19th Street, LP (839) owned the Mesa Ridge Apartments which suffered damages in Hurricane Ike. 839 submitted a claim for damages to Lexington Insurance Company. Lexington hired the adjusting firm Cunningham Lindsey, which in turn hired UBS as an expert consultant. Also assisting in adjusting the claim were: a public adjustor, Gary Krone; an inspector hired by Krone to give a second opinion, Storm Management, Inc.; a roofing company hired by Needham Roofing; and an inspection company hired directly by Lexington, Grayco. Grayco opined that the Mesa Ridge roofs were in bad condition prior to Hurricane Ike and attributed only minor damage to the storm. Krone disagreed with the report. Ultimately, in its 15th report to Lexington, Cunningham Lindsey lowered the repair estimate from $1,016,016.43 to $422,559.61.
839 asserted multiple claims against multiple defendants in this lawsuit, but its only claim against UBS is under the theory of "participatory liability" for aiding and abetting Lexington's bad faith handling of the insurance claim.
In its analysis of this case, the court pointed out that the parties are disputing whether Texas law recognizes the theory of participatory liability as set forth in THE RESTATEMENT [SECOND] OF TORTS Section 876(b) (1977).
Section 876(b) provides:
For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he
***
(b)knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, ....
UBS said that its conduct in this matter was not the type of highly dangerous, deviant, or antisocial activity for which a Texas court would impose liability under 876(b), and that it did not provide substantial assistance or encouragement to Lexington, the primary alleged wrongdoer. The court agreed with the argument.
This court considered the following five factors listed in comment d of 876 in determining that the defendants did not provide substantial assistance necessary for liability:
(1) the nature of the wrongful act;
(2) the kind and amount of the assistance;
(3) the relation of the defendant and the actor;
(4) the presence or absence of the defendant at the occurrence of the wrongful act; and
(5) the defendant's state of mind.
Here, UBS merely provided an opinion on the cost of repairing or replacing the Mesa Ridge roofs. UBS was a consultant, it did not work as an adjustor on the claim. Lexington was not obligated to accept UBS's opinion. In fact, Lexington apparently did not accept UBS's initial estimate and sought a second opinion. There is no evidence that UBS encouraged Lexington to deny the claim of 839.
In it's "Conclusion and Recommendation" this court said:
"Because the record establishes as a matter of law that UBS did not provide substantial assistance to Lexington of a nature that would trigger imposition of participatory liability, assuming such a claim exists in Texas, the court recommends that UBS's motion for summary judgment be granted and plaintiff's claim against it be dismissed with prejudice."
One thing to be considered when filing a lawsuit is who are all the proper parties to sue and which of these parties do you want in the lawsuit. Here, 839 appears to be suing numerous parties. Attorneys for 839 may have good reason for doing this. However, other attorneys may take the position that suing just the insurance company is good enough. An experienced Insurance Law Attorney is able to discuss the options with their client. After a thorough discussion the attorney and client can then decide what is the best course of action.

Attorneys in Weatherford, Grand Prairie, Fort Worth, Mineral Wells, or anywhere else in Texas have to have an understanding of insurance law to handle insurance disputes effectively for clients.
There are different ways of recovering when insurance disputes arise. Many of these theories of recovery have common elements.
Insurance transactions tend to resemble one another, so disputes arising from them tend to resemble one another. There are only so many ways that an insurance company and their customer can get crossways. Most situations present recurring problems that can be grouped into categories. Insurance law is even more precedent-driven than other areas of law, as courts try to construe similar policy language consistently. It is not surprising that many cases start to look alike.
The key is to find good authorities that match your facts, or to emphasize the facts that match good authorities. These authorities are found in several places:
1. The Texas Department of Insurance;
2. The Texas Insurance Code;
3. The Texas Administrative Code;
4. Texas Courts such as the Texas Supreme Court, interpreting the laws.
The starting point though is the insurance contract itself. The initial inquiry almost always begins with the language of the contract to determine what is covered and what is not. Other tort and statutory theories may logically depend on the existence of coverage, or may exist independent of coverage. The interplay between recovery for breach of contract and recovery under theories is a broad discussion. Beyond a lawsuit for breach of contract, most insurance cases can be grouped into these categories:
(1) misrepresentations
(2) nondisclosures
(3) unfair settlement practices; and
(4) other misconduct
MISREPRESENTATIONS
One of the most common bases for an insurance dispute is the complaint that someone misrepresented something. After a claim arises, the customer may feel that the coverage accepted by the insurer is less than the coverage promised at the time of sale. Depending on the facts of the case, a representation by the insurance company or its agent may lead to liability for breach of contract, unfair insurance practices, deceptive trade practices, negligence, or fraud.
NONDISCLOSURES
Closely related to misrepresentation is the theory that the insurance company, agent, or insured failed to adequately disclose information. For example, if an exclusion is not adequately disclosed, the insurance company may be liable for breach of contract by relying on the exclusion to deny a claim. Failing to adequately disclose limitations or exceptions to coverage may also make the insurance company or agent liable for unfair insurance practices or deceptive trade practices.
UNFAIR SETTLEMENT PRACTICES
Several statutory prohibitions are specifically aimed at settlement practices. Liability may arise from failing to pay benefits that are owed under the policy, for failing to pay benefits that were promised by the agent, for failing to act promptly to settle once liability is reasonably clear, for paying too little, or for paying too slowly. Liability may also arise from the insurance company's failure to adequately investigate the claim.
OTHER MISCONDUCT
Other disputes may arise that do not fit neatly within the above categories, such as unreasonable cancellation of a policy, unconscionable conduct, or unfair discrimination.
Advice from an experienced Insurance Law Attorney is what is most important when confronted with a situation where an insurance company is not living up to its responsibilities to one of its customers.

No matter if you are in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, Brock, Millsap, Cool, Peaster, Springtown, or any other place in Parker County, at many points in your life there will be times when you buy insurance and as a result there will be many chances for the insurance company to make a mistake.
The insurance industry is regulated in Texas by the Texas Department of Insurance and complaints can be filed with that department. The courts in Texas handle disputes that become lawsuits and these disputes can wind up in the Texas Supreme Court. Guidelines and laws/statutes for insurance companies to follow are found in the Texas Insurance Code and the Texas Administrative Code.
There are many ways an insurance company can mess up.
1) The agent can make mistakes when he sells the policy.
2) The underwriting department can mess up in the way they evaluate coverages.
3) The administrators will make mistakes in the way they collect premiums and handle notices to their insureds.
4) Adjusters will not be professional in the way they handle claims.
Rarely are mistakes on purpose, otherwise it would not be a mistake, it would be an intentional act. The problem with mistakes is that they can often times be costly to the insured.
When an insurance company makes a mistake an experienced Insurance Law Attorney needs to be contacted as soon as possible. Don't start making statements and giving recorded interviews to the insurance company until you have consulted with an attorney.
Here are the different parts of the insurance transaction.
To understand the different ways disputes can arise, it is helpful to consider the sequence of events that is likely to occur. At its very simplest, the insurance transaction can be divided into the initial sale of the policy, and subsequent handling of claims. These can be broken down further to include:
(1) The sale of the policy: Initially, the consumer and insurance company or insurance company agent must communicate to establish a contractual relationship. Disputes may arise over what was asked for by the applicant, what was represented by the insurer or agent, or the timeliness of the insurer or agent in providing coverage. Issues may also arise about the truthfulness of the applicant or agent in disclosing information requested by the insurer;
(2) Underwriting: At this stage the insurance company considers the application and determines whether the applicant is an acceptable risk. Certain types of discrimination based on risk are legitimate and are inherent in the process of providing insurance. Other types of discrimination -- such as distinctions based on gender, ethnicity, or disability -- are unlawful;
(3) Policy administration: During the course of the insured/insurer relationship, disputes may arise even if there is no claim. For example, the insurance company may choose to cancel or not renew the policy. The insurer may demand a premium that is higher than the insured was lead to expect. Proper notices may not be sent or may be sent late; and
(4) Claims: If a claim arises under the policy, the parties may fall into disagreement over the scope of coverage, the amount of payment, the insurer's failure to pay, or the timeliness of any payment. An insurance claim may also give rise to disagreements based on the difference between the coverage promised by the insurance company or its agent at the time of sale contrasted with the coverage given at the time of the claim.
As stated earlier, when disputes or concerns arise, speak with an attorney.

People in Weatherford, Mineral Wells, Palo Pinto, Aledo, Azle, Hudson Oaks, Willow Park, Brock, Cool, Millsap, Peaster, and other places in Parker and Palo Pinto Counties may wonder how long an insurance company can take to pay a claim.
The answer is found in the Texas Insurance Code, Sections 542.051 thru 542.061. These sections are also known as the Prompt Payment of Claims law.
A careful reading of these sections will see that the time frame for paying an insurance claim depends on many factors. Some of those factors are (1) what type of insurance company is involved, (2) what type of claim is being made, (3) what is involved in the investigation, (4) how much has the claimant cooperated in the investigation of the claim, and variations of the preceding.
A short answer to the above question is found in Section 542.057. This section says that the claim should be paid "not later than the fifth business day after the date notice is made." (notice of the insurance companies decision to pay the claim). Regarding this, the Houston Court of Appeals, Fourteenth District, issued an opinion in 1998, that discusses this in an unusual context. The style of the case is, John A. Daugherty, Jr. v. American Motorists Insurance Company.
Here is some background.
Daugherty had his 1994 BMW stolen on February 25, 1994. He submitted a claim for $68,895.42. After adjusting the claim, an adjuster called Daugherty's bookkeeper on March 16, 1994, and made an offer of $62,431.14. The following day, police recovered the BMW. At about 2PM on March 17, 1994, the adjuster called the bookkeeper and rescinded the offer. Daugherty did not learn of the offer until after it had been withdrawn.
Based on the damages to the recovered BMW, American tendered a check to Daugherty for $1,901.50 on April 7, 1994.
Daugherty refused the payment and filed a lawsuit against American claiming that American violated the Prompt Payment of Claims Act by not paying the $62,431.14 within five business days after making the offer.Daugherty's contention at trial was that American effectively notified him it would pay his claim when, on March 16, 1994, it informed his bookkeeper it had determined the value of the stolen BMW. Daugherty argued that American was bound by the terms of the contract, which tracked the language of the statute, to pay him within five days after notification. American Motorists, on the other hand, contended that the communication of March 16 was merely an "offer" to pay $62,431.14. Because the offer was rescinded before it could be accepted, American Motorists claimed it was not obligated to pay.
In discussing this case the court noted there was a discrepancy of almost $6,000.00 between Daugherty's and American Motorists' estimation of the loss, the call of March 16, was an offer, not a notification that American Motorists was going to pay the claim. The court stated, "Were we to hold that an oral offer constitutes notice of payment, negotiations between an insurer and its insured would be severely hampered."
The final paragraph of the opinion says:
"Finally, even if we were to find that the communication of March 16, 1994, was a 'notice of payment of claim,' such notice was grounded upon the fact that Daugherty's car had not been recovered. We find nothing in the Insurance Code or the policy at issue which prevents the insurer from withdrawing its notice of payment if the facts and circumstances known to the insurer change significantly after the notice is given but before the claim is paid. Here, the change of circumstances, i.e., the recovery of Daugherty's automobile, favored the insurance company because the loss was not as great as had been previously calculated. However, it is just as conceivable that changing circumstances may favor the insured, i.e., the damage to the property is found to be more severe than previously believed. The purpose of the statutory deadline contained in ... is to guarantee the prompt payment of claims made pursuant to policies of insurance; not to create a statutory windfall for one party or the other. ... Here, there is no evidence that American Motorists unreasonably sought to delay or postpone its obligation to pay Daugherty's claim."

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 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."

An insured in Grand Prairie, Arlington, Fort Worth, Dallas, or anywhere else in North Texas might wonder how an under-insured motorist claim works. That is a long answer, but here is how some of it worked in this situation.
The Dallas Court of Appeals issued an opinion on August 12, 2011, in the case styled In Re State Auto Property & Casualty Insurance Company and Hotchkiss Family Holdings, Inc D/B/A Hotchkiss Insurance Agency. This is a mandamus proceeding complaining of two orders of the trial court. Here is some background information.
Graeber and Kori Anderson were involved in an auto accident in which liability was disputed. After Graeber settled his lawsuit against Kori Anderson within Anderson's policy limits, he sued State Auto, two of its adjusters, and his local insurance agent, Hotchkiss, seeking underinsured (UIM) benefits and extra-contractual damages for bad faith and other claims. State Auto asked the court to sever and abate the UIM claims from the extra-contractual claims. This was denied, but separate trials with separate juries was ordered, as well as a stay of discovery and proceedings on the extra-contractual claims until the disposition of the UIM claim.
Thereafter, Graeber was served with a notice of deposition. His attorneys attempted to stop this, claiming he had already been deposed in the underlying lawsuit and it was duplicative to take his deposition again. State Auto claimed this was wrong, stating that they had not participated in the previous deposition. The Judge allowed State Auto to proceed with the deposition but signed an order to depose Graeber only as to (1) any diagnosis or treatment he "has had since he gave his prior deposition" in the Anderson lawsuit, (2) "any additional damages he claims to have incurred since the prior deposition, and (3) anything that has happened since the date of the prior deposition." The trial court further ordered that State Auto "shall pay $100 for any questions asked of Graeber that were covered in his prior deposition.
State Auto's writ of mandamus complained of these two rulings.
In discussing this case, this appeals court pointed out that according to the Texas Supreme Court, Graeber was entitled to settle, rather than proceed to judgment against Anderson, but neither that settlement nor any admission of liability from Anderson established UIM coverage. A jury could find that Anderson was not at fault or award damages that do not exceed Anderson's liability insurance.
While State Auto consented to Graeber's settlement with Anderson, such consent did not constitute a judgment on the merits of that action. Further, Graeber had presented no evidence or case law to show State Auto was bound, or to what extent it may be bound, to what occurred in the prior lawsuit. The consent to settlement was to protect the insurer's subrogation rights against the uninsured motorist or any other person legally responsible for Graeber's injuries.
This court went on to say, it was a clear abuse of the trial court's discretion to order that Graeber could be questioned only about (1) any diagnosis or treatment he "has had since he gave his prior deposition" in the Anderson lawsuit, (2) "any additional damages he claims to have incurred since the prior deposition; and (3) anything that has happened since the date of the prior deposition." Additionally, Graeber offered no authority allowing the trial court to order an advance sanction of $100 against State Auto for any question asked in violation of the trial court's order. This court pointed out, "... sanctions are available for actual abuse of the discovery process after notice and a hearing. The award of preemptive sanctions here was an abuse of the trial court's discretion."
The trial court's order here not only prevents discovery that on its face goes to the heart of Graeber's UIM case, but awards sanctions for any attempt to develop a record supporting the need for such discovery. This appeals court ordered the trial court to vacate its order.