Dallas Fort Worth Insurance Lawyer Blog

Most insureds in Grand Prairie, Arlington, Fort Worth, Dallas, and other places in the Dallas - Fort Worth metroplex do not have much understanding how Underinsured Motorist (UIM) protection works. Here is a case that helps to explain a little of it.
The case is styled, Salvador Olivas v. State Farm Mutual Automobile Insurance Company and Dan McDowell. The opinion was issued in 1993, by the El Paso Court of Appeals. Here is some background.
Salvador Olivas, while driving an automobile belonging to Dan McDowell, had an accident with a vehicle driven by Alex Harrison IV. Harrison's liability insurance policy had coverage limits of $25,000 for one person. Olivas settled his tort claim against Harrison for $15,000. This lawsuit was then filed in which it was alleged that Olivas's damages exceeded $25,000 and recovery was sought on McDowells' and Olivas's UIM policies, both of which were issued by State Farm.
Both State Farm and McDowell filed special exceptions which were sustained and when Olivas failed to amend, the case was dismissed with prejudice.
The issue here was: Does the settlement of a third-party tort claim for less than the full amount of the liability coverage carried by the tortfeasor bar a claim for UIM coverage for the injured party?
The conclusion by this court was, "An injured party may settle a third-party claim for less than the full amount of the tortfeasor's liability coverage and still claim underinsured motorist coverage, but recovery may be had only for damages sustained in an amount in excess of the total amount of the tortfeasor's liability coverage."
So, what does this mean?
In this case, Harrison had liability coverage for $25,000. Olivas settled his claim with Harrison for $15,000. Olivas may recover on any underinsured motorist coverage only to the extent that his damages exceed $25,000. This means that if Olivas obtains a judgment for $48,000 then State Farm would get a credit for the amount of the Harrison policy, which was $25,000. Which means Olivas would be able to collect only $23,000 from State Farm.
In the court's discussion of this case they pointed out Texas Insurance Code, Section 1952.103 which provides for UIM coverage, that says the term "underinsured motor vehicle" means an insured motor vehicle on which there is collectable liability insurance coverage with limits of liability for the owner or operator that were originally lower than, or have been reduced by payment of claims arising from the same accident to, an amount less than the limit of liability stated in the underinsured coverage of the insured's policy. Section 1952.106 says UIM shall apply to "... all sums which he is shall be legally entitled to recover as damages ... and reduced by the amount recovered or recoverable from the insurer of the underinsured motor vehicle."
This appeals court pointed out that the trial court having sustained special exceptions, the allegations of damages in excess of the amount of Harrison's coverage of $25,000, must be true. Thus, at the time of settlement, Harrison was an underinsured motorist. To hold as State Farm urged, that Olivas's settlement constitutes a judicial admission that Harrison's liability insurance was more than sufficient to compensate for all damages would discourage not encourage settlement of claims.
The court then said, "Where, as here, the claim greatly exceeds the available coverage, we find no reason to require that payment be delayed while awaiting payment by the liability carrier."
There are pitfalls to doing what was done in this case that did not exist at the time this case arose. Changes in the law regarding UIM coverage have to be taken into account. There are also other strategies for maximizing the chance for a favorable outcome. it is important to see an experienced Insurance Law Attorney in these types of claims.

Most insureds in Grand Prairie, Fort Worth, Dallas, Mansfield, Arlington, and other areas in the Dallas - Fort Worth metroplex have no idea how the uninsured motorist protection coverage on their automobile policies works. All they know is that their insurance agent told them that they should have it in case they have a wreck with someone who does not have insurance.
The Texas Insurance Code, Section 1952.101 requires that all automobile policies issued in the State of Texas contain uninsured motorist UM protection unless the UM protection is rejected in writing. Section 1952.108, allows for the insurance carrier to pursue the uninsured driver for any amounts paid out by the insurance company. As a result of Section 1952.108, allowing the insurance company to pursue the uninsured driver, almost all insurance policies require that their insured obtain written permission from their insurance company before reaching a settlement with the uninsured driver. Most people do not realize this. As a result, what happens if permission to settle is not obtained before settlement with the uninsured driver?
The answer to the above question is partially answered in the 1977, Texas Supreme Court case, Robert William Ford, Jr., et al. v State Farm Mutual Automobile Insurance Company. The principle question in this case was whether State Farm's unconditional denial of liability constituted a waiver of its right to consent before its insured subsequently settled with another insurance carrier.
Here are some of the facts.
On October 18, 1969, Mrs. Ford was a passenger in an automobile driven by Mrs. Harvey when the Harvey auto was in a collision with a vehicle driven by Jeffrey Whittten. The collision resulted in Ford's death and damages in excess of $20,000. Ford was survived by her husband and children. Whitten, whose negligence caused the collision, was an uninsured motorist.
On July 21, 1970, suit was filed by Mr. Ford, for recovery under the UM of a State Farm policy and a Gulf Insurance Company policy. On October 23, 1970, State Farm filed an answer denying any liability. On April 20, 1971, State Farm filed its first amended answer with pleas in bar "to Plaintiff's action in its entirety." Later, Ford settled with Gulf. One of these pleas by State Farm, alleged that plaintiff's action was barred and that State Farm was in no event liable to pay anything under its policy.
State Farm later filed a second amended answer in which it set up the defense that plaintiff's claim was barred because a settlement reached with another insurance carrier had not received the written consent of State Farm. This written consent was a requirement of the policy Ford had with State Farm.
In discussing this case, the court pointed out that this was a case of first impression for Texas courts.
In deciding for plaintiffs the court stated, "State Farm neither paid not pursued any of its affirmative steps for determination of what, if anything, it was due to pay plaintiff. Instead, it unconditionally denied all liability under the policy. This intentional conduct was inconsistent with claiming the right under the policy to consent before its insured settled with a third party. Such conduct constituted a waiver of that right. Waiver has been frequently defined as an intentional relinquishment of a known right or intentional conduct inconsistent with claiming it."
The court further said, "If State Farm had been correct in unconditionally denying coverage and liability, it would have lost nothing by plaintiff's settlement with Gulf. Since State Farm was incorrect it its denial, it has lost only the inconsistent right to assert the exclusionary clause as a grounds for forfeiture of plaintiff's entire coverage. It has not lost its right of subrogation. When it pays the amount adjudged to plaintiff by the trial court, State Farm will still have its right to institute proceedings in the name of plaintiff against the uninsured motorist or any other person responsible for the accident. It is true that State Farm will have to share subrogation rights with Gulf Insurance which may, by reason of earlier settlement, have a call on the first $10,000 recovered by plaintiff from any person responsible for the accident. The relative status of the subrogation rights of the two companies, as between themselves, is a question which is not before us, and we express no opinion thereon."
If you are not confused by the above, then you must be pretty experienced with these types of situations. But, it is still confusing and serves as an example why an experienced Insurance Law Attorney needs to be involved.

People in Grand Prairie, Fort Worth, Arlington, Irving, Dallas, and other places in Texas, who have underinsured motorist (UIM) coverage will hope they never have to use that coverage. But what if they do have to use it? What are the rules?
One rule focused on here, is that in order to make the UIM claim, the claimant must first get written permission from their UIM insurance carrier to settle the case with the underinsured driver who caused injuries. If there is a settlement with the underinsured driver without getting written permission from the UIM carrier, the UIM carrier can refuse benefits. Here is a case where this played out.
The case is a Texas Supreme Court case decided in 1994. The style of the case is Ruben and Anita Hernandez v. Gulf Group Lloyd's.
In this case, the court had to consider whether an insurer may deny a UIM claim on the basis of a "settlement without consent" exclusion clause absent any showing that the settlement prejudiced the insurer. The court held that an insurer may escape liability on the basis of a settlement-without-consent exclusion only when the insurer is actually prejudiced by the insured's settlement with the tortfeasor.
This case was tried on the following stipulated facts. On November 21, 1987, Elizabeth Hernandez was killed when the car in which she was a passenger flipped over. The driver of the car, Charles McCullough, Jr., was the sole cause of the accident. McCullough was nineteen years old and his only asset was a $25,000 liability policy with State Farm. Elizabeth was covered by her parents' insurance policy with Gulf Group and that policy provided UIM benefits of $100,000. The damages suffered by Elizabeth and her parents exceeded $125,000.
Six weeks after the accident, the Hernandezes, without the consent of Gulf, entered into a settlement with McCullough for the limits of the State Farm policy. The Hernandezes then sought UIM coverage from Gulf. Gulf denied the claim based on the Hernandezes' failure to obtain its consent in writing before settling with McCullough.
In its appeal of the Gulf decision, the Hernandezes did not dispute the validity of the settlement-without-consent exclusion in the Gulf policy. They argued, however, that such an exclusion is unenforceable absent a showing by Gulf that it has been prejudiced by Hernandezes' failure to obtain consent before settling with an underinsured motorist.
In discussing this case, the court said, "Insurance policies are contracts, and as such are subject to rules applicable to contracts generally." "A fundamental principle of contract law is that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from any obligation to perform." Citing from the RESTATEMENT (SECOND) OF CONTRACTS, Section 241(a), the court said, "In determining the materiality of a breach, courts will consider, among other things, the extent to which the nonbreaching party will be deprived of the benefit that it could have reasonably anticipated from full performance." The less the non-breaching party is deprived of the expected benefit, the less the material the breach.
In the context of an UIM claim, there may be instances when an insured's settlement without the insurer's consent prevents the insurer from receiving the anticipated benefit from the insurance contract; specifically, the settlement may extinguish a valuable subrogation right. In other instances, however, the insurer may not be deprived of the contract's expected benefit, because any extinguished subrogation right has no value. In the latter situation -- where the insurer is not prejudiced by the settlement -- the insured's breach is not material. The court concluded, therefore, "that an insurer who is not prejudiced by an insured's settlement may not deny coverage under an uninsured/underinsured motorist policy that contains a settlement-without-consent clause.
In the case, the parties stipulated that McCullough had no assets other than the $25,000 State Farm policy, and that he did not believe his financial situation would change in the foreseeable future; and Gulf further stipulated that it "has not incurred any financial losses ... with regard to its subrogation rights by the failure of the [Hernandezes] to obtain [its] consent before settling with McCullough and releasing him from all liability." Gulf, therefore, remained in the same position it would have occupied had the Hernandezes complied with the settlement-without-consent clause. Since Gulf had not been prejudiced by the Hernandezes' breach, the breach was not material, and Gulf therefore is not excused from its obligation to perform under the contract.

People in Grand Prairie, Arlington, Mansfield, Fort Worth, Dallas, or anywhere else in Texas will often times try to settle a claim they have without the assistance of an experienced Insurance Law Attorney. The problem with doing this is that there are multiple ways a person can be making a big mistake. Here is just one of them.
The Dallas Court of Appeals, decided a case in 1992, styled, "Rochelle Traylor v. Cascade Insurance Company, Formerly Known as Bonneville Texas Insurance Company, Successor in Interest to Victoria Lloyds Insurance Company."
Here is some factual background:
Traylor was riding in a car driven by Glynnis Penny when they were involved in an accident caused by Khoron Page. Traylor was seriously injured in the accident. Page's liability insurance was limited to $25,000 per person. Traylor settled with Page for the full policy amount of $25,000 and released Page from further liability without the consent of Cascade Insurance Company, Penny's insurer. Because Traylor's damages exceeded $25,000, she sued Cascade for its underinsured motorist (UM) protection of $20,000 per person. Cascade denied coverage and moved for summary judgment contending that coverage was excluded under Section A.2 of the policy's exclusions, which provides:
A. We do not provide Uninsured/Underinsured Motorists Coverage for any person:
***
2. If that person or the legal representative settles the claim without our consent.
Traylor argued in response that the exclusion violates Texas Insurance Code, Section 1952.108. The trial court disagreed and granted Cascade's motion.
Traylor argued that the consent-to-settlement clause in the insurance policy violated the statutory purposes of underinsured motorist coverage expressed in the Texas Insurance Code. Pointed out was that the Texas Supreme Court has stated that the purpose of underinsured motorist coverage is "the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles ...." Thus, the purpose of this court is to determine whether the consent-to-settlement clause is inconsistent with and fails to further the purpose of the Texas Insurance Code UM statutes.
This court then discussed the results of other cases dealing with this subject. After that discussion this court said that the consent-to-settlement clauses are a valid way for an insurance company to protect its right to subrogation against the UM motorist or any other person legally responsible for the insured's injuries. The court said that by permitting the insurance company to recover from the at-fault party some or all of the insurance proceeds paid to the insured, the right of subrogation defrays the cost and expands the availability of underinsured motorist coverage. When the insured settles with the at-fault party and releases that party from all future liability, even when the release is in exchange for the entire sum for which that party is insured, the insured cuts off the insurance company's right to recover its liability from the at-fault party. The consent-to-settlement clause preserves that right. Because the consent-to-settlement clause furthers the insurance company's right to subrogation under the Texas Insurance Code, the clause furthers the purpose of the Insurance Code. Accordingly, the exclusion under the policy for failure to obtain the insurer's consent to settlement is valid.
Traylor further argued that the enforcement of consent-to-settlement clause would encourage insurance companies to deny consent to an injured claimant to settle with a negligent motorist, thereby frustrating the attempts of the claimant to recover any insurance proceeds. In response, this court pointed out that the law provides heavy penalties against insurance companies that delay or refuse settlement of claims in bad faith.
There are exceptions to the law expressed in this opinion.

People with auto insurance policies in Grand Prairie, Arlington, Fort Worth, Dallas, Hurst, Euless, Bedford, and other places through out the DFW metroplex usually do not have a very good understanding of how their auto insurance policies work. All they know is that if they get into a wreck the insurance is suppose to help them.
There are many things an auto insurance policy can provide. The vast majority of people get the bare minimum that is required by state law. But there are many things that can be purchased. The minimum is liability coverage. Beyond liability coverage, a person can purchase coverage for damages to their vehicle, towing, auto rental, life insurance, medical payments, personal injury protection, uninsured and underinsured coverage, and a few other types of coverage.
All of these coverages work a little different from each other. Personal Injury Protection (PIP), and Uninsured / Underinsured (UM) coverage is required coverage on any auto policy sold in the State of Texas, unless these coverages are rejected in writing.
The requirement for PIP coverage is found in the Texas Insurance Code, Section 1952.152. The requirement for UM coverage is found in the Texas Insurance Code, Section 1952.101.
One aspect of these coverages was discussed in a 2004, Texas Supreme Court case styled, Old American County Mutual Fire Insurance Company v. Zeferino Sanchez. The question in this case was whether the insured spouse of the person listed as the "named insured" in the declarations page of a policy may reject those coverages. The case got to the Supreme Court as the result of a summary judgment ruling. This Supreme Court ruled that the spouse falls within the class of persons statutorily entitled to reject UM and PIP coverages under the policy.
Here is the factual background:
This case was presented on stipulated facts. On January 8, 1998, Margarita Sanchez, wife of Zeferino Sanchez, applied for and purchased an insurance policy from Old American for two of the couple's vehicles. Ms. Sanchez rejected UM and PIP coverages on the insurance application, and Old American never assessed premiums for the coverages. In applying for the policy, Ms. Sanchez affirmed that the rejections of UM and PIP coverages would apply to the 1998 policy and to all future renewals of that policy. The Sanchezes renewed their existing policy in 1999. Neither Mr. or Mrs. Sanchez requested PIP or UM coverages at that time.
Although Ms. Sanchez's name appeared on the 1998 policy application, she was not listed as a "named insured" on the declarations page. The policy, however, defined "you" and "your" to include the "named insured" as well as "the spouse if a resident of the same household." Mr. Sanchez fell within the policy definitions of "you" and "your" because she and Mr. Sanchez lived in the same house at all pertinent times. To that end, the parties stipulated that both Mr. and Mrs. Sanchez were insured under the policy. The parties disagreed, however, about the extent of the policy's coverage. Specifically, the parties disputed whether Mr. Sanchez was entitled to UM and PIP benefits to cover damages arising from a 1999 accident.
On April 11, 1999, Mr. Sanchez's pickup was parked on the shoulder of the road. A vehicle driven by an uninsured motorist struck Mr. Sanchez's truck as he was lying beneath it repairing a broken fuel hose. The impact caused the pickup to collapse on Mr. Sanchez and sever his spinal cord. The policy's UM and PIP provisions excluded coverage for injuries sustained while "occupying" or when "struck by" any vehicle owned by an insured that was not insured under the policy.
After the accident, Mr. Sanchez filed a claim with Old American for UM and PIP benefits under the policy. Old American filed suit seeking a declaratory judgment absolving it of any obligation to pay those benefits.
This court got into a multi page discussion about the purpose of the UM and PIP statutes and the wording of those statutes and then compared that discussion to the wording of the Old American policy.
The Texas Supreme Court ultimately held that the phrase "insured named in the policy" was synonymous with "named insured" in the UM and PIP statutes. In so holding it was ruled that Ms. Sanchez's signed reject of UM and PIP coverages, also excluded those coverages for Mr. Sanchez.

There are times for someone in Grand Prairie, Arlington, Fort Worth, Dallas, De Soto, Duncanville, Cedar Hill, Crowley, Mansfield, and other places in Texas to get with an Insurance Law Attorney to understand how certain aspects of insurance claims are to be handled.
In 1999, the Court of Appeals, Fourteenth District, Houston, had a case of "first impression," meaning they were presented with an argument for the first time. The case dealt with an argument for offset and settlement credit against uninsured motorist coverage by a negligent third party. The dispute arose out of a multi-car accident.
The style of the case is, "Ann M. Bartley a/k/a Anne Marie Tadlock v. Martell Rae Guillot." Here are some facts:
Guillot originally sued Ward, Bustos (uninsured), and Bartley (insured). Before trial, Guillot settled with Allstate, her uninsured motorist carrier, for $20,000 for the injuries she sustained in the accident caused by Bustos. The settlement agreement limited Allstate's subrogation rights to any damages recovered from Bustos or any other uninsured motorist. Bustos was dismissed and Ward was nonsuited. Thus, Guillot proceeded against Bartley only and recovered $30,000. Bartley moved the court for a set-off in the amount of $20,000, the amount Guillot received from Allstate. This request was made pursuant to Texas Civil Practices & Remedy Code, Section 33.012. The trial court refused, and Bartley perfected this appeal.
The issue before the court was whether a negligent driver is entitled to receive credit from an independent insurance policy procured by the injured party. This is what made this a case of "first impression" in Texas. An insurance company who pays under contract for a loss or injury for the wrong of another is subrogated to the rights of the creditor or injured person against the wrongdoer. The insurer's right to subrogation derives from the rights of the insured.
Here, Allstate paid Guillot, the insured, pursuant to Guillot's uninsured motorist policy for the multi-car collision. This entitled Allstate to stand in the shoes of Guillot and assert any claims that Guilot was entitled to assert. However, Allstate decided not to exercise its subrogation rights. Thus, Allstate allowed Guillot to receive more money than the damages awarded by the jury because it did not attempt to collect from Bustos. (A total of $50,000).
In discussing this case, the court pointed out that what Bartley really seeks is reimbursement or contribution from Bustos via Allstate's payment to Guillot under her uninsured motorist policy. However, Allstate stands in the shoes of Guillot not the shoe's of the joint tortfeasor. Bustos, the uninsured alleged joint tortfeasor, was not a party to the suit. To prevent what has occurred, Bartley could have joined Bustos in a cross action as a third party defendant creating an opportunity for the jury to adjudicate Bustos's liability, if any. This would have allowed Bartley to seek contribution or reimbursement from Bustos for any damages attributable to Bustos. To offset the $30,000 Bartley owed as damages by Allstate's $20,000 settlement, would allow Bartley to receive contribution from the plaintiff and not a codefendant. Allstate's liability arose from the fault, if any, of the uninsured motorist Bustos, not that of the insured driver, Bartley.
As stated, this was a case of first impression for the court and as such is not the type of situation that is going to happen very often.

A natural question for someone in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Willow Park, Millsap, Brock, or anywhere else in Parker County to ask is; What is the value of my claim?
When the claim is a personal injury claim, there is no easy answer. One general principle in this regard is that there are laws against making a "double recovery." A double recovery would be where you collect money from more than one source for an injury. The most likely place for this to be seen is where a person is injured in an auto accident caused by another. The injured person goes to the hospital and pays for the hospital bills with their personal health insurance. Then later on, the injured person makes a claim against the person who caused the accident and injuries and the insurance company for that person pays the injured person again, for the same hospital bills. Technically, this is illegal.
Another example is where the injured person makes a claim against two other people who may be responsible for the injuries and both pay all the bills.
In the second example above the Texas Civil Practices & Remedies Code, Section 33.012(b) says, "If the claimant has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by the sum of the dollar amounts of all settlements."
What Section 33.012(b) means is that if a person has a claim that is worth $1,000, then he cannot collect $1,000 from both people he is making the claim against. So, if one pays $100, then he still has a claim against the other for $900.
In the first example above, where the injured person has had the hospital bills paid by his insurance company, then the hospital has a subrogation interest in any amounts the injured person receives from the person who caused the injuries. The amount of the subrogation amount would be an amount up to what his health insurance has paid. So, if the injured person has a claim worth $1,000 but only $500 is paid by the health insurance company and if the injured person collects $1,000 from the person who caused the injury, then $500 has to be paid back to the health insurance company and the injured person can do as they wish with the other $500.
An experienced Insurance Law Attorney knows how to use other laws and legal principles to increase the total amount of the recovery and or lessen the amount of money that has to be paid back as a subrogation interest. - One thing to know, is it can be very confusing.
One place where a double recovery is allowed and fully legal is in auto injury claims where the injured person has Personal Injury Protection (PIP) benefits. The Texas Insurance Code, Section 1952.155(a) and (b).
Section 1952.155(a) says, "The benefits under coverage required by this subchapter are payable without regard to: (2) any collateral source of medical, hospital, or wage continuation benefits." This means that the injured person can collect his PIP benefits and then still make a claim against some other personal insurance he has for the same losses such as medical bills or lost wages. The caveat here is that there are exceptions to this and is again, a situation where an experienced Insurance Law Attorney needs to be involved to stay out of trouble.
Section 1952.155(b) says, "Except as provided by Subsection (c), an insurer paying benefits under coverage required by this subchapter does not have a right of subrogation or claim against any other person or insurer to recover any benefits by reason of the alleged fault of the other person in causing or contributing to the accident." This means that the PIP insurance company cannot subrogate against the insurance company of the person who caused the injuries. There is only one exception to this statute which is in Subsection (c), and this writer does not know where it has ever come into play.
The lesson to be taken from this posting is that the value of a claim has to take into account the rules discussed above.

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

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."

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

Someone in Grand Prairie, Weatherford, Arlington, Fort Worth, Dallas, Mineral Wells, Grapevine, Keller, Colleyville, or anywhere else in Texas should know that when it comes to suing an insurance company, there are things to know.
A 2007, San Antonio Court of Appeals case serves as a good example. The style of the case is, In re Terri Ann Garcia.
This is a writ of mandamus case. The person suing, Terri Ann Garcia, sought a writ of mandamus to vacate the trial court's order quashing the deposition of a State Farm Mutual Automobile Insurance Company representative. State Farm was trying to prevent the taking of the deposition of its representative.
Here is some background.
Garcia claimed injury when she was hit by another car. Garcia collected the full liability limits from the other car's insurance liability carrier. When she sought an under insured motorist claim against her own carrier, State Farm, they denied the claim and she filed a lawsuit. The claim was for her injuries and for bad faith and breach of contract. The trial court severed the injury claim from the bad faith claim and breach of contract claim.
Garcia subsequently informed State Farm of her intent to take the oral deposition of one or more of its representatives. State Farm moved to to quash the deposition and the trial judge granted State Farm's motion.
In the mandamus petition, Garcia asserted the trial court's order afforded State Farm "a special immunity from discovery not contemplated by the Texas Rules of Civil Procedure," emphasizing that State Farm "should not be permitted to conduct full and complete discovery of Garcia's case position on issues pertaining to the breach of contract allegations" while she is prevented from discovering similar information from State Farm.
In discussing this case the court pointed out that for Garcia to prevail in her breach of contract suit, she must prove both the liability of the third party and her actual damages. State Farm pled several defenses to Garcia's breach of contract claim, including disputing her actual damages. State Farm alleged Garcia failed to comply with all conditions precedent to recover under her insurance policy; Garcia suffered from pre-existing injuries and conditions; Garcia suffered from subsequent and intervening injuries and conditions not caused by the accident; and Garcia failed to mitigate her damages by ignoring her doctor's instructions and failing to seek appropriate treatment.
Garcia's deposition notice informed State Farm that the deposition would cover ten specific areas, including the occurrence or non-occurrence of all conditions precedent under the contract, any facts supporting State Farm's legal theories and defenses, and information regarding State Farm's experts. The court's review of the specific requests lead them to conclude that many of these matters correspond to the defenses and theories raised by State Farm or have a direct bearing on the damages in Garcia's breach of contract claim. Clearly, information about State Farm's defenses are relevant and properly discoverable, absent a showing of privilege or some other exemption authorized by the Texas Rules of Civil Procedure, Rule 192.3(a).
State Farm offered no evidence to substantiate their claim that the evidence could be obtained in other ways, nor did they produce any evidence showing a deposition of its representative constitutes harassment or is unduly burdensome or expensive as required by Rule 192.4(a). State Farm also contended it had stipulated to the insurance policy, the underlying liability policy limits, and the amount of any offsets or credits. At the hearing, State Farm's attorney represented to the trial court that in the future it would stipulate to the policy of insurance, the facts supporting its legal theories and defenses, its limitation of liability, and any offsets or credits to which it is entitled. However, nothing in the record showed State Farm stipulated to any of these matters. The court said, "We believe State Farm's assurances that it will stipulate to these matters in the future is not a proper substitute for discovery."
The court went on to say, "Without the opportunity to fully discover information about State Farm's multiple defenses, Garcia is effectively prevented from verifying and refuting those defenses. Moreover, as State Farm acknowledges in its brief, Garcia must establish at trial that 'her damages exceed the underlying liability insurance limits and any other offsets or credits State Farm may be entitled to.'"
Thus, this appeals court ordered the trial court to withdraw its order quashing the deposition of the State Farm representative.

Workers in Grand Prairie, Arlington, Irving, Fort Worth, Dallas, Mesquite, Garland, Richardson, Carrolton, Hurst, Euless, Bedford, or anywhere else in Texas may wonder about this situation. What if you are hurt at work while driving a company vehicle, your employer has workers compensation benefits you seek and obtain, and the vehicle has underinsured / uninsured (UM) benefits purchased by your employer? Can you obtain the UM benefits?
The Amarillo Court of Appeals had this issue come up in a case they issued an opinion in on September 26, 2011. The style of the case is, Robert Smith v. City of Lubbock and St. Paul Fire and Marine Insurance Company.
This case was an appeal from a summary judgment in favor of Lubbock and St. Paul. This court reversed as it relates to St. Paul but affirmed the decision as it relates to the employer, City of Lubbock.
The issue was whether or not the Texas workers compensation laws bar an employee from suing his employer upon an UM injury suffered by the employee while working. The damages at issue arose when Smith was struck by an intoxicated driver while Smith was working for Lubbock. The intoxicated driver was not an employee of Lubbock nor was he sufficiently insured. So, Smith made a claim for UM benefits under the policy purchased by Lubbock for its employees, even though he already received workers' compensation benefits. The claim was denied and this lawsuit resulted.
Lubbock argued that the state workers' compensation laws barred Smith from additional recovery. Smith claimed those statutes only precluded recovery for work-related injuries arising from common law torts as opposed to a contract and his claim arises from an insurance contract.
Here are some undisputed facts:
First, Lubbock acquired the policy from St. Paul on behalf of its employees.
Second, Smith was an employee of Lubbock at all times relevant.
Third, Smith suffered injuries at the hands of a drunk driver while Smith was within the course and scope of his employment.
Fourth, Lubbock paid for Smiths injuries through its workers compensation plan / insurance.
Pursuant to Texas Labor Code, Section 408.001(a), "Recovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee."
Smith is asking the court to interpret the statute as simply referring to tort claims, not those arising from contract.
In discussing this case the court pointed out that the statute does not contain the words "tort" or "negligence." It does not mention a particular chose-in-action. Given that the common law choses-in-action of tort and contract have existed for more than a century, it is safe to presume that the legislators knew of them when enacting Section 408.001(a). Yet, they opted not to express them in the statute. Instead, they incorporated terms focusing upon a remedy for particular injuries, not a cause of action through which remedies are generally sought. Those terms were "workers' compensation benefits" being the "exclusive remedy" for "work-related injuries" encountered by employees "covered by workers' compensation insurance."
It cannot be doubted that breach of contract is a common law claim. So, it would seem that Smith's effort to categorize his claim upon the policy as one for breached contract to trump the exclusivity provision is of little value to him.
Simply put, if an employee suffers work-related injuries and seeks their redress from an employer that subscribes to a workers' compensation program, there is only one way to obtain them. It is through that compensation program. It does not matter if the employer provides those benefits from its own pocket or via a contract with a third party insurer; once it provides them, statute bars the employee from forcing the employer to redress the injuries through other means. For the court to rule otherwise would provide the employee a backdoor way of recovering more from his employer than the exclusive workers' compensation remedy.
This case was an attempt by Smiths' attorney to maximize a recovery for Smith that did not work out.

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.

Insureds in Grand Prairie, Arlington, Grapevine, Keller, Flower Mound, Rhome, Ponder, Justin, Haslet, Saginaw, Farmers Branch, and other places in Texas might think they know the meaning of household resident. They would be surprised that often times an insurance company is going to fight over what it means when someone makes a claim. Here is an example.
The Texas Court of Appeals, Waco, determined a case in 1977, which is still good law. The case is styled, Southern Farm Bureau Casualty Insurance Company v. Kenneth C. Kimball et al. Here are some facts of the case.
Kenneth Kimball was the named insured in a family automobile policy issued by Southern Farm Bureau. Kenneth's wife, Connie, was killed in an automobile accident with an uninsured motorist when the policy was in force. At the time of her death, she and Kenneth were separated, living in separate residences, and a divorce action filed by her was pending. Farm Bureau filed a declaratory judgment asking the court to declare that they did not owe any benefits under the policy. The case was heard on stipulated facts. The only issue raised was whether Connie and Kenneth were "residents of the same household," as that term is used in the policy, at the time of Connie's death.
At trial, the jury found in favor of Kenneth and Farm Bureau appealed. This Waco appeals court confirmed the jury's verdict.
In discussing this case, the court stated, "The controlling test of whether persons are residents of the same household at a particular time, within the meaning of the policy in question, is not solely whether they are then residing together under one roof. The real test is whether the absence of the party of interest from the household of the alleged insured is intended to be permanent or only temporary i.e., whether there is physical absence coupled with an intent not to return." The court then pointed out that under proper facts, it has been held that separations from the common roof by college students, by members of the military services, and by spouses did not, per se, destroy their household membership with their families and spouses.
Cases cited by Farm Bureau in support of their contention that Connie was not a resident of the household at the time of her death, were cases that showed evidence to support that contention. In this opinion the court discussed in detail three of those cases in an effort to distinguish them from the present case.
As pointed out by the court, the facts and evidence in this case showed that Kenneth and Connie were a couple in their 20's who were married in May, 1972. Their only child, a daughter, was born in September, 1973. Connie was killed on December 21, 1975. Before their their separation, they resided in their mobile home in the City of Waco. Early after their marriage, they suffered substantial financial losses in the construction business. Thereafter, during the last two years of their marriage, Kenneth was a "long haul" truck driver, based in Waco. He would be on the road three and four weeks at a time, with no longer than three days at home between trips. Sometimes he would get in at night and leave the next morning. On the trips, he virtually lived in his truck. It was arranged with employer that Connie could draw on his earnings and pick up his paychecks. She cashed the checks, bought the family needs, and paid the bills, including payments on the mobile home and several department store accounts she maintained. Connie also held a job. During the day, she left their child with her mother who lives near Waco. After work when Kenneth was gone, Connie would go home, clean up, carry her work clothes for the next day to her mother's house, and she and the child would spend the night there. Connie filed suit for divorce on November 5, 1975. Later, she separated from Kenneth and moved into her mother's house, taking all of her work clothes. After the separation, Connie kept most of her things in the trailer home. One week before her death, Connie rented an apartment near Waco and moved all of her belongings into it. She left a set of dishes in the mobile home for Kenneth. The divorce suit and the separation were precipitated by emotional stress suffered by Connie which was caused by Kenneth's long absences from home and by the dunning of creditors of their defunct construction business. During the separation, Connie would either meet Kenneth at the truck depot in Waco when he returned from a trip, or she would have their car there for his use and he would go to her. They would go out together for supper when he was home, and would visit into the evening with each other and other trucker couples at local night spots. Neither were romantically interested in another person. They continued with the arrangement for Connie drawing on his pay, cashing his checks, using the money as she saw fit, including her needs and those of the child, and paying the bills. He talked with her several times about a reconciliation, but she had not agreed to it at the time of her death. On December 5, 1975, Kenneth returned home to attend his father's funeral. That night, he and Connie slept together in a room in his mother's house. Their child was with them. On December 20th, the night before Connie died, she fixed supper for Kenneth in her apartment. Their daughter was with them. They discussed plans for the child's Christmas. Kenneth had arranged his schedule to be home on Christmas.
These facts allowed the court to rule in Kenneth's favor. There are many cases where the question of whether or not someone is a resident of the household arises. It is vital that the advice of an experienced Insurance Law Attorney be sought when this happens.

Drivers in Grand Prairie, Arlington, Duncanville, De Soto, Cedar Hill, Mansfield, Irving, Dallas, and other places in Dallas and Tarrant County are required by law to be offered Uninsured Motorist protection when they purchase liability insurance on their vehicles. This is mandatory unless the coverage is rejected in writing.
A 1974, Beaumont Court of Appeals case deals with this issue in a fact pattern that has an unusual twist to it. The style of the case is, Oran Greene v.Great American Insurance Company. In this case the court ruled in favor of the insurance company.
Here is some background.
Oran Greene brought this suit for damages under the uninsured motorist (UM) provision of an auto policy issued to his mother, Letitia Greene. He was injured in a collision while driving his mother's automobile, when it was in a collision with another auto driven by an uninsured motorist. In the policy was a Form 119 which reads as follows:
"It is agreed that the insurance afforded by this policy shall not apply with respect to any claim arising from accidents which occur while any automobile is being operated by Oran Castine Greene." This was acknowledged by Letitia Smith Greene.
The complaint by Greene here is that an attempt to exclude him from UM coverage by the use of Form 119 is void as contrary to public policy. His arguement was that this form violated the Texas Motor Vehicle Safety Responsibility Act.
The laws regulating UM coverage are currently found in the Texas Insurance Code, Section 1952.101 thru 1952.110. This section currently and at the time of this case required that all policies of insurance provide UM coverage. A policy would have this coverage unless the coverage was rejected in writing.
Greene's argument was that a rejection of this coverage was against the above Act.
In response the court stated, "The plaintiff in this case was offered, and accepted, a contract furnishing her uninsured motorist coverage except when her son was driving the automobile. Why should that be contrary to public policy? If plaintiff's contention is allowed to become the law in Texas, insured motorists with sons and daughters with bad driving records will be unable to secure uninsured motorist coverage in any form except from the assigned pool at a much greater cost. Public policy dictates the allowance of partial rejection of such coverage in order to allow insureds in that situation to secure insurance they can afford, just as they presently can when liability coverage is in question.
Attorneys for Greene spent a great deal of time argueing that this violated the Act and they also spent a great deal of time talking about California law in this area of insurance regulation. This court in response, spent a great deal of time drawing distinctions between the Texas law and the California law. Here is some of this court's response:
"The 'whittling away of insurance coverage' which was repeatedly codemned in all of the above California cases has not met with the same reception in Texas. Form 119, which does allow particular policy exclusions, has been approved not only by the State Bar of Insurance (currently the Texas Department of Insurance) but also by the courts of this state (then cites the Texas cases). Although these cases do not involve the issue of uninsured motorists, it is nevertheless true that the terms of the Form were approved including the words 'any claim.' The affirmance of Form 119 indicates the Texas policy that some limitations may be applied to insurance coverage, and there has been no Texas case which stated that such limitation is to apply only to liability provisions of a policy. There appears to be no authority to negate the conclusion that Texas has followed the majority of jurisdictions in enacting uninsured motorists' coverage with the premise that such coverage is to put the motorists injured in a collision with an uninsured vehicle in the same position that they would have been in had the other motorists been properly insured."
In conclusion the court said that the evidence shows Letitia Greene wanted to secure insurance coverage for her automobile, but she had a son under twenty-five years of age with a bad driving record. She was informed by the agent that Great American would not write such insurance unless she signed a form excluding her son from coverage. She was also informed that the insurance could be secured with the son included through another company or through the assigned risk plan at a higher cost. Letitia Greene chose to take this policy excluding her son from coverage. Parties should be allowed to contract in this manner if they want to, and the contract entered into should not be found to be contrary to public policy.
As with the majority of situations involving insurance, it is important to consult with an experienced Insurance Law Attorney in order to have some assurance that the insurance company is not violating a person's rights in Texas.