Insurance attorneys are well aware of the changes in the Texas Insurance Code statutes that effect hail damage claims and other damages resulting from Mother-Nature.  What cannot not be overlooked is the responsibility to make clear what caused the claimed damages.  In other words are all the damages from a particular event or are some of the damages being claimed the result of another event or are simply wear and tear.

A 2021, opinion from the Northern District of Texas, Fort Worth Division, explains the necessity of segregating damages in a claim for insurance coverage.  The style of the opinion is, Harold Franklin Overstreet v. Allstate Vehicle and Property Insurance Company.

Pursuant to the 1999, San Antonio Court of Appeals opinion styled, Wallis v. United Servs.  Auto. Ass’n, an insured can only recover for covered events under his policy; therefore, he bears the burden of segregating the damage attributable solely to the covered event.

Often times when a claim for benefits is denied, the reason for the denial is that the policy has been cancelled.

“Cancellation” refers to the insurer’s termination of coverage before the end of the policy period.  A cancellation is in contrast to a non-renewal, which involves an insurer’s unwillingness to reissue the policy following the completion of the policy term of coverage.

Most insurance policies contain provisions regarding cancellation and the Courts honor this provisions as can be seen in the 1994, Waco Court of Appeals opinion styled, Truck Ins. Exch. v. E.H. Martin, Inc.  Specific provisions for cancellation of coverage must be precisely followed by the insurer and will be strictly construed by the courts.  This was seen in the 2001, Corpus Christi Court of Appeals opinion styled, Jones v. Ray Ins. Agency.

What is FEGLI?  FEGLI stands for Federal Employee’s Group Life Insurance and is a life insurance program for Federal and Postal employees and annuitants.  The law related to FEGLI is authorized by law and can be found in Chapter 87 of Title 5, United States Code.  The Office of Personnel Management (OPM) administers the Program and sets the premiums.  The FEGLI regulations are in Title 5 of the Code of Federal Regulations, Part 870.

FEGLI is group term life insurance.  It does not build up cash value.  You cannot take a loan out against your FEGLI insurance.

OPM has a contract with the Metropolitan Life Insurance Company (MetLife) to provide this life insurance.  MetLife has an administrative office called the Office of Federal Employees’ Group Life Insurance (OFEGLI).  OFEGLI is the contractor that adjudicates claims under the FEGLI Program.

Insurance policy language and the Facts of a situation have to be read together to determine whether or not coverage applies to a claim.

Here is a 2021, opinion from the Southern District of Texas, Houston Division, that originates from a claimed pipe burst and the insurance company denial of the claim.  The opinion is styled Lee & Charletha Henry v. Allstate Vehicle and Property Insurance Company.

The Henry’s had a homeowners insurance policy with Allstate.  The Henry’s claim a pipe burst on the second-floor bathroom, causing damage to the first-floor kitchen area.  Allstate denied the claim asserting the policy does not cover the claimed damage because the damage to the kitchen wall and the interior does not appear to be sudden and accidental but the result of ongoing water intrusion from the expansion joint.  The Henry’s sued for breach of contract and various violations of the Texas Insurance Code, Prompt Payment of Claims Act, and the Texas Deceptive Trade Practices Act.

Insurance attorneys understand that when a claim gets denied that the majority of the time, the insured will either walk away or will hire an attorney to fight the claim denial.  When the claim is denied and an attorney is hired, the case is going to end up a lawsuit.  One weapon used by insurance companies in litigation is to litigate the case up to a point and then file a motion for summary judgement.

Understanding how the courts view motions for summary judgment is vital to being able to prepare for and handle these situations.  The motion for summary judgment standard is briefly discussed in a case from the Northern District of Texas, Wichita Falls Division.  The case is styled, Great Lakes Insurance SE v. Horton Family Trust, LLC.

The facts of this case can be read in the opinion.  The focus here is the way the courts look at motions for summary judgment.

Insurance attorneys need to be know this 2021, opinion from the Texas Supreme Court.  It is styled, Louis Hinojos v. State Farm Lloyds and Paul Pulido.

The Texas Prompt Payment of Claims Act, codified in Insurance Code Chapter 542, imposes deadlines on insurers to pay valid claims.  If an insurer fails to comply with Chapter 542, then it is liable for statutory interest on the amount of the claim and attorney’s fees.  The insurer in this case accepted a homeowner’s claim and paid part of it before the statutory deadline.

Dissatisfied with that amount, the homeowner sued, seeking full payment of the claim plus interest and attorney’s fees under Chapter 542.  While suit was pending—and after the statutory deadline for payment had passed—the insurer invoked the policy’s appraisal process.  The appraisers awarded the homeowner substantially more than the amount the insurer had paid.

Denied insurance claims can vary greatly in value.  Factors that figure into the value of the claim include, 1) the base amount of the claim, 2) exemplary damages, 3) Prompt Payment of Claims damages, and 4) attorney fees.

The goal of insurance companies is to litigate cases in Federal Court, while attorneys representing insured would rather litigate case in the State or County Courts.

There are two main issues the Courts look to for deciding whether a case which is removed to a Federal Court by an insurance company gets to be litigated in Federal Court or whether the case gets remanded to the State or County Court.

Many times an insurance lawyer is approached by someone who has a claim denied due to the insurance company assertion that the policy has been cancelled.  In this regard, understanding the reasons for cancellation are important.

“Cancellation” refers to the insurance company’s termination of coverage before the end of the policy period.  A cancellation is in contrast to a non-renewal, which involves an insurer’s unwillingness to reissue the policy following the completion of the policy term of coverage.

As seen in the 1994, opinion from the Waco Court of Appeals opinion, Truck Ins. Exch. v. E.H. Martin, Inc., insurance policies often contain provisions regarding cancellation.  In E. H. Martin, the insurer complied with its own policy provision regarding cancellation when it cancelled the  policy for nonpayment of premiums.  Specific provisions for cancellation of coverage must be precisely followed by the insurer and will be strictly construed by courts.  This is seen in numerous cases, including, the 1993, Texarkana Court of Appeals opinion, Cruz v. Liberty Mut. Ins. Co. and the 2001, Corpus Christi Court of Appeals opinion, Jones v. Ray Ins. Agency.

Life insurance lawyers, disability lawyers, auto policy lawyers, homeowners policy lawyers, and any other type of insurance lawyer needs to be able to read an insurance policy and know how the Courts interpret policies.

A principle that has particular impact is the rule that insurance policies are strictly construed in favor of the insured to avoid excluding coverage.  This is stated in the 1984, Texas Supreme Court opinion styled, Puckett v. U.S. Fire Ins. Co.  Exceptions or limitations on liability are strictly construed against the insurer and liberally in favor of the insured.  This is illustrated in numerous cases from the Texas Supreme Court – 1) the 1991, opinion, National Union Fire Ins. Co. v. Hudson Energy Co., 2) the 1987, opinion, Barnett v. Aetna Life Ins. Co., 3) the 1982, opinion, Blaylock v. American Guar. Bank Liab. Ins. Co., 4) the 1977, opinion, Glover v. National Ins. Underwriters, and 5) the 1896, opinion, Brown v. Palatine Ins. Co.

Stated another way, “An intent to exclude coverage must be expressed in clear and unambiguous language” according to the 1993, opinion styled, State Farm Fire & Cas. Co. v. Reed.

Insurance lawyers need to know how insurance contracts are interpreted by the Courts.

The 1984, Texas Supreme Court opinion styled, Puckett v. U.S. Fire Ins. Co., says that the rule for insurance policies is that they are strictly construed in favor of the insured to avoid excluding coverage.  Exceptions or limitations on liability are strictly construed against the insurer and liberally in favor or the insured.  This is made clear in the 1991, Texas Supreme Court opinion, National Union Fire Ins. Co. v. Hudson Energy Co., and in the 1987, Texas Supreme Court opinion styled, Barnett v. Aetna Life Ins. Co., and the 1987, Texas Supreme Court opinion styled, Blaylock v. American Guar. Bank Liab. Ins. Co., and the 1977, Texas Supreme Court opinion styled, Glover v. National Ins. Underwriters, and as far back as the 1896, Texas Supreme Court opinion styled, Brown v. Palatine Ins. Co.

Stated another way in the 1993, Texas Supreme Court opinion styled, State Farm Fire & Cas. Co. v. Reed, “an intent to exclude coverage must be expressed in clear and unambiguous language.”

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