Duty To Cooperate Under Texas Insurance Law

Before discussing the topic of this writing, a little side note. When suing insurance companies, they of course do not want to be sued, but when that happens they prefer to fight their battles in Federal Court rather than State Court. The Plaintiffs, who are the people usually suing the insurance companies would prefer to be in State Court. There are many reasons for this but what is important to know is, one, only an experienced Insurance Law Attorney fully understand what was just said and, two, only an experienced Insurance Law Attorney knows ways of preventing an insurance lawsuit from being removed to Federal Court, if it can be done.

Texas Insurance Law requires that the insured person cooperate with their insurance company when the company is investigating a claim. This is true whether the claim is being made by the insured person against their insurance company for benefits or the claim is being made against the insured person by a third party. The reasoning for this is not difficult. The insurance company needs to know what happened so that they can evaluate the claim being made. An obvious example of the insurance refusing to pay on a claim is found in a recent Federal Court case, State Farm Lloyds vs. Tony Ray Brown.

In Brown, the insured, Brown, had shot another person in the face. Brown would not cooperate with his insurance company in any way when he was sued for the shooting. He did not turn the lawsuit papers over to his insurance company, he did not cooperate with their investigation as to the shooting being an accident or deliberate, he did not cooperate with the insurance company’s efforts to determine if the victim had done anything wrong in causing or contributing to the shooting. Brown simply did nothing. The only thing the insurance company knew about the incident was what the victim and the victims lawyers said. This case was a blatant “lack of cooperation” and thus the Court voided the insurance coverage.

Here is the problem. When an insurance company investigates a claim that is being made against them, they are not just trying to determine the value of the claim. They are also investigating and looking for ways to keep from paying the claim or if they know they are going to have to pay, they are looking for ways to lessen the total amount to be paid on the claim. Any time an insurance company starts asking for lots of paperwork or wants to take a recorded statement and especially if they want to take a statement under oath, then these are signs they are looking to deny or diminish the value of your claim. That is also the time to seek the advise of an experienced Insurance Law Attorney.

An Insurance Law Attorney knows how to assist an insured in cooperating with their insurance company without the insured person saying something that would cause the coverage to be denied or the value of the claim being diminished. If you find yourself in a situation where the insurance company is asking for a recorded or under oath statement then you need to get in touch with an experienced Insurance Law Attorney.