False Representations By Insurance Companies And Agents

If you have an insurance agent in Grand Prairie, Arlington, Mansfield, De Soto, Aledo, Duncanville, Bedford, Fort Worth, Weatherford, or anywhere else in Texas, you might wonder if the guy was being completely honest with you when he sold you the insurance policy on your car or auto.
Lawyers.com defines false representation as an untrue or incorrect representation regarding a material fact that is made with knowledge or belief of its inaccuracy.
In the Texas Supreme Court case, DeSantis v. Wackenhut Corp., a 1990 case, the court said a false representation must involve an existing or past material fact, rather than a statement of opinion, judgment, probability, or expectation in order to constitute actionable fraud. Statements concerning future events, sales talk, “puffing,” and other similar statements are not considered actionable misrepresentations. This was stated by the Texas Court of Appeals in Tyler, in 1978, in the case, Hicks v. Wright. Similarly, representations concerning future events are not actionable unless at the time the statement or promise was made, the person making it did not intend to perform. This was stated by the Dallas Court of Appeals in 1976, in the case, Stone v. Enstam.
The Texas Insurance Code has a statute dealing with misrepresentations of insurance policies. Texas Insurance Code, Section 541.061, is titled “Misrepresentation of Insurance Policy.” It says:
It is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to misrepresent an insurance policy by:
(1) making an untrue statement of material fact;
(2) failing to state a material fact necessary to make other statements made not misleading, considering the circumstances under which the statements were made;
(3) making a statement in a manner that would mislead a reasonably prudent person to a false conclusion of a material fact;
(4) making a material misstatement of law; or (5) failing to disclose a matter required by law to be disclosed, including failing to make a disclosure in accordance with another provision of this code.
So now, what happens if false representations are discovered?
The 1977, Corpus Christi Court of Appeals case, Neuhaus v. Kain, says, anyone may sue for damages who has suffered injury in reliance on a misrepresentation made to them.
Next, the Fort Worth Court of Appeals, in 1960, in R.O. McDonnell Dev. Co. v. Schlueter, said that all persons who commit fraud are liable for the consequences of such fraud.
With regard to a principle – agency relationship, a principle may be held liable for the fraudulent representations of an agent if an agency relationship existed and if the acts committed by the agent were within the scope of the agent’s authority. This was spelled out in a 1970, Houston [14th] Court of Appeals case, Pasadena Assoc. v. Connor. This means that not only is an insurance agent liable for his misrepresentations but so is the insurance company.
The best thing to do is seek the assistance of an experienced Insurance Law Attorney when you feel like you have had false representations made to you. All these situations are fact specific in determining whether or not there is a case worth pursuing.