On-Line Insurance Policies

Everybody in Arlington, Grand Prairie, Mansfield, Burleson, De Soto, Dallas, Fort Worth, Benbrook, and other places in Texas have access to internet services. Using the internet, people have started purchasing all kinds of goods and services. One of the things purchased a lot on-line now days is insurance policies. When this happens some interesting questions can arise. How about this:
Let us say that you desire to purchase auto insurance on-line. One thing we have learned from earlier blogs at this site is that Insurance Law in Texas requires that on all insurance policies issued in the state of Texas that Personal Injury Protection (PIP) benefits be part of the policy. This is stated in the Texas Insurance Code, Section 1952.152(a). Section 1952.152(b) tells us that this coverage must be rejected in writing otherwise it is part of the policy.
Next, let’s say that when you purchase an auto policy on-line that you are prompted to check a box indicating a rejection of PIP coverage but because this is being purchased on-line there is no signature. Have you properly rejected PIP coverage? Or do you have the coverage?
One thing you would want to do is discuss your situation with an experienced Insurance Law Attorney. What he would tell you is that as of today’s date there are no court cases dealing specifically with this issue. Next, he would opine that this is something the legislature is going to have to take up some day because the current law in this area is not properly addressing out internet reality.
Having said the above, the next point of discussion with someone consulting with him would be to point out the case, Carlotta Ortiz and Mario Zepeda v. State Farm Mutual Automobile Insurance Company. This is a 1997, San Antonio, Court of Appeals case.
This case involves the written rejection exception to the above referenced insurance laws.
Here are the facts in this case:
Ortiz and Zepeda applied for auto insurance through the Texas Automobile Insurance Plan (TAIP). The TAIP application offered them PIP coverage. The application required them to either accept or reject PIP coverage by placing a check mark next to either “accept” or “reject”. They rejected coverage and signed their names. The agent signed also, indicating that he had explained the coverage to them. The applications were subsequently assigned to State Farm Mutual Automobile Insurance Company (State Farm), which then issued policies consistent with the applications. After being involved in accidents they made a claim for the PIP benefits which were denied by State Farm.
Essentially, Ortiz and Zepeda were argueing that the application and the policy were not the same and that the law required coverage unless the signed rejection was part of the policy.
Here is what the court pointed out; The Texas Insurance Code requires that every auto liability policy issued in Texas, provide PIP coverage unless “any insured named in the policy shall reject the coverage in writing …” The underlying policy behind the statute is the state’s interest in protecting conscientious and thoughtful motorists from financial loss.
Other court decisions have made clear that the courts must liberally construe the PIP statute to give full effect to the public policy broadly requiring PIP coverage. Because of the remedial purpose behind the statute and because of the liberal interpretation effecting coverage, the written rejection exception should be strictly construed to protect the insured.
Although a rejection is required to be in writing, the statute does not require a special procedure or special language for the writing. Execution of a satisfactory rejection requires only minimal effort by the insured. Ortiz and Zepeda contend that because their written rejections were not attached to or incorporated in their respective insurance policies, the rejections in the applications are not valid. In essence, they were asking the court to interpret the written rejection language in the statute as requiring that the writing be attached to or in some other way incorporated in the policy.
In making its final ruling the court discussed what other courts have decided and ultimately ruled that the Texas Insurance Code does not specifically require that an insured’s rejection of PIP coverage be attached to or incorporated in the policy. Instead, the statute only requires the rejection of coverage to be in writing.
Based on the decision in the case briefly discussed here, it appears a court would uphold a box being checked on an on-line auto insurance application as being sufficient rejection “in writing” of PIP coverage.
If something like this happens to you, check with an attorney familiar with the law. He may be able to find ways to get you the coverage you are entitled to.