Insurance Law And Negligence

Grand Prairie insurance lawyers need to understand how negligence works in an insurance case.
Negligence in the insurance context as in other situations, consists of three elements. These are:
1) a legal duty owed by one person to another;
2) a breach of that duty;
3) damages proximately resulting from the breach.
There is a long line of Texas cases supporting the above. These cases go from the Corpus Christi Court of Appeals in the 1985 case, Group Hospital Services, Inc. v. Daniel, and the 1992, Amarillo Court of Appeals case, Pickens v. Texas Farm Bureau Insurance Cos., to the 1990 Texas Supreme Court case, Greater Houston Transportation Company v. Phillips.
In an insurance context, the most likely case of negligence is likely to be a claim for negligent misrepresentation. Texas Courts have adopted the tort of negligent misrepresentation as described by the Restatement (2nd) of Torts, Section 552 in cases involving insurance companies and insurance agents. This section has been cited as authority in the Texas Supreme Court case, Chicago Title Insurance Co. v. McDaniel, a 1994 opinion. This section is also cited by the Houston Court of Appeals [14th Dist.] in the 1994 case, Tri-Legends Corp. v. Ticor Title Insurance Co. and the 2002, San Antonio Court of Appeals case, Nast v. State Farm Fire & Casualty Co. Section 552 says:
One who, in the course of his business, profession or employment, or in any transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
As an example of Section 552 applied to a case, the Nast case is good to look to. In Nast, the plaintiff stated a negligence claim against their insurance agent for affirmative misrepresentations about coverage, saying they were not eligible for flood insurance and that neighbors who had flood insurance had purchased “fake” insurance from a “shyster.”
As another example, in MacIntire v. Armed Forces Benefit Association, a San Antonio Court of Appeals case, the court ruled that a life insurance company owed no duty to provide notices regarding the policy status or termination for failure to pay premiums, thus defeating the plaintiff’s claim for negligent misrepresentation.
Each of these claims for negligent misrepresentation have to be looked at on an individual fact basis by an attorney experienced in handling these types of cases.