Insurance Agent Misrepresentations

Dallas insurance lawyers know the ways insurance agents can be held liable for the misrepresentations they make to insureds. A 1994, El Paso Court of Appeals case is good to review. It is styled Hart v. Berko. Here is some of the relevant information.
This is a suit brought under provisions of the Texas Deceptive Trade Practices Act and the Texas Insurance Code by the policy owner against its insurance agent for damages arising out of a dispute over alleged representations concerning the amount of fire insurance coverage in effect at the time of a substantial fire loss.
In January of 1990, Berko, Inc. d/b/a El Encanto (Berko), through its Vice President, Sara Blaugrund (Blaugrund), requested that Phil Hart (Hart), employed by D.J. Enterprises, Inc. d/b/a Associated Insurance Agency (D.J.), increase the amount of insurance coverage on its building from $242,000 to $650,000. According to Blaugrund, Hart represented to her that he had obtained fire coverage of $600,000 on the building. On February 27, 1990, the building was completely destroyed by a fire. On the day after the fire, Hart notified Blaugrund that the building had only $242,000 coverage.
Berko filed a lawsuit and a jury found in favor of Berko and the court rendered judgment on the verdict in favor of Berko for approximately $1,218,805.
Hart asserted that because Blaugrund testified that even “if she had known that Hart had not yet obtained the additional fire coverage on February 21, she would not have looked for other insurance not [sic] would she have taken any other precautions against fire.” Therefore, the argument goes, Berko cannot show that it relied on Hart’s alleged statement and cannot predicate producing cause solely on Blaugrund’s “mistaken belief” that Berko had a total fire coverage of $600,000 on its building.
It is clear from prior Texas cases following Texas Supreme Court decisions that reliance is not a necessary element that a consumer must prove in order to recover under Section 17.50(a)(4) of the DTPA or Section 541.151 of the Texas Insurance Code. The proof need only establish that the damages were factually caused by the defendant’s misrepresentation.
This case is relevant because it makes the burden of proof easier for a person who has been done wrong by an insurance agent.