Sell Me A Policy That Covers My Property

Read The Policy!  This is what all insurance agents tell their clients.  The insurance company agent is not responsible for telling you what is in the policy.  This is illustrated in a 1983, Texas Supreme Court opinion styled, Parkins v. Texas Farmers Insurance Company.

As a prerequisite to obtaining financing for a real estate purchase in 1976, Parkins, a licensed real estate broker, had to secure insurance for the building. Parkins testified that he contacted Dick Upham, Farmers’ authorized agent, and asked him for “the cheapest insurance I can get.”  Following this conversation, Parkins received a payment plan agreement. In a column headed “Farmers Insurance Group Company” was the notation “Tex. Farmers Fire.”  He soon thereafter received a Memorandum of Policy which referred to the policy as a standard “Homeowners Form B” and contained the following language as part of the printed form:

The above premises of the described dwelling are the only premises where the named insured or spouse maintains a residence, other than business property or farms.

Parkins did not receive a copy of the policy itself as it was held by the mortgagee.  His coverage was renewed thereafter annually.

Whether Parkins lived in the house himself when the original policy was issued was disputed.  At trial he testified that he received mail at the address but never made it his residence.  On cross-examination, however, Farmers introduced Parkins’ deposition testimony wherein he stated that he maintained it as his home, keeping furniture and personal belongings there and spending the night there.  Parkins also testified in the deposition, when asked where his other residence was at this time, that he didn’t remember.

Eventually Parkins rented the house as a residence to several tenants.  While it was thus occupied on March 9, 1979, it burned.  In his proof of loss statement Parkins stated that Upham had originally written him an “HOB” policy.  When he filed this proof of loss, Parkins received a letter denying his claim on the ground that he had a homeowners policy designed to cover the building in the event of fire only so long as it was owner occupied.

Parkins argues here that the court of appeals erred in affirming the trial court’s judgment N.O.V. because he was not required to plead and prove the terms of any policy to maintain a cause of action under the DTPA.  That is, Parkins asserts that he is not seeking to recover on the homeowners policy, which admittedly does not apply here, or a breach thereof; rather, he bases his claim on an alleged misrepresentation that constituted a deceptive act.

The Texas Supreme Court agreed that Parkins failed to prove that Farmers did in fact misrepresent the terms of his insurance coverage.  Parkins contends that Farmers led him to believe that his house was protected against fire loss when it was not.  The record reveals, however, that Parkins only proved that he was required to obtain “some” insurance on the house by his mortgage company, that he requested the “cheapest insurance I can get,” and that Farmers did in fact issue a policy providing fire coverage so long as the house was owner occupied.

Parker no where shows that Farmers ever assured him of coverage against fire loss under the circumstances present here or that they would issue a particular kind of policy.

Rather than proving a misrepresentation on the part of Farmers, Parkins has instead shown only that he fell within an exclusion of his policy.  Because there is no evidence that Farmers misrepresented the terms of Parkins insurance coverage, the judgment against Parkins was affirmed.