Auto Policy Interpretation – Medical Payments Coverage

Grand Prairie attorneys and attorneys in Arlington, Mansfield, Fort Worth, Dallas, and anywhere else in Texas would need to have a basic understanding of automobile insurance policies. The following case helps someone to understand how one part of an auto policy is interpreted.
The style of the case is, Wesley Howard Williams v. Employers Mutual Casualty Company. This is a case that was decided in 1963, by the San Antonio Court of Appeals.
This case tells us that “medical payments coverage” is based upon contract and not on the insured’s negligence.
The appeal in this case results from a take nothing summary judgment granted Employers in a suit filed by Williams on two drafts issued by Employers. Payment was refused when the drafts were presented. The facts are not in dispute and both parties filed a motion for summary judgment. The question present to the court was whether or not there was consideration for the issuance of the drafts.
Williams had been involved in an automobile collision with a third party and sustained injuries whereby he incurred medical expenses in the amount of $509.25. Williams was in the course and scope of his employment at the time of the accident. Employers had issued a liability policy to Williams employer on the automobile Williams was operating. The policy had medical payments coverage in the amount of $2,000. This coverage contained an exclusion that it does not apply to bodily injury of any employee arising out of and in the course of (1) domestic employment by the named insured, if benefits are in whole or in part either payable or required to be provided under any workmen’s compensation law, or (2) other employment by the named insured.
Williams employer carried workmen’s compensation, but Williams elected to settle with the insurance of the third party. He knew this election precluded him from asserting a claim for compensation benefits.
An adjuster for Employers mistakenly issued two draft payments to Williams under the medical payments coverage and Williams signed a release. Upon issuance of the checks, the adjuster realized his mistake and telephoned Williams and advised him of the exclusion in the policy and that payment on the drafts would be stopped.
This appeals court upheld the ruling in favor or Employers by the trial court. In so doing, the appeals court pointed out that Williams medical expenses were excluded under the express terms of the policy provisions. He admittedly was in the scope of his employment and furthermore his employer had a policy of workmen’s compensation insurance whereby medical benefits were either payable, or required to be provided, for the injuries sustained by Williams.
William’s attorney argued that there was consideration for the drafts in that they were issued in compromise of a disputed claim.
The court said that the release executed by Williams was in exchange for drafts in the exact amount of his medical expenses and there was no consideration for release of any additional expenses which might be incurred under the coverage provided for in the policy and since the medical payments coverage was specifically excluded under the facts of the case, the lower court ruling would stand.
Most people do not even know they have this coverage in their policy. As a result, this is further evidence why a person needs to seek the counsel of an experienced Insurance Law Attorney when involved in a wreck.

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