Articles Posted in Auto Insurance

Insurance lawyers can tell prospective clients that most pages in an insurance policy are pages explaining exclusions and limitations to what a policy will pay.  This is no different when it comes to auto insurance.

The standard auto policy does not provide med pay coverage for any person for bodily injury occurring during the course of employment if worker’s compensation benefits are available for the bodily injury.  This exclusion is discussed in the 1963, San Antonio Court of Appeals opinion styled, Williams v. Employers Mutual Casualty Co.  Thus, med pay coverage will apply only if the insured does not have worker’s compensation benefits available to him or her.

Like the liability coverage, med pay coverage does not extend to the named insured while he or she is occupying a vehicle, other than his or her covered auto, which is owned by him or her or furnished or available for his or her regular use.  This was discussed in the 1965, Tyler Court of Appeals opinion styled, Vaughn v. Atlantic Insurance Company.  To extend such coverage would force the carrier to accept a greater risk without receiving a corresponding premium.

Medical Payments Coverage in an automobile policy is also known as Med-Pay coverage.  Med-Pay is an optional coverage.  Under this coverage, the insurance company agrees to pay “reasonable expenses incurred for necessary medical and funeral services because of bodily injury caused by accident and sustained by a covered person.”  This insuring agreement uses the term “caused by accident” as opposed to the more specific phrase “auto accident” used in liability in the liability insuring agreement.  This coverage defines “covered person” as the named insured or any family member while occupying or being struck by a motor vehicle.  Also, any person occupying the named insured’s covered auto is entitled to med pay coverage.  The coverage for those persons other than family members, however, is limited to occupancy in a covered auto.

According to the 1973, Waco Court of Appeals opinion, Dhane v. Trinity Univers. Ins. Co., med pay coverage is generally broader than PIP coverage.

Unlike any other provision in the Texas Auto Policy, Texas courts have ruled that med pay benefits can be “stacked.”  These courts include the Austin Court of Appeals in the 1969, opinion styled, Harlow v. Southern Farm Bureau Cas. Ins. Co. and the Houston Court of Appeals in the 1961, opinion styled, Southwestern Fire & Cas. Co. v. Atkins.  In other words, an insured may receive med pay benefits as if the benefits were being paid on two separate policies when a single policy covers two automobiles and the premium charged on the policy has been paid separately on each automobile.  Stacking is only allowed with med pay benefits according to the 1978, Texas Supreme Court opinion styled, Holyfield v. Members Mut. Ins. Co.

Dallas and Fort Worth area insurance lawyers need to read this November, 2017, opinion from the San Antonio Court of Appeals.  It is styled, Farmers Texas County Mutual Insurance Company v. Zuniga.

Zuniga was walking to school and struck by a car driven by Christopher Medina.  Zuniga sued Medina for negligence and gross negligence.  A jury awarded Zuniga $93,244.91 in actual damages and $75,000.00 in punitive damages.  Farmers insured Medina and paid the actual damages but then filed a declaratory judgment action seeking a declaration that the policy did not cover punitive damages.

Zuniga filed a motion for summary judgment on the punitive damages issue.  Farmers prevailed in this case.

Lawyers handling car wreck cases would be especially interested in this 2017 opinion from the Texas Supreme Court.  It is styled, Farmers Texas County Mutual Insurance Company v. Jennifer L. Zuniga et al.

This is an appeal from the granting of a summary judgment in favor of Zuniga wherein Farmers had asked the court to rule that there is no coverage under the policy at issue for punitive damages.  This Court reversed that summary judgment.

Determining whether exemplary damages for gross negligence are insurable requires a two-step analysis.  First, the Court decides whether the plain language of the policy covers exemplary damages sought in the underlying suit against the insured.  Second, if the Court concludes that the policy provides coverage, it determines whether the public policy of Texas allows or prohibits coverage in the circumstances of the underlying suit.

Weatherford insurance lawyers know about the 515A Endorsement (a named driver exclusion) that applies to auto policies.  These 515A Endorsements are discussed in a 2013, El Paso Court of Appeals opinion styled, Stadium Auto, Inc. v. Loya Insurance Company.

Olga Salazar purchased and financed a vehicle through Stadium.  A Loya policy was issued which contained a 515A Endorsement listing Junior Sanchez as an excluded driver.  Junior had a wreck in the vehicle after allegedly taking the keys from Olga’s purse without permission.  Olga ceased payments to Stadium and Stadium sought payment from Loya.  Loya refused coverage based on the exclusion of coverage for Junior.

Stadium sued Loya alleging violation of Texas Insurance Code, Section 541.060 and the Texas DTPA, Section 17.46(b).  Stadium also alleged that Loya was estopped from denying liability based on the 515A Endorsement.  Loya also asserted that they were entitled to payment based on the 530A Endorsement that provides coverage for the loss payee despite the named driver exclusion.

Insurance attorneys need to read an August 2017, opinion from the 14th Court of Appeals.  It is styled, Tiffany Falkenhagen Thompson v. Geico Insurance Agency, Inc.

Texas Personal Automobile Policy’s require the policyholder to notify the insurer of the policyholder’s acquisition of a replacement vehicle for the coverage to extend to damage to the newly acquired vehicle.  This case is presented on cross motions for summary judgment regarding the notification requirement in the policy.  Tiffany says the policy provision does not apply to leased vehicles or alternatively, the policy language is ambiguous.  Geico says they were not timely notified of the replacement vehicle and thus, there is no coverage.  The trial court ruled in favor of Geico and this appeals court upholds that ruling.

Tiffany owned a 201  Infiniti G37 auto and secured insurance from Geico.  She traded in the G37 and leased a 2015 Infiniti Q50 auto.  A few months later while driving the Q50, Tiffany was involved in an accident.

Not just Kimble County automobile owners but everyone should be concerned about a story published recently in the New York Times.  It is titled, “Millions Live Where Car Insurance Is Unaffordable, Study Says.”

Millions of Americans live in areas where auto insurance is unaffordable according to a new analysis from the federal government.

The report, from the Federal Insurance Office, analyzed premiums for basic liability automobile coverage in more than 9,000 zip codes with high proportions of “underserved” consumers, including minorities and people with low to moderate incomes.  It found that rates were unaffordable in 845 of such zip codes, or about 9 percent of them.  Nearly 19 million people live in the unaffordable areas, the report found.

Benbrook insurance attorneys can discuss the penalties for delays in paying a claim. These penalties are spelled out in the Texas Prompt Payment of Claims Act (TPPCL) and are found in the Texas Insurance Code.

The amount of an insured’s claim (and/or the amount for which an insurer is liable) is often based on third-party invoices that the insured has not incurred, in amounts the insured cannot necessarily predict, at the time the insured submits its notice of claim to the insurer. Consider duty to defend or environmental clean-up coverage, where the amount of the claim can increase every month.

Naturally, there are questions regarding when the 18% penalty begins to accrue on such claims. The TPPCA language does not provide specific guidance on these calculations, but courts in the Fifth Circuit have recently indicated the methodology is based on the date of the TPPCA violation and not necessarily the date the cost was incurred.

Total loss cases dealing with automobiles have certain rules that apply.  A Dallas Court of Appeals case discusses this issue.  The opinion is styled, Sunny Letot v. United Services Automobile Association.  There are multiple issues in this case but the opinion dealing with the total loss of an automobile is something many people will have the occasion to see.

The opinion is an appeal from a summary judgment in favor of USAA.  The part of the opinion dealing with total loss was reversed by this appeals court.

Letot was involved in a wreck that resulted in the total loss of her vintage 1983 Mercedes.  Letot was offered $2,494.02 by USAA which was rejected.  However, USAA still mailed a check for that amount and the check was returned.  The same day the check was mailed, USAA sent TxDoT a letter informing them the vehicle had been totaled.  Letot had the vehicle scrapped to avoid incurring further storage fees.  USAA later filed a report with TxDoT stating the initial report was filed in error.

Excluded drivers and Named Driver auto policies are the last thing someone wants to find out about the driver who caused the wreck. Here is some law that is helpful to know when an insurance company tells you the driver was not covered under the policy.

A starting point is the Texas Transportation Code, Section 601.076. This is contained in the Texas Driver Responsibility Act. Sec. 601.076. REQUIRED TERMS: OWNER’S POLICY. An owner’s motor vehicle liability insurance policy must:

(1) cover each motor vehicle for which coverage is to be granted under the policy; and (2) pay, on behalf of the named insured or another person who, as insured, uses a covered motor vehicle with the express or implied permission of the named insured, amounts the insured becomes obligated to pay as damages arising out of the ownership, maintenance, or use of the motor vehicle in the United States or Canada, subject to the amounts, excluding interest and costs, and exclusions of Section 601.072.