Articles Posted in Auto Insurance

This time, one of the insurance company games does not involve cheating on a claim, rather it involves they overcharging for auto insurance.

The information comes from an Insurance Journal story titled, Lawsuit Says Fargo Executives Knew About Insurance Overcharges.

The article tells us that Wells Fargo & Co. executives were warned that an auto insurance plan could be overcharging customers four years before the bank scrapped the program, according to a complaint released by a Judge.

In cases involving insurance, an experienced insurance lawyer needs to be hired.  This is illustrated in an Austin Court of Appeals opinion styled, Jessica Dennis and Douglas Dennis v. GEICO.

In August 2016, GEICO sued the Dennises, alleging that a “motor vehicle owned by Plaintiff’s insured Rene Zavala … was damaged by a vehicle negligently operated by Douglas Dennis, whose negligence proximately caused the collision and damages in the amount of $10,417.28.  Plaintiff compensated its insured for the loss, thereby becoming subrogated in the amount of $10,417.28.”  The petition further alleged that, “at the time of the collision, Jessica Dennis was the owner of the motor vehicle driven by Douglas Dennis, and the vehicle was operated with Jessica’s consent and knowledge.  Upon information and belief, Jessica wrongfully and / or negligently entrusted his/her motor vehicle to an incompetent, reckless, unlicensed and uninsured driver”

The Dennises filed an answer and counterclaim asserting that it was Zavala, not the Dennises, who negligently caused the collision.  The Dennises later filed with the Court a number of documents purporting to demonstrate the damages they incurred as a result of the collision.  Douglas also filed an affidavit alleging that Zavala’s negligence caused the collision.

Insurance policies have to be read carefully by an insured and by the insurance law lawyers who want to help the insured.  This is illustrated in an Austin Court of Appeals case styled, Progressive County Mutual Insurance Company v. Edwin Emenike.

This is a summary judgment case granted in favor of Edwin.  Progressive filed an appeal and this Court then reversed and rendered in favor of Progressive.

The facts are undisputed.

An insurance lawyer in Dallas or Fort Worth who understands insurance law will tell a client that when a car wreck occurs, the person or entity who caused the wreck is the proper party to sue, not the person or entity’s insurance company.

This is illustrated in this 2018, Eastland Court of Appeals opinion styled, Randy Durham v. Hallmark County Mutual Insurance Company.

Durham was injured in a wreck with Bobby Burl Straley and L&L Trucking.  Durham sued Straley and L&L originally, then sued Hallmark, the alleged insurance company of Straley and L&L.

Almost all auto policies will have a form to fill out called a 515A.  This form when filled out and signed excludes named drivers from any coverage while they are operating the otherwise insured vehicle.

This topic was discussed in a declaratory judgement opinion from the Dallas Court of Appeals styled, John Dempsey v. ACCC Insurance Company.

ACCC sought to have the Court declare that ACCC had no liability under a policy of insurance issued to Sherman Clifton.  Shashana Clifton was an excluded driver under the policy.  All the paperwork making the exclusion binding was properly completed.

Insurance lawyers trying to help client with automobile property damage will find they need to understand and be able to explain the damages in two ways.  Actual Cash Value (ACV) and diminished value.

“Actual cash value” is the value of the vehicle, less depreciation.  The limitation of “actual cash value” has been upheld and found to be reasonable cash market value of the vehicle before the loss.  This is discussed in the 1968, Texas Supreme Court opinion styled, Superior Pontiac Co. v. Queen Insurance Company.

Even after a vehicle is fully repaired, its value may still be diminished, but the insurer is not liable to pay for this diminution of value.  This is discussed in the 20023, Texas Supreme Court opinion styled, American Manufacturers Insurance Co. v. Schaefer.  Keep in mind this is in the context of your own insurer, not the other guys insurance company.  The other guy’s insurance can be held responsible for diminution of value.

The terms “repair” and “replace” mean restoring the automobile to essentially the same condition as it was in immediately before the collision.  It would not be restored to the same condition if the repairs left the market value of the auto substantially less than the value before the collision.  This was the decision in the 1969, Corpus Christi Court of Appeals opinion, Northwestern National Insurance Company v. Cope.

As stated in the 1968, Tyler Court of Appeals opinion, Agricultural Workers Mutual Automobile Insurance Company v. Dawson, if a vehicle is repairable, the insured is entitled to no more than what it would cost to repair the property.  This presumes the vehicle has been repaired to essentially the same condition that it was in before the loss.  But if, after repair, the vehicle has not been restored to the same condition as it was in immediately before the loss, the owner may be entitled to recover for diminution in value without necessarily showing the repairs were inadequate.  This was discussed in the 1968, Texas Supreme Court opinion styled, Superior Pontiace Co. v. Queen Insurance Co.

If an insurer repairs a vehicle, it must use parts of “like kind and quality” according to the 2003, Texas Supreme Court opinion styled, American Manufacturers Mutual Insurance Co. v. Schaefer.

Here is some basic information about automobile policy coverage for damage to your insured vehicle.

Under this portion of an auto policy the limit of liability to the insurer is the lesser of:  1)  the actual case value of the stolen or damaged property, 2)  the amount necessary to repair or replace the property with like, kind, and quality, 3)  the amount stated in the declarations of the policy.

The terms “repair” and “replace” mean restoring the auto to essentially the same condition as it was in immediately before the damage.  This is discussed in the 1969, Corpus Christi Court of Appeals opinion, Northwestern National Insurance Co. v. Cope and the 1998, Austin Court of Appeals opinion, Great Texas County Mutual Insurance Co. v. Lewis.

Here’s some basic information for insurance lawyers.

“Collision” is defined in the standard policy as “the upset, or collision with another object, of your covered auto.”

As an example, in the 1984, Amarillo Court of Appeals opinion, Nutchey v. Three R’s Trucking Company, Inc., a three-inch depression in a road, which caused damage to a trailer fell under this definition of “collision.”

The terms of coverage for damage to the auto are fairly straightforward: “named-peril” coverage is provided on “covered autos.”  Specifically, the Texas Personal Auto Policy provides that the carrier will pay for “direct and accidental loss to your covered auto.”  The coverage is divided into “collision” coverage and “coverage other than collision.”  The “other than collision” coverage insures against more causes of loss than collision coverage.  If both collision coverage and the “other” peril coverage are purchased then the insured is said to have “comprehensive” coverage.   Different deductibles are charged for each coverage because insureds elect not to carry one of the two available coverages.

The most common type of loss is “accidental loss,” however the definition of “accidental loss” loss is not in most policies.  In 1997, the Austin Court of Appeals issued an opinion in State Farm Mutual Automobile Insurance Co. v. Kelly, which held that an “accidental loss” is a loss that does not ordinarily follow and cannot reasonably be anticipated from the producing act, that is, one that the actor did not intend to produce.  In Kelly when an insured made a good faith purchase of a stolen vehicle and insured it, only to have the police confiscate it and return it to its true owner, such an act is not the natural and probable result of the insured’s good faith purchase.  Accordingly, the loss of the vehicle was “accidental.”  Even though the insured intentionally purchased the vehicle, the ensuing confiscation by the police was unexpected, unanticipated, and unintentional on the insured’s part.  The court went on to say that a stolen vehicle, newly acquired by an insured was a “covered auto” even if the insured did not have good title.  The insured had an insurable interest that was enough to make it a covered auto.

In the 1955, Fort Worth Court of Appeals opinion, Farmers Insurance Exchange v. Wallace, an auto upset by a strong gust of wind while being driven on a public road was an accidental loss.