Fort Worth insurance attorneys need to make part of their job, keeping up with games the insurance companies play.
A recent article by The Texas Tribune tells us a little about a game State Farm Insurance Company has been up to.
Insurance Commissioner Eleanor Kitzman responded to Sen. Rodney Ellis’ letter on the criminal investigation of State Farm by the Travis County District Attorney’s office in a public letter to the Texas Legislature.
Weatherford lawyers handling insurance claims need to have an understanding of about “good faith and fair dealing” as it relates to an insurance company’s duty it owes one of its insureds.
This is an area of law that a lot of attorneys do not know a lot about. Insurance law cases are not as well known as cases related to criminal law, family law, personal injury, bankruptcy, probate and business matters. There are a lot of statutes related to insurance, most of which are found in the Texas Insurance Code. But there is relevant law related to Insurance Law that is also found in the Texas Criminal Code, and the Texas Code of Criminal Procedure, the Texas Transportation Code, and the Texas Labor Code, to name a few.
The State Bar of Texas, Insurance Law Section, recently published information related to the duty an insurance company owes to one of its insureds. This article dealt with the duty of “good faith and fair dealing” that is owed by the company to its customers.
Grand Prairie insurance attorneys and those in Irving, Dallas, Fort Worth, and other areas in Texas need to keep informed about the wrongs insurance companies are committing on their insureds.
It turns out that State Farm is being investigated for criminal wrongs committed on its insureds arising from hurricane claims. This has been reported by Bloomberg Business Week and the Austin Statesman, as well as other news outlets.
Texas investigators have opened a criminal probe into how State Farm handled what may turn out to be thousands of insurance claims from Gulf Coast homeowners involving damage from Hurricane Ike in 2008, officials said Friday.
Someone in Grand Prairie, Fort Worth, Arlington, Irving, Dallas, Mansfield, or anywhere else in Texas may find themselves in a situation where an insurance company is denying a claim based on the insured making a misrepresentation in an application for insurance coverage. Does that mean the insurance company wins? Here is a case that might help with the answer.
The case is styled Union Bankers Insurance Company v. Thomas D. Shelton and Ann Shelton. It is a Texas Supreme Court case decided in 1994.
The Sheltons sued Union Bankers and its agent Donny Stone after Union Banker cancelled Mr. Shelton’s health insurance policy on the basis of an alleged misrepresentation in his application. The Sheltons alleged Union Banker breached the contract and the duty of good faith and fair dealing dealing with improperly canceling the policy.
Homeowners in Grand Prairie, Fort Worth, Arlington, Hurst, Euless, Bedford, and other places in Tarrant County and Texas should find the following article interesting.
This is an article from the L A Times that ran on March 18, 2012. The title of the article is “Insurance Company Ordered To Pay Homeowner $8 Million.”
The article tells us that an elderly Hollywood Hills resident whose home was nearly destroyed when a dump truck crashed into it, rupturing a gas line and causing an explosion, was awarded more than $8 million after jurors found that his insurance company of more than 50 years failed to honor its contract.
Insured people in Grand Prairie, Fort Worth, Arlington, Dallas, and other places in the Dallas and Fort Worth metroplex would probably not understand how to hold an insurance company responsible for a knowing violation of the Texas Insurance Code. Here is a case where the lawyer had success in this area of the law.
The style of the case is, State Farm Lloyds v. Johns. The case was decided by the Dallas Court of Appeals in 1998. Here are the facts.
Ms. Johns’ house was built in 1964. Johns moved in to her house in 1972. In the summer of 1990, Johns noticed evidence of extensive foundation problems including door mis-allignment, significant cracks in the interior walls and a slope to the floor. Repairmen later discovered two plumbing leaks under the house. Johns made a claim for foundation damage alleging that the plumbing leaks caused the soil underneath the house to expand resulting in an upheaval of the foundation, thereby damaging the structure. State Farm hired a foundation expert, Mr. Betting, who concluded that Johns’ foundation problems were not caused by the plumbing leaks, but rather asserted that the damage occurred from natural soil movement common to north Texas. State Farm’s homeowners policy excluded damage caused by ordinary settlement. Based on the exclusion State Farm denied the claim.
Someone in Weatherford, Fort Worth, Aledo, and other places in Tarrant and Parker County might have a hard time understanding what is “bad faith” in most insurance situations. Here is a case that gives some insight into how it works.
The case is State Farm Lloyd’s v. Johns and was decided by the Dallas Court of Appeals in 1998. Here are some of the background facts.
Johns’ house was built in 1964. Johns moved in to her house in 1972. In the summer of 1990, Johns noticed evidence of extensive foundation problems including door misalignment, significant cracks in the interior walls and a slope to the floor. Repairmen later discovered two plumbing leaks under the house. Johns made a claim for foundation damage alleging that the plumbing leaks caused the soil underneath the house to expand resulting in an upheaval of the foundation, thereby damaging the structure. State Farm concluded that Johns’ foundation problems were not caused by the plumbing leaks, but rather asserted that the damage was caused by ordinary settlement. Based on the exclusion, State Farm denied the claim.
When does someone in Grand Prairie, Fort Worth, Burleson, Crowley, Lake Worth, Benbrook, Alvarado, Keene, Joshua, or anywhere else in Texas, know that the insurance company is taking too long to pay the claim?
There is no easy answer to the question. The laws related to the time frame for payment of claims are found in the Texas Prompt Payment of Claims Act. A reading of these laws is confusing. Even an experienced Insurance Law Attorney will have to read the law, look at the facts in the case then reread the law and see how it applies to the facts of the case. A big part of this law is the penalty the insurance company is subject to having to pay for violations of the law. So how is this penalty calculated?
The Fort Worth Court of Appeals decided a case in 2008, that provides some guidance. The case is styled, GuideOne Lloyd’s Insurance Company v. First Baptist Church of Bedford. Here are some relevant background facts:
Insureds in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, Springtown, Millsap, Brock, and all other places in Parker County have to protect themselves immediately by seeing an Insurance Law Attorney when their insurance company refuses to defend them in a lawsuit.
A 1998, Dallas Court of Appeals case serves as an example of what happens when someone delays in hiring an attorney. The style of the case is, Greenberg, et al v. Cigna Lloyds Insurance Company. Here are some facts:
Greenburg was the independent executor as well as the trustee for his brother’s children. The children eventually brought suit against Greenberg in Probate Court alleging among other things that Greenberg was liable for improper self dealing and breach of fiduciary duty. After receiving notice of the suit, Greenberg contacted two insurance companies that had secured insurance policies, including commercial general liability policies. Greenberg and his sons were told that there was no coverage under the policies. Greenberg hired an attorney to represent him in the probate suit. Judgment was rendered against him. Later, he entered into a compromise settlement agreement under which Greenberg agreed to pay $1.1 million. The trial in the underlying probate case began on September 25, 1989. In September 1994, Greenberg filed suit against Cigna as well as other insurance companies alleging breach of contract, breach of fiduciary duty, breach of duty of good faith and fair dealing, negligence, gross negligence, breach of express and implied warranties, violations of Texas Insurance Code, Section 541.060, and the DTPA, and intentional misrepresentation. Cigna filed a motion for summary judgment which was granted on the basis of a limitations defense. Greenberg then filed this appeal.
Residents of Grand Prairie, Arlington, Fort Worth, Dallas, and other areas in the State of Texas would want to understand what happens when a policy payment is missed. The following case is one where the policy ended up lapsing. An experienced Insurance Law Attorney may have been able to get a different result.
The case is State Farm Life Insurance Company v. Beaston. The case decided in 1995, by the Texas Supreme Court. Here is some background.
Beaston purchased a graded premium whole life policy from State Farm. The premium on the policy was due on 12/28/93. The thirty-one day grace period expired on 1/28/94. Three days after the expiration of the grace period, Beaston died in an automobile accident. State Farm refused to pay benefits because coverage had expired. Beaston’s wife, the beneficiary, brought suit alleging that the policy remained in force because of its dividend-at-death provision. The trial court found the policy ambiguous and instructed a verdict in favor of Beaston with respect to coverage.
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