Articles Posted in Home Owners Policies

CNBC published an article in February 2018, titled, “Florida Shootings May Complicate Insurance For Gun Owners.”

To start with, gun owners need to know that most homeowner policies are not going to cover situations where a person has to use a gun.  The policies will cover accidents but not other types of occurrences.

The insurance company Chubb has decided to stop underwriting an insurance policy for gun owners called NRA Carry Guard.  This policy covers gun owners in the event they face legal repercussions following firearm incidents.

Flood insurance premiums are calculated based upon geographic maps setting forth the boundaries for various flood zones.

Because most property insurance policies covering property at fixed locations exclude flooding, flood insurance must be purchased separately.  In 1969, Congress created the National Flood Insurance Program to administer the sale of flood insurance.  National flood insurance is available directly from the Federal Insurance Administration or through hundreds of private insurers who participate in federal insurance programs.  The Federal Emergency Management Agency (FEMA) reinsurers private companies against flood losses.

Contract claims must be filed in federal court, and are subject to strict requirements of the policy and federal law.  Insureds still have the right in the Fifth Circuit to bring suit on extra-contractual claims under state law against a flood insurer, according to the 1993 opinion, Spence v. Omaha Indem. Ins. Co.  It should be noted that there is a disagreement in this area as to whether the National Flood Insurance Act of 1968, preempts state law in this area.

Insurance lawyers practicing law in urban areas will usually be around a lot of condominiums.  Most people do not realize there is insurance that is specifically for condominiums.

Two Insurance Services Office (ISO) commercial property forms have been designated for condominium property exposures:

  1. Condominium Association Coverage Form; and

Almost all insurance policies require a “sworn proof of loss” be filed when making a claim.  The Dallas Division, Northern District of Texas, issued an opinion in October 2017, dealing with a situation where the sworn proof of loss was waived by the Court.  The opinion is styled, Alexander Vilaythong v. Allstate Insurance Company.

Vilaythong (Plaintiff) had a homeowners policy with Allstate.  Plaintiff suffered a hail storm damage and submitted a claim to Allstate, who estimated damage at $17,053.76.  Plaintiff hired an adjuster who estimated the damage at $40,905.22.

A lawsuit ensued and Allstate moved to have the case dismissed under Rule 12(b)(1) for lack of standing because Plaintiff did not satisfy a condition precedent for filing the lawsuit, because he had not filed a signed and sworn proof of loss at least ninety one days before suing Allstate.

Insurance lawyers know that one of the more common claims arise from homeowners claims.  Trying to keep the case in State or County Court is most favorable for the homeowner.  However, doing that is more and more difficult.  This is illustrated in the 2017, Northern District, Fort Worth Division opinion, William Mauldin v. Allstate Insurance, et al.

After damages were suffered to the residence of William, he made a claim against his homeowner’s policy with Allstate.  A lawsuit was eventually filed against Allstate and the adjuster Mayella Gonzalez for violations of the Texas Insurance Code and the Texas DTPA.

Allstate and Gonzalez removed the case to Federal Court under 28 U.S.C. Section 1441(a), alleging that the adjuster Gonzalez was improperly joined in an effort to defeat diversity.  When improper joinder is alleged, the Court does a Rule 12(b)(6) type of analysis to determine whether there is a chance of recovery against Gonzalez.

Fort Worth lawyers who end up in Federal Court need to read this opinion from the Northern District, Fort Worth Division, Judge McBride.  The opinion is styled, Antonio Perez v. Allstate Vehicle and Property Insurance Company, et al.

Perez initiated this action by filing a lawsuit in State District Court.  Allstate removed the action to Federal Court, alleging diversity of citizenship and the required amount in controversy.  This Court Ordered Perez to replead so that his pleadings complied  Federal Court pleading standards found in Rule 8(a) and 9(b) of the Federal Rules of Civil Procedure, and directed Perez to file an amended complaint that complied with those requirements.

Perez filed his amended complaint.  Despite the warning provided in the order for repleading, Perez’s complaint as amended was, with few exceptions, basically a repeat of his state court pleadings, alleging, in a conclusory way, violations of sections of the Texas Insurance Code, fraud, and conspiracy to commit fraud, breach of contract, and breach of the duty of good faith and fair dealing.

The San Antonio Division, Western District, issued an opinion dealing with rebuild costs under a homeowners policy that insurance attorneys need to read.  It is styled, Kirk McClelland and Tamre McClelland v. Chubb Lloyd’s Insurance Company of Texas, and Robert Lynn Pritchard.

This is a dispute over coverage and the conduct of Chubb in its payments totaling $145,290.72 to the McClellands.  The McClellands assert they are entitled to greater amounts and sued Chubb and its adjuster for breach of contract and various violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act.  The Court granted summary judgment in favor of Chubb and the McClellands seek to alter that judgment.  The course refused to alter the judgment.

The background facts are summarized as follows.  The McClellands garage apartment was destroyed by fire.  Chubb insured the property under a “Texas Standard Homeowners Endorsement” as well as a “Texas Platinum Homeowner’s Endorsement.”  Their extended policy limits allowed for “reconstruction cost even if this amount exceeds the limit of liability for your dwelling or other structures as shown on the declarations page.”  The Platinum Endorsement defined “reconstruction cost”:

A recent case filed in Tarrant County was removed to Federal Court, Northern District, Fort Worth Division.  One issue dealt with the appraisal provision in the insurance contract.  The style of the case is, Reese Hallak v. Allstate Vehicle and Property Insurance Company.

Hallak sued Allstate for breach of contract and violations of the Texas Insurance Code.  Hallak’s petition alleges Allstate mishandled and underpaid him for two separate property damage claims.  After removal to Federal Court, Allstate filed a Motion To Abate Pending Appraisal, arguing that, pursuant to the terms of the insurance contract between the parties, this case should be abated until conclusion of the appraisal process.

There is no specific federal statute or rule which expressly authorizes a motion to abate.  The court’s decision to do so is largely a matter of judicial discretion.

Insurance attorneys with much experience learn real quick that the insurance companies prefer to litigate cases in Federal Court.  The reason is that Federal Court is much less forgiving of mistakes and the Federal Courts look for reasons to dispose of a case.  This authors opinion is that many of the Federal Courts put a priority on technical rules rather than substance.  This authors opinion is bolstered by the fact that an insurance company will always attempt to get a lawsuit against them in State Court, removed to Federal Court.

This is illustrated in a 2017, opinion from the Southern District of Texas, McAllen Division.  The case is styled, Maria Abdon v. State Farm Lloyds.

In this case, the court is considering State Farm’s motion for partial dismissal on the pleadings, as well as Abdon’s response and alternative motion for leave to amend.  The Court granted State Farm’s motion for partial dismissal and denied Abdon’s motion for leave to amend.

Lawsuits need to be specific when claiming what an insurance company, adjuster, or agent did that caused harm to their insured.  This is illustrated in an Eastern District opinion styled, Scott Jengemuhle and Ty Properties, LLC v. Acceptance Indemnity Insurance Company and Robert Saucier.

This case relates to an insurance claim for storm related damages to Plaintiffs’ business and property.  Plaintiffs file suit in State Court and Defendants removed the case to Federal Court.  Plaintiffs allege that Acceptance did not provide coverage sufficient to complete necessary repairs to the property.  Saucier is the adjuster assigned to the claim.  Acceptance asserts that Saucier was improperly joined in the lawsuit and thus, his joinder should be disregarded for purposes of diversity.  Plaintiff asserts that he has sufficiently alleged causes of action against Saucier to maintain the claim against him.

To establish fraud in joining a non-diverse defendant, the removing party must establish the plaintiffs’ inability to establish a cause of action against the non-diverse party in state court.  The Court must decide whether there is a reasonable basis for predicting that Plaintiffs might be able to establish liability on the pleaded claims in state court.