Interpreting An Insurance Policy

Insurance Policy Conditions

February 13, 2011 | Mark S. Humphreys

For someone in Grand Prairie, Arlington, Dallas, Fort Worth, Irving, Hurst, Euless, Bedford, Garland, Mesquite, Carrollton, Richardson, or anywhere else in Texas, it is sometimes difficult to understand the conditions that are written in a policy and how those conditions apply to a claim the insured person is making to the insurance company.

An insurance contract may impose conditions on the insured. For example, almost all policies are going to require that the insured give notice of the claim as soon as is practicable when a claim arises. The insured also has a duty to to co-operate with the insurance company in its investigation of the claim. Most policies require that the insured file a formal proof of loss, if the insurance company requests it. When the insured commits a material breach of the insurance contract, the insurance company is excused from its obligation under the insurance contract. In this regard, it then becomes important to understand what a “material” breach is.

In trying to understand what a “material” breach is, the case, Rueben and Anita Hernandez v. Gulf Group Lloyds, decided in 1994, by the Texas Supreme Court is a good case to look at for guidance.

Insurance Policy Assignment

February 10, 2011 | Mark S. Humphreys

Can someone in Burleson, Benbrook, Crowley, Cleburne, Keene, Joshua, Arlington, Pantego, Mansfield, Fort Worth, Granbury, or any other place in Texas assign the benefits of their insurance policy to someone else? The answer is, it depends.

Like other contract rights, the right to insurance proceeds can be assigned, giving the assignee the right to recover under the policy. This was stated in the 1968, Texas Supreme Court case, McAllen State Bank v. Texas Bank & Trust Company. However, a policy may contain a non-assignment clause, which will be enforced.

An example of this can be found in the case styled, Texas Farmers Insurance Company v. Sally Gerdes, By and Through Her Assignee, Griffin Chiropractice Clinic. This is a case decided in 1994, by the Fort Worth Court of Appeals.

Claims Made Policies

February 5, 2011 | Mark S. Humphreys

Most people in Grand Prairie, Arlington, Dallas, Fort Worth, Mansfield, Cedar Hill, De Soto, Duncanville, Lancaster, Weatherford, Aledo, Azle, Hudson Oaks, or any other place in Texas would not know the difference between a “claims-made” insurance policy and any other type of insurance policy.

The Texas Supreme Court decided a case in March of 2009, that discussed one of the distinctions in a “claims-made” policy. The case is styled, Prodigy Communications Corp. v. Agricultural Excess & Surplus Insurance Company, et al.

This case is a declaratory judgment action. Agricultural Excess & Surplus Insurance Company (AESIC) brought this action asking the court to declare that they have no obligations in this case to defend or indemnify in the lawsuit brought against Prodigy Communications Corp (Prodigy).

Interpreting A Policy

February 3, 2011 | Mark S. Humphreys

Someone in Arlington, Mansfield, Bedford, Benbrook, Burleson, Hurst, Euless, Keene, Grand Prairie, Dallas, Fort Worth, Pantego, or anywhere else in this state would go crazy trying to understand how to correctly interpret an insurance policy. They have to do two things. One, talk it over in detail with the insurance agent at the time of purchase. Two, seek the advice of an experienced Insurance Law Attorney.

An example of the first sentence above is found in the case styled, VRV Development L.P., formerly known as VRV Development, Inc.; Marken Management GP L.L.C.; Kenny Marchant v. Mid-Continent Casualty Company. This case was decided on January 7, 2011, by the United States Court of Appeals for the Fifth Circuit.

In this matter, the plaintiffs above were sued by Goodman Family of Builders, L.P. successor in interest, K. Hovnanian Homes – DFW, LLC. and the City of Dallas. The lawsuit was alleging damage to lots developed by the plaintiffs. The alleged damage was to retaining walls and a public utility easement. The facts are a little confusing and the relevent time period, which begins in May 2004 and goes through sometime in 2007, is also at issue.

Interpreting Insurance Policies

February 1, 2011 | Mark S. Humphreys

Anyone in Grand Prairie, Arlington, Mansfield, Cedar Hill, Duncanville, De Soto, Lancaster, Hurst, Euless, Bedford, Dallas, Fort Worth, or anywhere else in Texas who reads an insurance policy is going to get through with the reading and with their blurred eyes, wonder what they just read. Here is a case where the interpretation of a policy exclusion was at issue.

The case is styled, RLI Insurance Company v. Sylvia Gonzalez; Alma Alicia Gonzalez, Individually and as Representative of the Estate of Hector Gonzalez and as Next Friend of I R G G, a Minor; Hector Gonzalez, Jr. This is a case where the opinion was issued on January 7, 2011, by the United States Court of Appeals for the Fifth Circuit.

This is a lawsuit between family members of a deceased sandblaster and RLI Insurance Company (RLI). The court ultimately ruled in favor of RLI based on a policy exclusion.

Home Owners Policy

January 25, 2011 | Mark S. Humphreys

Not many people in Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Cedar Hill, Duncanville, De Soto, Lancaster, or elsewhere in North Texas have to worry about an issue that some gulf coast residents have to be concerned about. That is the drywall cases that have resulted from hurricane Katrina and hurricane Ike.

The Miami Herald published an article on January 3, 2011. The article is titled, Drywall Insurance Coverage Still Possible.” It was writen by Duane Marseller. Much of the article is quoted here.

The drywall cases are cases that resulted after hurricanes where homes were damaged. When this occurred there were a large number of homes that were repaired using a drywall product that was manufactured in China. It turned out that the drywall product was defective.

Theories Of Recovery In Insurance Cases

January 23, 2011 | Mark S. Humphreys

Weatherford, Parker County, Aledo, Azle, Mineral Wells, and other residents through out Texas would wonder what are the different ways of recovering losses that result from an insurance company or insurance company agent doing something wrong in the sale of an insurance policy.

The Texas Department of Insurance has a web-site that provides some information about insurance companies and insurance agents. There is also information at this site about insurance adjusters.

The Texas Supreme Court hears and issues opinions about situations that have happened across the state dealing with insurance related issues. Plus the lower appeals courts and the local courts have to hear and decide on insurance related cases on a fairly regular basis.

Total Disability Coverage

January 16, 2011 | Mark S. Humphreys

Disability income insurance coverage for someone in Grand Prairie, Dallas, Fort Worth, Arlington, Bedford, Euless, Hurst, Lake Worth, Aledo, or anywhere else in Texas is usually expensive. In addition to being expensive, the policy language is sometimes difficult to interpret.

Disability income policies typically specify an amount that will be paid in the event of a disability (as defined in the policy) and a maximum length of a disability (as defined in the policy) and a maximum lenght of time for which such benefits will be paid (e.g., “$200 per month for up to 60 months”).

A beginning place to look to see how Texas regulates disability income insurance policies is the Texas Administrative Code. Title 28, Part 1, Chapter 3, Subchapter S, Rule Section 3.3005 deals with the definitions in policies. It reads:

Exclusions In Commercial Policies

December 30, 2010 | Mark S. Humphreys

Business persons in Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Burleson, Cleburne, Weatherford, Mesquite, Garland, Richardson, or any other location in Texas will usually have a commercial insurance policy covering their business. The policies they have are usually referred to as commercial general liability (CGL) policies. The following case looks at a problem one insured had with coverage and serves as an example of why a business person should try to understand what the coverages and exclusions are in any policy of insurance that money is spent on.

The Court of Appeals, Dallas, issued an opinion on November 22, 2010, styled, Frito-Lay, Inc. v. Trinity Universal Company, Trinity Universal Insurance Companies, Trinity Lloyd’s Insurance Company, and Unitrin Property and Casualty Insurance Group. In this case the court eventually ruled in favor of the various insurance companies and against Frito-Lay based on exclusions in the insurance policy.

Here is some background. Adampac, a food packaging company, obtained a CGL policy from Lloyd’s and a commercial excess policy from Universal. During the policy period, Frito-Lay hired Adampac to repackage a Frito-Lay food product to be used in consumer testing. During the repackaging process, the Frito Lay product became contaminated or adulterated with a foreign substance from another product Adampac was packaging for another customer. The foreign substance was a wintergreen flavoring used in a non-tobacco product similar to snuff. Because of the contamination, the Frito-Lay product could not be used for consumer testing.

Life Insurance – Misrepresentation In Application

December 23, 2010 | Mark S. Humphreys

Anybody with life insurance in Dallas, Fort Worth, Grand Praire, Arlington, Weatherford, Garland, Mesquite, Mansfield, or anywhere else in Texas who has life insurance would have had to fill out an application for that insurance. So what happens if the life insurance company denies benefits under that policy and cites the reason as there being a misrepresentation in the application for the policy? Continue reading to get some guidance as to what might happen.

For a life insurance company to establish misrepresentation by the insured as legally sufficient grounds for denying benefits, the life insurance company must prove five elements in any lawsuit brought trying to get the benefits paid to the benficiary. Here are those five elements:

1) the making of a misrepresentation;