Insurance Agent Representations

Insurance Law Attorneys and Lawyers in Fort Worth, Dallas, Weatherford, and other places in Texas know the claims that can be made against an insurance company that treats one of its insureds in an unlawful manner. These same lawyers should also know the claims to make against insurance agents that make misrepresentations to their insureds when selling a policy of insurance.
The question today is: Can an agent be held liable for something he does not say? The answer is: It depends. Here is a case that gives some guidance.
The San Antonio Court of Appeals issued an opinion in 1998, in the case styled, Moore v. Whitney-Vaky Agency. Here are some facts:
Moore was the owner of an apartment complex. An agent for Whitney-Vaky asked whether he could handle the insurance for the complex. Moore testified in deposition that he did not recall discussing any types of coverage with the agent, that he never asked the agent to tell him what the policy covered, that he did not discuss the contents of the policy with the agent, that he never ask the agent to tell him what the policy covered and that he could not recall any conversations with the agent about the coverages he wanted prior to obtaining the policy. However, Moore stated that he believed that all liabilities were covered under the policy and argued that he should have been informed of the provisions of the policy at the time he purchased it.
Subsequently, Moore was sued for wrongful termination by a former employee. Moore believed the claim was covered under his liability policy and made a claim. The claim was denied. Moore then retained counsel and settled the suit. After settlement, Moore sued the insurer and Whitney-Vaky, the agent. The insurer was non-suited. Whitney-Vaky then moved for summary judgment. The parties agreed that the only issue to be determined by the trial court was whether Whitney-Vaky had a duty to advise Moore of the coverage provided under the policy. The trial court granted the motion for summary judgment and Moore appealed.
This appeals court affirmed the trial court ruling and stated that an insurance agent in Texas owes a common-law duty to a client for whom he undertakes to procure insurance: (1) to use reasonable diligence in attempting to place the requested insurance; and (2) to inform the client promptly if unable to do so. Neither of these duties was breached here because Moore admitted that he never requested a specific type of coverage, and Whitney-Vaky did provide a policy of insurance in accordance with its understanding of Moore’s expectations. Moore also was never led to wrongly believe that his policy covered risks that were in fact excluded because Moore admitted that he never discussed the contents of the policy with the agent, and that the agent never said anything to give him the impression that the policy would cover all suits against him. There is also no evidence of a special relationship that may give rise to a duty to disclose coverage limitations, even though Moore continued to use Whitney-Vaky to renew his policy every year. Since there is no evidence of some specific misrepresentation by Whitney-Vaky or the agent about the insurance, Moore’s mistaken belief about the scope of coverage is not actionable under either the DTPA or the Texas Insurance Code.