Insurance And Breach Of Contract

Not paying on an insurance claim is in simple terms, a breach of contract.  The difference is that the contract breached is an insurance contract.  The Texas Insurance Code provides for damages beyond the simple breach of contract damages.  However, as is pointed out in the 2019, opinion from the Southern District of Texas, Victoria Division, you still have to prove the insurance contract was breached.   The style of the case is, Deborah Gonzalez v. Allstate Vehicle and Property Insurance Company.

Deborah’s claim arose out of damage suffered in Hurricane Harvey in August of 2017.  Deborah filed a claim against Allstate on August 28, 2017.  Allstate’s adjuster reported damages totaling $8,596.63.  After adjustments, Allstate paid Deborah $6,062.63.

Deborah did not agree with the amount paid and on August 13, 2018, Deborah and Allstate designated appraisers.  The appraisers evaluated the loss at $23,822.72.  After applying adjustments, Allstate paid the remainder of the claim.

Neither party contests the appraisers award.  However, Deborah asserts her Insurance Code violations survive the paying of the appraisers award.  Deborah says she was required to to sue because of Allstate’s underpayment and mishandling of her claim.  She also asserts the Prompt Pay Act was violated that required Allstate to pay within five business days of the final loss determination.

The Court ruled that Deborah’s claim for breach of contract does not survive Allstate’s motion for summary judgment.

It is undisputed the appraisal payment was made on December 27, 2018.  Whether the payment was received within five days, it was paid in full.  Assuming the payment was received after five days, the delay is of no consequence and does not constitute a breach of contract for which damages accrue according to this court.  Moreover, Deborah did not present evidence of any consequential damages.  Thus, the Court concluded there are no disputed fact issues concerning Allstate’s payment in compliance with the issuance of the policy and the Prompt Pay Act.

The Court went on to say there are no disputed facts that support damage claims under the DTPA or for bad faith.  There is no evidence of prejudice or that Allstate acted in bad faith that resulted on losses beyond the actual or contracted loss.

The Court granted summary judgment in favor of Allstate.