Insurance Company Liability

Dallas insurance attorneys and those in Duncanville, Carrollton, Farmers Branch, Garland, and other places in Dallas County need to know the laws regarding the liability of an insurance company.
The law in Texas is very clear, as the contracting party, the insurance company may be liable based on the contract with their insurance customer.
An insurance company may also be statutorily liable. For example, Texas Insurance Code, Section 541.151, tells us;
“A person who sustains actual damages may bring an action against another person for those damages caused by the other person engaging in an act or practice:
(1) defined by Subchapter B to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance; or (2) specifically enumerated in Section 17.46(b), Business & Commerce Code, as an unlawful deceptive trade practice if the person bringing the action shows that the person relied on the act or practice to the person’s detriment.
The term “person” is defined to include various insuring entities. This is found in Texas Insurance Code, Section 541.002(2). It says;
(2) “Person” means an individual, corporation, association, partnership, reciprocal or interinsurance exchange, Lloyd’s plan, fraternal benefit society, or other legal entity engaged in the business of insurance, including an agent, broker, adjuster, or life and health insurance counselor.
The Texas prompt payment of claims statute applies solely to insurance companies. Section 542.002 lists twenty-one types of insurance companies and entities to which this statute applies. Section 542.053 lists the exceptions to this statute.
Likewise, the prohibitions on unfair discrimination specifically include insurance companies. Section 544.001, lists sixteen types of insurance companies and entities to which it applies. Section 544.051, lists six types of insurance companies and entities to which it applies. Section 544.101, lists eleven types of insurance companies and entities to which it applies. Section 544.152, lists nine types of insurance companies and entities to which it applies.
What is relevant to knowing the above is being aware that companies and entities that most people think about and relate to insurance, such as, State Farm, Farmers, Liberty Mutual, or other big and recognized companies are not the only types of insurance companies that are liable for their wrongs under Texas law. There are many entities and many types of transactions that people enter into that they do not necessarily recognize as insurance type of companies or insurance products and services.
Most insurance attorneys are going to be able to recognize an insurance product or service and recognize the company or entity engaged in providing the product or service and know that the Texas laws regulating insurance apply.

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