Dallas Fort Worth Insurance Lawyer Blog

Insurance attorneys need to be able to discuss the Texas Guaranty Fund with their clients and how this fund works.

Four large insurance companies were declared insolvent in 2013, and as a result lawyers will have situations where a client has their insurance company become insolvent. The Texas Property and Casualty Insurance Guaranty Association (TPCIGA), was established in Chapter 462 of the Texas Insurance Code. Insurance companies do not file bankruptcy, they become insolvent. When an insurance company becomes insolvent or impaired, TPCIGA assumes the handling of the claims of the defunct insurance company. TPCIGA is a non-profit, unincorporated association of all Texas licensed property and casualty insurance companies. The Texas Legislature created the TPCIGA to provide protections to Texas insurance policyholders and claimants when an insurance company fails.

Chapter 462 states the TPCIGA must only pay “covered claims.” In general, a covered claim is an unpaid claim that arises out of a policy issued by an insolvent insurance company. The claim must be made by a Texas resident at the time of the insured event or must be a first-party claim for damage or property that is permanently located in Texas.

Insurance lawyers get calls from companies that have an assignment of benefits (AOB). This AOB is discussed in an article published by Claims Journal. It does a good job of discussing it and even though it talks about events in Florida, Texas has essentially the same laws and these AOB’s are being seen in Texas.

The problem for property insurers? No one is willing to take a firm position against the surge of AOB lawsuits, which are proliferating to the point where they are in danger of strangling insurers. The Courts are deferring to the Legislature but the Legislature is seemingly uninterested in making change.

The problems are endemic to Florida’s private market. The “carrier of last resort,” Citizens Property Insurance Corporation, is in the midst of a legislatively mandated, large-scale depopulation program, in which it has slashed its number of policies by about a third in the last several years. Citizens’ loss is a gain for several upstart carriers, but the AOB crisis is showing no signs of abetting and costs to defend these frivolous claims are becoming exorbitant.

Dallas insurance attorneys can tell lots of stories where the insurance company is ripping off and taking advantage of it’s insureds. The Insurance Journal recently published a couple of stories where an insured was involved in ripping off the insurance company. The punishment for getting caught can be grim.

An ex-worker at a Houston home decor store has pleaded guilty in a $2 million insurance scam in which customers intentionally fell and then filed claims.

The case involved more than two dozen false claims approved by Johnson and settlements topping $2 million. Prosecutors say the money was shared by Johnson, the fake victims and others in the scheme.

Irving insurance lawyers will run into situations where a renters insurance policy is at issue. The Dallas Court of Appeals issued an opinion in 2015, that should be read. It is styled, Chambers v. American Hallmark Insurance. This case is a good illustration why an experienced insurance law attorney needs to be involved.

This is an appeal by Chambers wherein the trial court granted summary judgment in favor of Hallmark.

Chambers purchased a renter’s insurance policy (the Policy) from Hallmark that went into effect on February 1, 2010. The insurance policy covered the Chambers premises. Chambers paid $252.00 in premiums on the Policy. On or about March 13, 2010, Chambers reported a loss of personal property from the residence identified on the Policy. Chambers submitted his claim for coverage with Hallmark. Hallmark claimed that the alleged theft was not a covered loss under the Policy and denied the claim.