Dallas Fort Worth Insurance Lawyer Blog

Insurance Claims As Breach Of Contract Claims

June 22, 2013 | Mark S. Humphreys

Fort Worth insurance attorneys will tell you that an insurance policy is a contract. A 1992, Dallas Court of Appeals case gives a good example of how the Courts deal with this concept. The style of the case is, St Paul Insurance Company v. Rakkar.

This case deals with many insurance issues but here are the issues as it relates to contracts:

Rakkar owned a house in Jewett, Texas. On August 27, 1988, after the tenants who had been living in the house vacated the property, Rakkar travelled the four hours from his home in Whitesboro, Texas, to Jewett to inspect the property with the real estate agent who helped him manage the property. Rakkar planned to grill some hot dogs for his dinner, spend the night in the house, and return to Whitesboro the next day. With this plan in mind, Rakkar bought hot dogs, a small hibachi-type grill, lighter fluid, and obtained some charcoal. He also bought a bottle of drinking water because the water at the house had been shut off. When he got to the house, he opened the windows to air out the house and started the air conditioner. Because the grass around the house was tall and dry, he decided to light the grill in the kitchen and then carry it onto the patio after clearing a space for the grill on the patio. Rakkar set the grill on the kitchen floor. After lighting the grill, he had begun to work on the ceiling fan when his real estate agent arrived. She told Rakkar that she smelled something “hot,” and Rakkar showed her the hibachi grill sitting on the kitchen floor. She told him that he should move it outside because the heat from the grill could burn the linoleum flooring. After declining Rakkar’s invitation to join him for a hot dog, the real estate agent left. Rakkar decided to take the grill onto the patio. When he bent over the coals, he passed out. When he awoke five or six minutes later, the grill was overturned near the base of the cabinets, the coals were scattered over the kitchen floor, and the cabinets were on fire. Rakkar ran to the sink, but no water came out. Rakkar then ran to his neighbors to get assistance, but they were not at home. He then drove the half mile to the marina and called the fire department, which was fifteen to twenty miles away. By the time the fire truck arrived, the house was completely engulfed in flames. T he house burned to the ground.

Insurance Is A Contract

June 20, 2013 | Mark S. Humphreys

Fort Worth insurance lawyers will tell you that insurance policies are contracts. As such the rules regarding insurance policies are the same rules governing contracts. This was confirmed in the 1994, Texas Supreme Court case, Hernandez v. Gulf Group Lloyds.

A person seeking to recover on an insurance policy must prove the policy was in force at the time of the loss. Arguments by an insurance company that the policy had lapsed is a common reason given for it’s refusal to pay a claim.

Also, when someone sues under a policy of insurance it is important to bear in mind that the person has to prove the existence of the insurance policy. An experienced insurance attorney is always going to ask for a certified copy of the insurance policy at issue at the beginning of a lawsuit.

When Does Uninsured / Underinsured Coverage Kick-In?

June 18, 2013 | Mark S. Humphreys

Dallas insurance attorneys need to know when uninsured / underinsured coverage is available as a benefit.

The Texas Supreme Court case United States Fidelity and Guarantee Company v. Goudeau, which is an opinion issued in 2008, is a good reference.

Here are some relevant points of the case.

Federal Court – Trying To Stay Out

June 16, 2013 | Mark S. Humphreys

Dallas insurance lawyers would want to be aware of this recent case out of the United States Southern District Court, McAllen Division. The style is Samuel Gacia, et al, v. Geovera Specialty Insurance Company.

Insurance companies prefer to have cases in Federal Court. Attorneys suing insurance companies prefer to be in State Court. The reasons will not be discussed here. But this case discusses how a Federal Court looks at which Court a case should be in.

Here is some of the relevant information:

What Happens When The Insured Does Not Submit To An Examination Under Oath?

June 15, 2013 | Mark S. Humphreys

Fort Worth insurance lawyers should know about insurance policy provisions that require an examination under oath (EUO). The Houston Court of Appeals [14th Dist.] issued an opinion in May 2013, that helps to understand the process. The style of the case is, Arman A. Shafighi v. Texas Farmers Insurance Company.

Here is some of the relevant information:

Shafighi sued Farmers when it denied his claim for fire damage to his house. The trial court granted summary judgment to Farmers, concluding that Shafighi could not recover because he failed to participate in a sworn examination as part of Farmers’ investigation. Because the insurance policy at issue permits Farmers to abate the case until Shafighi complies with the relevant policy provisions, but does not entitle it to summary judgment under these circumstances, this appeals Court reversed and remanded.

Life Insurance – Who Gets The Money?

June 13, 2013 | Mark S. Humphreys

Fort Worth life insurance attorneys will understand why people need an attorney’s help in these disputes after reading this case. The case is styled, Cheryl M. Patterson and Aundrell Patterson v. American General Life Insurance Company. The opinion was issued in May 2013, by the Houston Court of Appeals, 1st Dist.

Here is the relevant information.

The operative facts of this case are largely undisputed. On May 3, 2007, American General issued a life insurance policy for Lonnie J. Patterson, Jr. The policy initially named Lonnie, Jr.’s father, Lonnie J. Patterson, Sr., the primary beneficiary and his mother, Cheryl M. Patterson, the contingent beneficiary. American General subsequently received a change of beneficiary for the policy, naming Lonnie, Jr.’s mother, Cheryl, and, his sister, Aundrell Patterson, as primary co-beneficiaries. American General acknowledged and confirmed this change in a November 2007 letter to Lonnie, Jr.

Endorsements On An Insurance Policy

June 11, 2013 | Mark S. Humphreys

Dallas insurance law attorneys need to know the significance of endorsements on an insurance policy. A recent United States District Court case in the Northern District of Texas is worth knowing about. The case is styled, Bituminous Casualty Corporation v. Travelers Indemnity Company, et al.

Here is some relevant information on the case.

Bituminous Travelers and Frontier seeking a declaratory judgment that Travelers’ insurance policy with Big D Concrete, Inc. covers a tractor and trailer that Big D leased to Frontier, Bituminous’ insured. The tractor and trailer were involved in an accident that gave rise to an underlying state court lawsuit. The Policy provides liability coverage for “[a]ny ‘Auto.’ ” D. At the time of the accident, Big D owned the tractor and trailer at issue, but it had leased them to Frontier. The lease included four other tractors and trailers, and it required that Frontier keep the equipment “insured against all risks of loss or damage from every cause whatsoever,” and to bear the entire risk of loss or damage. After Big D executed the lease, it submitted to Travelers through an agent a policy change request asking that Travelers delete these five tractors and five trailers from the Policy. In response, Travelers issued a change endorsement that amended the Policy to delete the five tractors and five trailers from commercial automobile coverage. The Endorsement also specified that “LIABILITY COVERAGE IS DELETED” for all ten vehicles.

Delay In Paying Claim

June 9, 2013 | Mark S. Humphreys

Mineral Wells attorneys who handle insurance claims need to be aware of the laws regarding the payment of insurance claims.

The Texas Insurance Code, Sections 542.051 – 542.061 is known as the Prompt Payment of Claims Act. These sections detail the time limits insurance companies have for responding to and paying a claim. The time limits will vary with the type of claim and the circumstances of the claim. The rules can be confusing. But what is important is that the Prompt Payment of Claims Act also sets the penalties for an insurance company failing to follow the rules. These penalties include not only having to pay the claim but to pay the court costs and attorney fees involved in getting the claim paid. As extra punishment for failing to follow the rules the insurance company is liable of an additional penalty of 18% owed on the claim. This 18% would be in addition to the 5% prejudgment interest that accrues on a judgment.

The United States District Court for the Southern District of Texas, Galveston Division issued a report and recommendation in April of 2013, dealing with the Prompt Payment of Claims Act. The style of the case is, Pointewest Center, LLC. v. National Surety Company and here is some of the relevant information.

Misrepresentations By Insurance Agents And Companies

June 8, 2013 | Mark S. Humphreys

Dallas insurance lawyers will find that misrepresentations by insurance agents and companies are a big area of litigation in insurance cases.

One of the most common reasons for an insurance dispute is the complaint that someone misrepresented something. Sometimes it is the company saying the insured made misrepresentations in the insurance application and other times it the insured saying the insurance agent or the company made a misrepresentation. After a claim is made, the insured may feel that the coverage accepted by the insurance company is less that the coverage promised at the time of the sale. Depending on the facts of the case, a representation by the insurance company or its agent may lead to liability for breach of contract, unfair insurance practices, deceptive trade practices, negligence or fraud.

There is a Houston [14th] Court of Appeals case decided in 2003, which says an insurance company can sue one of its own agents for misrepresentation, if the agents conduct results in liability for the insurance company. This happens quite frequently.

Bad Faith Insurance

June 6, 2013 | Mark S. Humphreys

Parker County lawyers need to have a basic understanding of how to see bad faith insurance when it happens.

To understand the different ways disputes can arise, it is helpful to consider the sequence of events that are likely to occur. To do this, try to divide the purchase of insurance into the initial sale of the policy by an agent and the the subsequent handling of a claim when one is made. Here is a further breakdown.

A) The sale of the policy. To begin with, the consumer and insurance company and insurance company agent must communicate to establish an insurance contract relationship. Disputes may arise over what was asked for by the person trying to purchase insurance, who was represented by the agent, or the timeliness of the insurance company or agent in providing coverage. Issues may also arise about the honesty of the applicant or the agent in discussing information requested by the insurance company.