Dallas Fort Worth Insurance Lawyer Blog

Grounds For Rescission By The Insured

January 27, 2013 | Mark S. Humphreys

Mineral Wells attorneys and those in Graford, Weatherford, Cool, Millsap, Garner, and other places in Parker and Palo Pinto Counties need to understand how insurance policies work and are interpreted.

There is a Texas Supreme Court opinion issued in 1999, that is worth reading. The case is styled Urrutia v. Decker.

This case required the Court to determine the validity of liability insurance a truck leasing company provided to its customer as part of a rental transaction. Based on representations that $20,000 was all the insurance available, the claimant settled his bodily injury claim for that amount. When he later discovered the nature of the leasing company’s insurance arrangement, he sued the leasing company and its customer, seeking to set aside the previous settlement. The claimant urged that the settlement was obtained by fraud or resulted from the parties’ mutual mistake about the insurance available to pay his claims.

Insurance Rulings In Other States

January 26, 2013 | Mark S. Humphreys

Grand Prairie insurance lawyers and those in Garland, Mesquite, Richardson and other places in Dallas County need to know the insurance laws in Texas. But they also need to know what is going on in other states.

The Detroit Free Press published an article on January 2, 2013, that an insurance attorney should find interesting. The article tells us that a judge has ruled that the Michigan Catastrophic Claims Association is subject to the Freedom of Information Act and must disclose how it calculates the annual fee assessed to each Michigan vehicle under the state’s no-fault auto insurance system.

Ingham County Circuit Judge Clinton Canady III issued the ruling late last week in a lawsuit brought by the Coalition Protecting Auto No-Fault and the Brain Injury Association of Michigan.

Statutory Requirements For Policy Rescission

January 24, 2013 | Mark S. Humphreys

Dallas insurance attorneys and those in De Soto, Duncanville, Cedar Hill, and other parts of Dallas County need to know when or if an insurance company is properly voiding an insurance policy.

In addition to the common law standards, several statutory provisions regulate an insurance company’s ability to avoid coverage based on a misrepresentation by the insured. These are found in the Texas Insurance Code, (TIC) Chapter 705. The statute provides:

TIC, Section 705.003 – A provision stating that a misrepresentation in a proof of loss makes the policy void or voidable is of no effect and is not a defense, unless the misrepresentation was:

Representations In Insurance Application

January 22, 2013 | Mark S. Humphreys

Fort Worth insurance attorneys and those in Benbrook, Burleson, Lake Worth, and other parts of Tarrant County need to know the effect of the representations made in an insurance application.

There is an important distinction between statements by the insured that are considered to be representations and those considered to be conditions precedent. If the insured’s statement is considered a representation, a false statement alone will not let the insurance company avoid coverage. In contrast, if the insured’s statement is considered a condition precedent, then falsity alone will allow the insurance company to void coverage.

This representation-versus-warranty dichotomy is well developed under Texas law. If the statements are representations, then to avoid liability under the policy the insurance company must plead and prove:

Auto Liability Coverage

January 20, 2013 | Mark S. Humphreys

Fort Worth insurance lawyers and those in Arlington, Grapevine, North Richland Hills, and other places in Tarrant County know that auto liability insurance coverage is mandatory in the State of Texas if you are operating a motor vehicle.

What would be surprising to most in Texas is that some states do not have very effective enforcement mechanisms regarding the requirements of auto liability coverage. One of those states has been Alabama. That is now changing.

The Birmingham News published an article recently that tells us the word “mandatory,” when used in the context of a law, means “permitting no option; not to be disregarded or modified.”

Personal Injury Protection And Fraud

January 19, 2013 | Mark S. Humphreys

Dallas insurance lawyers and those in Garland, Mesquite, Richardson, Carrollton, and other places in Dallas County will end up seeing cases involves claims for Personal Injury Protection (PIP) benefits.

PIP is required coverage in Texas on automobile insurance. The Texas Insurance Code, Sections 1952.151 through 1952.161, discuss this coverage. All auto policies must provide PIP unless it is rejected in writing. Because of this coverage, there is a significant amount of Texas drivers who have this coverage.

The State of Florida also requires this coverage but it is noteworthy that their requirements are different than those in Texas. But as Florida goes on auto coverage, so has Texas in many cases.

Insurance Policy Rescission

January 17, 2013 | Mark S. Humphreys

Dallas insurance lawyers and those in Mesquite, Garland, Richardson, and other places in Dallas need to know the different ways insurance companies operate. One of those is rescinding a policy.

As a general principle, prior to a loss an insurance company has the right to rescind the policy procured through mutual mistake or fraud. This is old law from the Amarillo Court of Appeals in 1931.

An insurance company may rescind a policy based on the insured’s misrepresentation, if the insurance company pleads and proves the following elements:

Expiration Of Policy

January 15, 2013 | Mark S. Humphreys

Grand Prairie insurance attorneys and those in Irving, Duncanville, Arlington, and other places in Texas need to understand issues that can arise related to the expiration of an insurance policy.

A Texas Supreme Court opinion decided in 1985, said that an insurance agent who receives commissions from a customer’s payment of insurance policy premiums has a duty to reasonably attempt to keep the customer informed about his or her insurance policy expiration date upon receiving information regarding the expiration date intended for that customer. This case is styled, Kitching v. Zamora. An Amarillo Court of Appeals case held in 1992, that an agent had a duty to reasonably attempt to keep a mortgagee informed about the policy expiration date and non-renewal. This case was styled, Horn v. Hedgecoke Insurance Agency.

A 1990, Dallas Court of Appeals case says that when the insured “forfeited” (i.e., cancelled or non-renewed) an insurance policy and the insurance company has knowledge of the existence of facts that constitute forfeiture of the policy, an unequivocal act done after the forfeiture has occurred, that recognizes the continued viability of the policy or that is wholly inconsistent with a forfeiture, constitutes waiver of the forfeiture. This case is styled, Schachar v. Northern Assurance Company. To bring about a waiver of the forfeiture and reinstatement of the policy, three conditions must be met:

Non-renewal Of Insurance Policies

January 13, 2013 | Mark S. Humphreys

Weatherford attorneys need to know the different ways insurance law applies to the non-renewal of an insurance policy.

“Non-renewal” refers to termination of coverage at the end of the policy period.

It is important for a policy holder to understand that absent a contractual entitlement to renew a policy, an insured has no legal entitlement to renew an insurance policy. The insurance company possesses virtually unlimited discretion to renew or not renew the coverage. As long as the basis of the non-renewal is not statutorily prohibited, an insurance company can non-renew for any reason or no reason. When the insurance company does not renew coverage, it is usually because it has decided to discontinue the particular type of coverage at issue or to avoid further exposure to the particular risk.

Canceling Insurance Policy

January 12, 2013 | Mark S. Humphreys

Dallas attorneys need to know the different ways that insurance policies can be cancelled and who can cancel them.

Here are a few ways of cancellation a person needs to know about.

The 1967, opinion, Ford Motor Credit Company v. Commonwealth County Mutual Insurance Company, tells us that the insured may cancel an insurance policy by giving the precise notice required by the terms of the policy. This opinion was written by the Beaumont Court of Appeals.