Dallas Fort Worth Insurance Lawyer Blog

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.

Policy Cancellation And Bad Faith

January 10, 2013 | Mark S. Humphreys

Weatherford attorneys who do insurance cases have to be able to draw the distinction between a case where an insurance company has treated one of its insureds wrong and when it has not, in order to be able to discuss the case appropriately with the client.

Here are two examples for consideration.

The El Paso Court of Appeals issued an opinion in a 1996, that is helpful. The case is styled, Columbia Universal Life Insurance Company v. Miles.

Cancellation Of Policy And Bad Faith

January 8, 2013 | Mark S. Humphreys

Fort Worth attorneys need to be able to recognize bad faith insurance as it relates to cancellation of an insurance policy.

The Texas Insurance Code, Section 551.109, tells us that upon the request of the insured, the insurance company must provide a written statement of the reason for canceling a policy. The insurance company cannot just cancel your policy without telling you why. The statement they provide must fully explain any decision that adversely affects the policyholder by denying him or her coverage or continued coverage and must:

(1) state the precise incident, circumstance, or risk factor applicable to the policyholder that violate the guidelines;