Dallas Fort Worth Insurance Lawyer Blog

Insurance Fraud Laws In Texas

December 5, 2009 | Mark S. Humphreys

A resident of Grand Prairie recently caught his insurance agent in Dallas committing fraud. The agent was taking the cash payments for the premiums from the resident and hand writing a receipt. Sounds okay so far. Next, the agent was pocketing the money rather than forwarding the payment to the insurance company. This could have happened in Arlington, Fort Worth, Weatherford, or anywhere else in Texas.

The agent would have continued to have got away with this except that the resident had an accident and got sued and when he turned the lawsuit papers over to the insurance company and was denied coverage the resident went to an experienced Insurance Law Attorney. A subsequent investigation revealed what was happening and a lawsuit is currently going forward against the agent.

Most of the time when people think of insurance fraud, they think in terms of someone staging a theft, an accident, or committing arson to recover monies from an insurance policy. This type of insurance fraud is defined and talked about in the Texas Penal Code, Chapter 35. Section 35.02, describes some of what constitutes an offense and also describes the penalty. The range of punishment is from a Class C misdemeanor, which is a ticket offense, all the way to a Felony of the First Degree, which is punishable by up to life in prison. The monetary cost includes fines up to $10,000, court costs, and restitution.

Duty To Cooperate With Your Insurance Company In Texas

November 30, 2009 | Mark S. Humphreys

The general rule in Texas is that a policy holder has a duty to cooperate with his insurance company when the insurance company is investigating a claim.

Whether your house in Arlington burns down or you have a vehicle wreck in Grand Prairie the answer is about the same. Ditto for a life insurance claim made in Weatherford or a health insurance claim made in Fort Worth. Every insurance policy is going to place upon you a duty to cooperate with the insurance companies investigation of the claim.

Generally speaking you would have a duty to report the claim as soon as is possible. You would be asked and expected to make a statement to the insurance company. Often times you are going to be asked to fill out reports and other paperwork. You may have to get estimates or appraisals. If the loss being claimed is for physical injury, then an independent medical exam performed by a Doctor of the insurance companies choosing may be necessary.

Texas Deceptive Trade Practices Act And The Insurance Code

November 28, 2009 | Mark S. Humphreys

A resident of Grand Prairie, Arlington, Fort Worth, Weatherford, or any other area in Texas can sue an insurance company for violations of the Texas Insurance Code under the Texas Deceptive Trade Practices Act. This is important because both of these areas of the law allow for favorable theories of recovery to the consumer who is wronged when dealing with an insurance company.

Texas Insurance Code, Section 541.151, specifically says that a person who sustains actual damages may bring an action against another for damages caused by the other person engaging in an act or practice, “specificaly enumerated in Section 17.46(b), Business & Commerce Code, as an unlawful deceptive trade practice …” The Business & Commerce Code is where the Texas Deceptive Trade Practices Act is located. The whole purpose of the DTPA is to prevent companies from doing wrongs to consumers.

In business and legal circles, Section 17.46(b) is referred to as the “laundry list” of things companies are prohibited from doing. Violations of this laundry list can result in actions by the States Attorney General plus numerous private causes of action by the consumer.

What Does “Manifest” Mean In A Texas Health Insurance Policy?

November 27, 2009 | Mark S. Humphreys

An interesting case has recently been reported in The Boston Globe. It is a lawsuit about whether or not the State of Massachusetts should be providing insurance coverage for adjunct professors in the public higher education system.

Rather than getting into a discussion about the insurance that a business or governmental agency should be providing its employees let us talk about a specific issue that comes up in health insurance situations. Most of the time when someone buys health insurance they are going to be required to fill out an application which asks questions about the applicants past and present medical conditions.

Almost every health insurance policy is going to have conditions that are not covered by the insurance. The conditions will be pre-existing conditions and also conditions that “manifiest” themselves within 30 days of the inception of the policy.

Does My Texas Insurance Company Have To Defend Me If I Get Sued?

November 25, 2009 | Mark S. Humphreys

An Appeals Court in San Antonio, Texas, has recently handed down a decison that discusses the above question. The case is, Lancer Insurance Company v. Oscar Perez, et al, and was decided on November 4, 2009.

The Lancer case involved members of a high school band going on an overnight field trip. The driver of a bus transporting the band was infected with active turberculosis. This disease was discovered by the passengers and subsequent tests proved positive for some of the band members. The bus driver and bus company were sued for negligently exposing the band members to the disease.

Upon being sued, the bus company made a written demand to Lancer to defend the lawsuit pursuant to the business automobile insurance policy Lancer had issued covering the bus. Lancer refused to defend and the case went to trial wherein the passengers were awarded $5.25 million in total damages.

Excluded Drivers In Texas Automobile Policies

November 24, 2009 | Mark S. Humphreys

Let’s say you are a Grand Prairie or Arlington resident. You purchased an auto policy from an agent in Fort Worth. The price quoted seemed way too high and you asked the agent if there was anything that could be done to get the premium lower. The agent says, “Yes, we can take your teenage son off the policy.” You say okay. The agent sells you a policy that excludes coverage if your teenage son is driving the car.

You can guess what happens next – the son drives the car and gets involved in a wreck. Now what? Numerous lawsuits have been filed in these situations and outcomes will sometimes be different depending on the facts of the accident and more importantly, the wording in the insurance policy that excludes the son.

Courts will look closely at the wording in the policy at issue but as a general rule, these exclusions are found by the Courts to be valid. It has been held that public policy dictates the allowance of such exclusions to enable insured motorists with children having bad driving records to secure insurance they can afford, rather than being relegated to securing coverage from an assigned risk pool at a much higher cost. This issue was discussed at length in the case, Wright v. Rodney D. Young Ins. Agcy. Wright was a 1995, Fort Worth Court of Appeals case.

Texas Windstorm Insurance Association Crying “Help”

November 22, 2009 | Mark S. Humphreys

The Texas Windstorm Insurance Association, has found itself in an unfortunate position. The position is a creation of their own actions. Those actions were actions whereby they refused to pay proper claims to policyholders who suffered damages because of the hurricanes, Ike, Dolly, and Rita.

TWIA is crying “help” because they are afraid they are going to be punished for not properly paying claims to their policyholders. They are asking that they be immune from paying penalties, policyholder attorneys’ fees, and other expenses coming out of litigation that resulted from their conduct.

The windstorm association is a state-created insurer and is claiming that because they are an instrument of government that they should have immunity. Lawyers for the policyholders say that TWIA is effectively a private company, and that immunity would effect the over 900 lawsuits pending against TWIA.

Jury Says No To Punitive Damages

November 21, 2009 | Mark S. Humphreys

The previous post to this blog talked about penalties Texas insurance companies face when they do not properly handle a claim that is presented to them by one of their insureds. Recently an insurance case was tried in Federal Court in Mississippi. The case arose out of a lose suffered by Reginald Bossier for damages resulting from Hurricane Katrina. In the case, the jury declined to award any amount of monies for punitive damages.

The insurance company being sued was State Farm. Notice also, that this case was in Federal Court. Earlier posts on this blog have pointed out that the insurance company would always prefer to be in Federal Court, rather than State Court. In this case, the jury compensated Bossier $52,300 for damages to an outbuilding destroyed by Hurricane Katrina. However, the jury refused to punish State Farm for any amount of punitive damages. State Farm had paid for some home damage resulting from the high winds but was refusing to pay for damages caused by water.

The attorney for Bossier had asked the jury to award Bossier $2 million to punish State Farm. That anything less than $2 million would not get State Farm’s attention. The attorney also pointed out that “State Farm would rather pay its lawyers than its insureds.” She also told the jury that if State Farm were not punished then they would continue to deny claims.

Penalties For Insurance Companies In Texas

November 18, 2009 | Mark S. Humphreys

Let’s say your house in Dallas burns down and the insurance company wrongfully denies your claim. Or your boat in Weatherford sinks in the lake and your insurance company tries to tell you they are not going to pay because of a late payment on your insurance policy. How about you are driving your car in Fort Worth and are involved in a wreck and your insurance company denies coverage due to the car not being properly listed on the policy. Another example, your neighbors wife, in Grand Prairie, dies of an illness she has had and when the husband makes a claim for life insurance benefits he is denied because the insurance company says they committed a fraud in the application for coverage.

Okay, now lets say you can prove the insurance company was wrong in each of the above situations. What next? Do they just pay the benefits and go away? What about the extra heart ache you went through? What about the ten month delay in paying you the benefits you were entitled to? What about legal expenses? Can the insurance company just intentionally do you wrong and get away with it, by just paying what they should have paid in the first place?

Here are some answers. First, get to an experienced Insurance Law Attorney to help you. Then if you are so inclined, go to the Texas Department of Insurance web-site and read a few of the rules the insurance companies have to follow.

Good Health Requirement For Life Insurance Policy

November 17, 2009 | Mark S. Humphreys

A person who buys a life insurance policy in Dallas, Texas, or in Arlington, Grand Prairie, Fort Worth or out in Weatherford in Parker County should have the same concern as everyone else when they purchase the policy. Is this policy going to pay benefits to the benficiary named in the policy? After all, that is the only reason it is being purchased.

A Federal Court case decided in 2007, gives good reason for looking over the policy and reading it well before purchasing it. The case, Assurity Life Insurance Company v. Grogan, was presented with the following policy condition: The policy coverage did not go into effect until the “first full premium was paid during the Proposed Insured’s lifetime and continued good health.”

Soon after purchashing the policy, the insured had a biopsy performed on a lump on his neck and was diagnosed with Hodgkin’s disease. He died a few months later from complications.