Dallas Fort Worth Insurance Lawyer Blog

Texas Insurance Policy Interpretation

October 20, 2009 | Mark S. Humphreys

The Fort Worth Court of Appeals recently decided a case wherein the Court had to apply Texas Insurance Laws and Texas Labor Code Laws in interpreting an insurance policy. The case was, Paul Robertson v. Home State County Mutual Insurance Company.

In this case, Robertson was an employee of a company called Redi-Mix. Robertson was injured while on the job for Redi-Mix. Redi-Mix had a policy of insurance with Home State. The policy in relevant part said that it provided coverage for “all sums an insured legally must pay as damages because of bodily injury or property damage to which the insurance applies”. The policy contained the following relevant exclusion to which coverage did not apply:

3. WORKERS COMPENSATION Any obligation for which the insured or the insured’s insurer may be held liable under any workers compensation, disability benefits or unemployment compensation law or any similar law.

Insurance Policies In Texas Are Contracts

October 19, 2009 | Mark S. Humphreys

The Texas Supreme Court stated in 2008 that insurance policies are contracts. This was stated in the case Ulico Casualty Company v. Allied Pilots Association. This is not new in Texas. In the Ulico case the court cited earlier Texas case law. The earlier case law was a Texas Supreme Court case styled Barnett v. Aetna Life Insurance Company and was decided in 1987.

What this means is that rights and obligations arising from an insurance policy, and the rules used to construe them, are those rules generally pertaining to contracts. One relevant concept here is that when a court construes or tries to interpret a contract and that contract can be read to mean more than one thing, then the interpretation is suppose to be in favor of the party who did not draft the contract. The burden is on the party drafting the contract to make it clear. Since an insurance company is always the party who drafts the insurance policy, the result is that if the reading of the policy can be interpreted in more than one way, the court is supppose to interpret it in such a way as to find coverage under the policy.

When an insurance contract covers certain risks, such as liability, but the policy contains exclusions or limitations of coverage, then when the insured customer makes a claim for coverage benefits, the insurance company must assert any applicable exclusion or limitation to avoid liability. This would be called an avoidance or in the Texas Rules of Civil Procedure it is called an affirmative defense. The burden of proof here then falls on the insurance company. This law is found in the Texas Insurance Code, Section 554.002.

A Recent Case Interpreting A Texas Insurance Policy

October 17, 2009 | Mark S. Humphreys

The Court of Appeals of Texas, Houston (1st Dist), recently handed down a decision that dealth with interpreting an insurance policy here in Texas. The case was, National Fire Insurance Company of Hartford, as Assignee of Kelvin Ray Gatlin v. State and County Mutual Fire Insurance Company. This case should have had the same result whether it was decided in Dallas, Fort Worth, or anywhere else in Texas.

This case arose out of an auto accident on December 23, 2000. A 1994 Ford Ranger driven by Gatlin ran a red light and damaged a truck owned by Rainbow Play Systems and insured by National Fire Insurance.

State and County denied coverage on the accident and National Fire filed a subrogation suit against Gatlin to recover the monies paid to Rainbow for damage to their truck. National took in excess of a $42,000 judgment against Gatlin. National then got Gatlin to assign to National the claim Gatlin had against State and County for State and County denying the claim. This assignment included claims for breach of contract, a Stowers action, and violations of the Insurance Code.

How To Make A Texas Insurance Company Pay More Than The Policy Limits

October 16, 2009 | Mark S. Humphreys

Texas insurance laws often times require that the insurance company issueing a policy, sell certain types of insurance with at least a minimal amount of coverage. The situation most people are familiar with is that related to automobile insurance coverage. In Texas, according to Texas Transportation Code, Section 601.072, a person cannot legally drive a car unless they have at least $25,000 worth of liabilty coverage. Texas Transportation Code, Section 643.101 requires a minimum amount for tow trucks, Section 643.1015 requires a minimum for school buses, and throughout the Texas Insurance Code and the Texas Transportation Code minimal required limits are spelled out depending on the vehicle driven.

Other types of insurance may have minimums or caps that are required. In other situations, there may not be a minimum that is required by law, rather there is a minimum that is purchased by the person seeking the insurance. These other types of insurance could be homeowners policies, commercial policies, medical malpractice policies, and many others.

What happens if a person’s losses exceed the minimum the insurance company is required to pay? There are three main options here. The first is to accept the amount the insurance company actually has to pay and walk away. The second is to accept what the insurance company actually has to pay and then pursue the individual or company who is insured for the differerence still owing. This is usually (not always) futile in that the individual or company does not have any assets worth seizing to satisfy a judgment beyond what the insurance company pays. The third is one where you would be required to have an experienced Insurance Law Attorney.

Texas Laws On Health Insurance And Billing By Health Care Provider

October 15, 2009 | Mark S. Humphreys

Did you know that there is a law in Texas which requires a health care service provider to bill the patient or other responsible person for services, not later than the first day of the 11th month after the date the services are provided. This law is found in the Texas Civil Practices & Remedies Code, Section 146.002.

Whether a patient receives care at a hospital or clinic in Dallas, Texas, or in Arlington, Grand Prairie, Weatherford, or anywhere else in Texas, the health care service provider is required to bill the patient or the issuer of health benefits plan for services within the time frame set out above. An exception would be the unlikely event that the contract between the health care provider service provider and the health care insurer provide a longer time to submit the bill for services. It is an unlikely for this exception to exist because from a practicle standpoint, no health care service provider is going to sign a contract requiring them to wait longer than 11 months before getting paid.

If the health care service provider is required to directly bill the third party payor who is operating under State or Federal law, including Medicare and Medicaid, the requirement is the same as stated above.

Subrogation Issues In Texas Insurance Law

October 14, 2009 | Mark S. Humphreys

Whether you live in Dallas, Fort Worth, Arlington, Grand Prairie, or any other metroplex city, or in a smaller town such as Weatherford, Granbury, Cleburne, or Azle here is something that happens just about every day. An accident occurs because of someone elses negligent actions. Someone is injured and gets medical treatment. The medical treatment is paid for by the injured persons’ health insurance, such as Blue Cross Blue Shield, Humana, Prudential, or any number of other health insurance companies. Maybe the medical care is paid for by the injured persons’ own auto insurance company through the personal injury protection (PIP) benefits or med-pay benefits. Most property insurance like homeowners policys and commercial policys have some sort of med-pay that pays for injuries.

In most these cases, someone else, or someone else’s insurance company is ultimately responsible for the injury that was incurred. The medical benefit that was used to pay bills is seldom going to pay all the bills. The injured person still has co-pays and deductibles to meet and sometimes there are caps on what is paid. Also, these medical benefits do not pay lost wages or anything for pain and suffering or anything for impairment or disfigurement or scarring that may have resulted from the injury. As a result of these other losses, even the person who does not want to “sue” anybody has to make a claim against the responsible people and their insurance company to recover all their losses.

When the injured persons’ insurance pays for a loss that was ultimately the resposibility of the other person or the other persons’ insurance, the injured persons’ insurance has a subrogation right to the monies received from others. In other words, the injured persons’ insurance has to be paid back and there is no legal, double recovery.

Personal Injury Protection (PIP) Coverage In Texas

October 13, 2009 | Mark S. Humphreys

PIP coverage is comparable to Medical Payments Coverage in a Texas Insurance Policy in that both are no-fault and pay for similar expenses. The difference between the two is this: Medical Payments Coverage only pays for reasonable and necessary medical expenses. PIP pays for that and up to 80% of lost wages, both to a maximum of whatever the amount of coverage is that has been purchased. Their similarity is that both are nofault coverages.

Texas Insurance Code, Article 5.063(b) sets up PIP coverage as a quick source (payable with 30 days of providing the information needed to pay the claim) of funds for an insured accident victim when the losses are for medical expenses or lost wages. The legal minimum is $2500, but much higher amounts can be purchased. The highest this writer has seen by an individual is $50,000.

PIP coverage exists in every automobile policy automaticly, unless rejected in writing by each insured. This is firmly established in Texas law in the cases, Ortiz v. State Farm Mutual Automobile Co., and Old American v. Sanchez.

What Is “Bad Faith” Insurance In Texas?

October 10, 2009 | Mark S. Humphreys

Most people have heard the terms, “Good faith”, “Bad faith”, “The duty of good faith and fair dealing”, and “Statutory bad faith”. The question would be: What do these terms mean and why do we care? In Texas, as in many other states, the duty of an insurance company to its customer, at least in the automobile and homeowners’ policies, go beyond just what the policy says.

Statutory bad faith is violation of statutes found in the Texas Insurance Code. These statutory violations are primarily found in Section 541.060 and Section 541.061.

Common-law bad-faith and statutory bad faith standards are essentially the same according to the Texas Supreme Court in their deciding of Progressive County Mutual Insurance Co. v. Boyd.

Notifying Your Texas Insurance Company Of A Claim

October 9, 2009 | Mark S. Humphreys

Whether you purchase your insurance policy in Dallas, Texas, or in Fort Worth, Arlington, Grand Prairie, Weatherford, or anywhere else in Texas, there is one thing you can count on. The policy of insurance that you purchase is going to require that you notify the insurance company “immediately” or “as soon as practicable” whenever there is an occurrence or an offense that may result in a claim. If you fail to do so, the one thing you can almost always count on is that the insurance company is going to deny your claim for benefits.

What if your failure to timely notify your insurance company of the claim or occurrence results in no harm to the insurance company? You still violated a policy provision by not notifying the company in the time frame in which the policy requires you to notify them. Do you lose? Is your claim for benefits lost?

This issue was addressed in the case PAJ, Inc. v. Hanover Ins. Co. This was a Texas Supreme Court decision. The issue for the court to decide was whether a policy holder who failed to timely notify its insurance company of a claim defeats coverage under the policy if the insurance company was not prejudiced by the delay. Prejudiced meaning, the insurance company suffered no real harm or loss due to the delay in being notified of the claim.

Fort Worth Court Interpreting An Insurance Policy

October 8, 2009 | Mark S. Humphreys

Venture Encoding Service, Inc. v. Atlantic Mutual Insurance Company is a Texas Appeals Court case wherein the Fort Worth Court of Appeals made a decision in a dispute between a policy holder and its insurance company. The dispute was one of policy interpretation.

The basic facts were that Venture, a printing company, made a printing error in the publication of 328,799 coupon books. The error was the printing of an incorrect lock box payment return address. The cost of re-printing and re-mailing the coupons books was $122,888.

Venture, who had a commercial general liability policy and an errors and omissions policy with Atlantic, made a claim for the $122,888. Atlantic denied the claim stating that the wording of the policy did not cover the type of loss that was incurred by Venture. The wording of the policy used to describe “property damage” was what was at issue. Plus, Atlantic cited an exclusion in the policy as another reason for denying the claim.