Dallas Fort Worth Insurance Lawyer Blog

When Does Life Insurance Coverage Begin

June 9, 2018 | Mark S. Humphreys

Life insurance lawyers will see many reasons for denial of life insurance benefits. Occasionally, one of the reasons is that the policy had not become effective at the time of death.

Most policies state the “effective date” of coverage. This date may be earlier than, or later than, the date the first premium is paid or the dates the policy is issued or delivered. Often, a policy may have an effective date, an issue date, and a policy date, and may all be different, causing confusion or misunderstanding. If the dates differ, disputes may arise over when the policy actually took effect or terminated. The effective date can be important in setting the due date for subsequent premiums and thus the date of any lapse or failure to pay a premium.

The 1980, Texas Supreme Court opinion styled, Life Insurance Company of the Southwest v. Overstreet illustrates how confusion can sometimes create problems for the beneficiary. In Overstreet, a policy provided that its effective date was March 15th and each annual premium was due on the anniversary of that date. The insured did not pay his first premium until April 18th. Two years later, the insured died while his premium was due. If the effective date was measured from March 15th, he dies outside the grace period and had no coverage. If measured from April 18th, he died within the grace period, and within coverage. The Texas Supreme Court held there was no coverage, following the majority rule that “a definite statement in the policy of the date on which annual premiums will be due is the due date. Such a statement of the due date controls even over a provision stating that a policy will not be in force until it is initially delivered and the first premium is paid during the good health of the insured.

Excluded Driver In A Policy

June 7, 2018 | Mark S. Humphreys

Almost all auto policies will have a form to fill out called a 515A. This form when filled out and signed excludes named drivers from any coverage while they are operating the otherwise insured vehicle.

This topic was discussed in a declaratory judgement opinion from the Dallas Court of Appeals styled, John Dempsey v. ACCC Insurance Company.

ACCC sought to have the Court declare that ACCC had no liability under a policy of insurance issued to Sherman Clifton. Shashana Clifton was an excluded driver under the policy. All the paperwork making the exclusion binding was properly completed.

Proof Of Loss Requirement

June 5, 2018 | Mark S. Humphreys

The U.S. District Court, Eastern District, Sherman Division, issued an opinion in May 2018, styled, James Cunningham and Tabatha Cunningham v. Allstate Vehicle and Property Insurance Company.

The Cunningham’s allegedly suffered damages during a hail and windstorm. The claim was reported to Allstate and five days later Allstate inspected the property. The Cunningham’s requested a re-inspection which was denied. Without providing a proof of loss in accordance with policy provisions, the Cunningham’s filed suit against Allstate.

Allstate responded by filing a motion to dismiss for lack of subject matter jurisdiction due to the Cunningham’s failure to satisfy the policy proof of loss requirement.

ERISA – Where To Litigate The Case

June 3, 2018 | Mark S. Humphreys

ERISA cases are complicated, as any attorney handling ERISA cases can tell you. This is exemplified in an April 2018, opinion from the U.S. District Court, Western Division, Austin Texas. The opinion is styled, Kimberley Phillips v. Charter Communications, Inc. Welfare Benefit Plan.

Charter filed a motion to transfer the case to the District Court for the Eastern District of Missouri. This court granted the motion.

This ERISA plan contains a forum-selection clause (FSC) that states, “any legal action to appeal a denial of claims for benefits shall be brought in a federal court sitting within the Eastern District of Missouri. Charter argues that the FSC is valid and controlling, warranting transfer. Phillips, meanwhile, argues that the controlling document to this dispute is the Summary Plan Description (SPD) for the Charter Short-Term Disability Program ( STD Program), which is a component program of the Plan. The SPD contains a clause that states, “at the completion of that review process, you have the right to file suit in federal or state court.” Phillips argues that the SPD’s clause supersedes the Plan’s FSC and confers broad forum-selection authority upon Phillips. In the alternative, Phillips argues that even if the Plan’s FSC is valid, the Court should refuse to apply it because doing so would be unfair.

Insurance Adjusters And Chapter 541 – Federal Court

June 2, 2018 | Mark S. Humphreys

The United States District Court, Northern District, Dallas Division, issued an opinion in April 2018, titled, Grand Hotel Hospitality LLC d/b/a Grand Hotel Dallas v. Certain Underwriters at Lloyd’s of London et al.

This is a breach of contract case where Grand Hotel suffered a fire damage and sued Lloyd’s and the adjuster assigned to handle the claim. There were allegations for violation of the Texas Insurance Code, Section 541.060, made against the adjuster, Brandon Weir.

The lawsuit was filed in State Court and the Defendants caused the case to be removed to Federal Court alleging the joinder of Weir was fraudulent in order to beat diversity jurisdiction under 28 U.S.C. Section 1332.

Life Insurance Requirements

May 31, 2018 | Mark S. Humphreys

Life insurance policies are required to have certain provisions. To begin with, all life insurance policy forms have to be approved by the Texas Department of Insurance.

Texas Insurance Code, Section 1101.004 requires that all policies allow a grace period of at least a month.

Section 1101.003 requires that the submitted application be part of the life insurance contract.

The Most Common Life Insurance Disputes

May 29, 2018 | Mark S. Humphreys

Life insurance lawyers will at one time or another see most of the types of disputes that arise in life insurance disputes. When there is a dispute, finding an attorney who deals with life insurance cases who can discuss your case can make a big difference. Here are some of the areas in which disputes arise:

An insurance agent may misrepresent the benefits of an insurer’s policy to induce the insured to switch from another company.
An insurance agent may fail to disclose that health conditions may cause the insured’s application to be rejected. If the insured was induced to let a rival policy lapse based on the expectation of replacement coverage, the insured may have no insurance.

Types Of Life Insurance In General

May 27, 2018 | Mark S. Humphreys

Here are some basics about life insurance for a life insurance lawyer to understand.

Common life insurance types are term, whole life, and universal life.

“Term” policies simply provide a death benefit in return for a premium payment. At the end of the policy year, or “term”, the insurance ends, and the policy has no value. Term policies do not accrue cash value. Because the insured is only paying for the death benefit, term policies are cheaper in the early years. As the insured gets older, the risk of death increases and so does the premium, so term may become more expensive than the other types. Insurers typically sell term policies that promise a fixed premium for a set number of years. For example, an insurer may sell a 10 year term policy that the insured may purchase and renew for the same annual premium during those years, without having to re-qualify.

Automobile Damages – Actual Cash Value And Diminished Value

May 26, 2018 | Mark S. Humphreys

Insurance lawyers trying to help client with automobile property damage will find they need to understand and be able to explain the damages in two ways. Actual Cash Value (ACV) and diminished value.

“Actual cash value” is the value of the vehicle, less depreciation. The limitation of “actual cash value” has been upheld and found to be reasonable cash market value of the vehicle before the loss. This is discussed in the 1968, Texas Supreme Court opinion styled, Superior Pontiac Co. v. Queen Insurance Company.

Even after a vehicle is fully repaired, its value may still be diminished, but the insurer is not liable to pay for this diminution of value. This is discussed in the 20023, Texas Supreme Court opinion styled, American Manufacturers Insurance Co. v. Schaefer. Keep in mind this is in the context of your own insurer, not the other guys insurance company. The other guy’s insurance can be held responsible for diminution of value.

Repair or Replace Language In An Auto Policy

May 24, 2018 | Mark S. Humphreys

The terms “repair” and “replace” mean restoring the automobile to essentially the same condition as it was in immediately before the collision. It would not be restored to the same condition if the repairs left the market value of the auto substantially less than the value before the collision. This was the decision in the 1969, Corpus Christi Court of Appeals opinion, Northwestern National Insurance Company v. Cope.

As stated in the 1968, Tyler Court of Appeals opinion, Agricultural Workers Mutual Automobile Insurance Company v. Dawson, if a vehicle is repairable, the insured is entitled to no more than what it would cost to repair the property. This presumes the vehicle has been repaired to essentially the same condition that it was in before the loss. But if, after repair, the vehicle has not been restored to the same condition as it was in immediately before the loss, the owner may be entitled to recover for diminution in value without necessarily showing the repairs were inadequate. This was discussed in the 1968, Texas Supreme Court opinion styled, Superior Pontiace Co. v. Queen Insurance Co.

If an insurer repairs a vehicle, it must use parts of “like kind and quality” according to the 2003, Texas Supreme Court opinion styled, American Manufacturers Mutual Insurance Co. v. Schaefer.