Physical Contact Requirement

Tarrant County insurance lawyers should understand the “physical contact” requirement in an auto insurance policy that provides uninsured motorist (UM) coverage.
This requirement was the issue in the 1995, Texas Supreme Court case, Republic Insurance Company v. Stoker. Here is some of the relevant information.
This is a summary judgment case granted against Republic. The case arises out of a multiple car accident in which the Stokers’ automobile struck the rear end of another vehicle. It is undisputed that an unidentified pickup truck dropped a load of furniture on the highway, causing a chain reaction collision. Also, it is undisputed that this truck was not struck by any of the vehicles involved in the collision. The Stokers had no collision insurance and, therefore, submitted a claim to recover under their uninsured/underinsured vehicle coverage with Republic.
The Stokers’ policy provided uninsured motorist coverage for damages caused by an unidentified hit and run vehicle only if the vehicle hit the insureds’ car. The language of the policy is in accord with the requirements of the Insurance Code regarding uninsured motorist coverage.
The Stokers sued Republic for “bad faith” violations of the Texas Insurance Code.
As a general rule there can be no claim for bad faith when an insurer has promptly denied a claim that is in fact not covered. An insurer fails to act in good faith when it refuses without proper cause to compensate the insured for a loss covered by the policy. In order to establish a tort action for bad faith the insured must first prove that the insurer was obligated to pay under the policy. The determination of whether an insurer acted in bad faith generally requires as a predicate a determination that coverage exists for the loss in question.
The Stokers’ claim fails because, as a matter of law, they cannot meet the first prong of the requirements under Texas common law to establish a cause of action against Republic. As all the Stokers’ causes of action are predicated on their bad faith allegation, they are not entitled to recover against Republic.
Most insurance attorneys will run across situations where a potential client is telling a story wherein the client has been run off the road by another driver and has suffered property damage and personal injury as a result. The client wants to make a claim against his auto insurance company under the UM coverage in his auto insurance policy and it has been denied by his insurance company. It is often times hard for the client to understand that there must be physical contact between the two vehicles. This is hard to understand because for there to have been physical contact, would be requiring that the damage to be much more serious in most situations. But, that is the law.

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