Insurance policies are contracts, and as such are subject to rules applicable to contracts generally. This is stated in the 1994, Texas Supreme Court opinion styled, Hernandez v. Gulf Group Lloyds.
An insured seeking to recover on an insurance contract must prove that the contract was in force at the time of the loss. Also, as discussed in the 1975, Tyler Court of Appeals opinion, Hartford Acc. & Indem. Co. v. Spain, a party who claims under a policy is required to produce the insurance contract upon which he sues or to prove the terms. To prove a breach of contract, the insured must establish:
(1) the existence of the contract sued upon
(2) compliance with the terms of the contract; and
(3) the insurer’s breach of the contract.
The three requirements above are set out in the 1992, Dallas Court of Appeals opinion styled, St. Paul Ins. Co. v. Rakkar.
In the Rakkar opinion, the first and second elements were satisfied by uncontroverted testimony that the house was insured at the time of the fire, that the insured had paid his premiums, that the insurer had refused to pay, and that the amount that would have been paid was the policy limits. The insurer denied the claim, contending that the insured intentionally caused the fire. When the jury rejected this defense, that established the third element — the insurer’s breach of the contract.
A caveat to the above in the context of insurance is that state common law and statutory claims made by an insured when he or she is insured under an employee benefit plan are preempted by ERISA. The preemption is found at 29 U.S.C.A., Section 1144(a) and backed up by the 1989, 5th Circuit opinion styled, Ramirez v. Inter-Continental Hotels. In addition, the 1988, 5th Circuit opinion styled, Hermann Hosp. v. MEBA & Benefit Plan, specifically held that breach of contracts are so prevented. Under ERISA, benefits are limited to recovery of the claim, clarification with respect to future claims, attorney fees and costs and, on rare occasion, limited equitable relief, pursuant to Section 1132(a).