Grand Prairie residents and residents of Arlington, Dallas, Fort Worth, Mansfield, Weatherford, and any other town or city in Texas have a right to have their insurance company and agent be honest with them. Misrepresentation of an insurance policy in Texas is illegal under the Texas Insurance Code and Texas Deceptive Trade Practices Act.
The Texas Insurance Code, Section 541.061, states that misrepresentation of an insurance policy in Texas is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance. The title of Section 541.061 is “Misrepresentation of Insurance Policy”.
A violation of this section of the Texas Insurance Code is also a violation of the Texas Deceptive Trade Practices Act. As it relates to insurance misrepresentation, this section of the Insurance Code states that it is illegal to misrepresent features of an insurance policy by:
(1) making an untrue statement of material fact;
(2) failing to state a material fact necessary to make other statements made not misleading, considering the circumstances under which the statements were made;
(3) making a statement in a manner that would mislead a reasonably prudent person to a false conclusion of a material fact;
(4) making a material misstatement of law; or
(5) failing to disclose a matter required by law to be disclosed, including failing to make a disclosure in accordance with another provision of this code.
Some of this seems rather easy to understand and other parts of it can be quite confusing. One thing that should be obvious is that if you believe an agent or insurance company adjuster has mislead or misrepresented something about an insurance policy, you should contact an experienced Insurance Law Attorney. He would be able to discuss with you the representations made to you and your understanding of them and assist in seeing if you have a claim worth pursueing for violations of this section of the Insurance Code.
In 2003, the Court of Appeals of Texas, Austin, decided a case that discusses what constitutes “negligent misrepresentation”. The style of the case is, New York Life Insurance Company; New York Life Insurance and Annuity Corporation and Michael Coffey v. Phillip M. Miller.
This case involves a life insurance policy issued by New York Life Insurance Company to the CEO of Mary Kay Cosmetics. The real dispute here was between the different agents who sold the policy. But what is important to the purpose of this article is that it set out the requirements for a claim for “negligent misrepresentation”. The court said that what is needed to establish a claim for negligent misrepresentation is to prove that, without exercising reasonable care or competence, a representation was made in a transaction which contained “false information” for anothers guidance in his business affairs. That the misrepresentation caused the injured party to suffer a loss by relying on the information.
The biggest problem with the above New York Life case, is that it seems to make it much harder than it really is, to pursue a claim for a violation of Section 541.061. Of course this is another reason why legal counsel should be sought.
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