Fort Worth insurance lawyers need to be able to look at the facts of a case and determine whether or not the insurance agent can be held liable for his actions.
One thing to keep in mind as was stated in the Corpus Christ Court of Appeals case, In re National Health Insurance Company, is that to recover damages an insured must prove that the conduct complained of was the cause in fact of the actual damages.
An insurance agent may be liable for negligently failing to inform an insured of a policy renewal date. The case that states this is the Texas Supreme Court case, Kitching v. Zamora. In Kitching the Court held that an insurance agent who receives commissions from a customer’s payment of insurance policy premiums has a duty to reasonably attempt to keep the customer informed about his or her insurance policy expiration date when the agent receives information pertaining the expiration date that is intended for the customer.
The same Court has held that an agent may be liable for negligently failing to get appropriate coverage for the insured. Every failure of coverage, however, does not make the agent liable. For instance, to recover for an insurance agency’s negligence for failure to procure a liability policy, a plaintiff must prove there was an available insurance policy that would have provided the coverage sought.
In the Kitching case above, the facts show us that the agent negligently failed to notify the insureds about information he had received pertaining to the expiration date of their flood insurance. The agent had received copies of two policy renewal forms before the policy expired and did not notify the insureds about his having received such information. In addition, he received a “speed letter” from the insureds’ mortgage company requesting the agent look into the insureds’ lack of payment of the renewal premium, but he disregarded the instructions. Thus, the insureds did not pay their renewal premium, and their policy expired.
The San Antonio Court of Appeals held in 1987, that an insurance broker was negligent in failing to procure a maritime insurance policy without territorial exclusions. An employee of the broker testified that she was not in her office when the policy arrived from the insurance company but that, if she had been, following normal procedures, she would have verified that the policy covered the ship’s trip from St. Thomas to Houston and that the ship’s owners were receiving the coverage they requested. In addition, the insurance agent specifically inquired as to territorial exclusions, and the broker’s employee confirmed authority to bind coverage without mention of territorial exclusions.
Here is a contrast:
The Amarillo Court of Appeals in Pickens v. Texas Farm Bureau Insurance Co. found no liability on an agent. In Pickens, the insured homeowners were sued by Pickens, who was injured in their home. Pickens obtained a judgment for $935,000 and Farm Bureau paid policy limits of $25,000 for liability and $500 for medical pay benefits. The insureds sued for the insurer’s failure to advise them that they needed more coverage. The court found no duty. The insureds did not seek advice from the agent as to how much coverage they should obtain, did not question the amount of their coverage, and did not inquire about the amount of coverage available. In addition, one insured had called once to inquire whether a gun collection was covered, and when she learned it was not, ordered additional coverage for that. Thus, she knew how to get more coverage, but she did not ask about increasing the liability coverage.
Here is a case to be aware of – Metro Allied Insurance Agency, Inc. v. Lin.
In this case, an engineer needed a liability policy for a project and contacted an agent to obtain the coverage. The agent provided a quote, which would have provided coverage for the breach of contract claim later asserted against the engineer. The agent acknowledged that it failed to procure a liability policy and this failure was negligent, but argued that the failure did not cause the engineer any damages because he failed to show that there was any policy that could have covered his damages. The court found there was no evidence in the record that such coverage was available and hence no evidence of proximate causation.
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