Articles Posted in Bad Faith Insurance

Dallas lawyers need to be aware of insurance companies that are breaking the laws so that they can scrutinize new cases with an awareness of the wrongs these companies have a history of performing.

The Virginia Times Dispatch ran an article on April 10, 2013, titled, Texas Insurance Firm Accused of Defrauding Tech Students. The article tells us a Texas company that provided health insurance to Virginia Tech students fraudulently overstated claims by more than $9 million to boost its profits, according to a 57-count federal indictment unsealed Tuesday.

The grand jury indictment in U.S. District Court in Abingdon charges GM-Southwest Inc. and its former owner, John Paul Gutschlag Sr., with racketeering, conspiracy, money laundering and fraud.

Weatherford attorneys who do insurance cases have to be able to draw the distinction between a case where an insurance company has treated one of its insureds wrong and when it has not, in order to be able to discuss the case appropriately with the client.

Here are two examples for consideration.

The El Paso Court of Appeals issued an opinion in a 1996, that is helpful. The case is styled, Columbia Universal Life Insurance Company v. Miles.

Fort Worth attorneys need to be able to recognize bad faith insurance as it relates to cancellation of an insurance policy.

The Texas Insurance Code, Section 551.109, tells us that upon the request of the insured, the insurance company must provide a written statement of the reason for canceling a policy. The insurance company cannot just cancel your policy without telling you why. The statement they provide must fully explain any decision that adversely affects the policyholder by denying him or her coverage or continued coverage and must:

(1) state the precise incident, circumstance, or risk factor applicable to the policyholder that violate the guidelines;

Fort Worth insurance attorneys need to keep up with what is happening in bad faith cases across the country. The Insurance Journal published an article that deals with this issue across the country.

It tells us a rising tide of first-party bad faith decisions is defining the contours of the bad faith cause of action.

Recently, three courts have found first-party insurance companies liable for bad faith claims handling. However, there are also two recent bad faith decisions in favor of the insurance company. Key aspects of each of these important cases are discussed below.

Weatherford bad faith attorneys need to know about this recent court opinion from the Corpus Christi Court of Appeals. The style of the case is Ruth McGhan v. Farmers Insurance Exchange. Here are some facts.

This is an appeal from a summary judgment granted in favor of Farmers Insurance Exchange, and against Ruth McGhan in a case involving damages to her lake house. By one issue, McGhan claims that the trial court erred in granting summary judgment because Farmers failed to conduct a reasonable investigation of her claim as “no representative from Farmers inspected the damage to McGhan’s 3,500 square foot roof,” which gave rise to McGhan’s statutory, common law and breach of contract claims.

McGhan originally filed suit against Charles Archer, Diana Kees, Archer Development Group, and Bill and Alice Clayton with respect to repairs that allegedly needed to be made to her home. Farmers had not yet been sued, but the pleadings alleged that coverage had been denied. Farmers was not named as a defendant until McGhan’s third amended petition in which she asserted that Farmers denied her claims because the claims were not covered losses. The lawsuit asserted claims of breach of contract, bad faith, deceptive trade practices, and negligence. In McGhan’s fourth amended petition, filed after the summary judgment was heard, McGhan alleged for the first time that no representative of Farmers adequately inspected the roof when she made her claims in 2007. Her causes of action against Farmers remained the same as alleged in the third amended petition.

Weatherford lawyers handling insurance claims need to have an understanding of about “good faith and fair dealing” as it relates to an insurance company’s duty it owes one of its insureds.

This is an area of law that a lot of attorneys do not know a lot about. Insurance law cases are not as well known as cases related to criminal law, family law, personal injury, bankruptcy, probate and business matters. There are a lot of statutes related to insurance, most of which are found in the Texas Insurance Code. But there is relevant law related to Insurance Law that is also found in the Texas Criminal Code, and the Texas Code of Criminal Procedure, the Texas Transportation Code, and the Texas Labor Code, to name a few.

The State Bar of Texas, Insurance Law Section, recently published information related to the duty an insurance company owes to one of its insureds. This article dealt with the duty of “good faith and fair dealing” that is owed by the company to its customers.