Claims Denial

Flood Claims

March 8, 2016 | Mark S. Humphreys

Flood claims are a big part of insurance law. Knowledge of how these claims are looked at by the courts is important to an insurance lawyer. The United States 5th Circuit Court of Appeals issued an opinion in January 2016, that should be read. The style of the case is, Construction Funding, L.L.C. v. Fidelity National Indemnity Insurance Company.

Construction Funding filed a flood insurance claim against Fidelity after Hurricane Isaac struck in August 2012. The district court granted summary judgment in favor of Fidelity and Construction Funding appealed.

The National Flood Insurance Act of 1968 created the National Flood Insurance Program (“NFIP”) to provide affordable flood insurance on fair terms. The NFIP is administered and regulated by the Federal Emergency Management Agency (“FEMA”). Fidelity participates in the NFIP as a Write-Your-Own Program (“WYO”) carrier. As a WYO carrier, Fidelity issues Standard Flood Insurance Policies (“SFIP”) to NFIP participants and is responsible for handling all claims that arise under the SFIPs it issues. The terms of the SFIP are set by FEMA.

Complying With The Policy

January 21, 2016 | Mark S. Humphreys

Fort Worth lawyers will tell you to comply with the policy provisions when making a claim. In this regard, a case from the U.S. District Court McAllen Division is a good read. It is styled, Belinda Santa Maria v. State Farm Lloyds, et al.

This a summary judgment ruling and there were other motions pending but due to the ruing in favor of State Farm, the Court deemed the other motions of no consequence.

Plaintiff’s claims arise from damage sustained to their property as a result of a storm event on March 29, 2012. Plaintiffs reported the claim on April 11, 2012, and State Farm inspected the property on May 2, 2012, estimating the loss at $7,028.04. On the same day, State Farm issued a check for $2,177.16, after adjusting for depreciation and deductible.

Insurance – Breach Of Contract – Hail Damage

January 10, 2016 | Mark S. Humphreys

Hail damage claims are a big source of litigation for insurance attorneys in the Dallas and Fort Worth areas. An opinion from the Federal Court , Southern District of Texas, McAllen Division is worth reading. It is styled, Armando Martinez, et al v. State Farm Lloyd’s, et al.

This is a granting of summary judgement in favor of State Farm.

Martinez’s claims arise from damage sustained to their property as the result of hail storms in April 2012. On May 7, 2012, Martinez reported an insurance claim for property loss and State Farm inspected the property of May 14, 2012, estimating the loss to the dwelling at $10,802.78. The adjuster found damage to the dwelling roof, shed roof, gutters, and a metal carport. On the same day, State Farm issued a check for $8,325.08, after applying depreciation and deductible.

Two Hail Storms – Two Different Insurance Companies

November 28, 2015 | Mark S. Humphreys

Layers who handle hail damage claims will frequently run into the situation where an adjuster admits there is hail damage on a roof but that the damage is old or there is old damage and new damage to the roof. The question becomes, what is the best course of action in getting a full recovery. The answer is to file claims / sue both insurance carriers. The U.S. District Court, Western District of Texas, Austin Division had this issue in a recent case. The style of the case is, Evridges, Inc. v. The Travelers LLoyds Insurance Company.

In this case, Evridges filed suit against Travelers for hail damage to its property. When evidence that some of the damage was from another storm when another insurance company and policy were in force, Evridges sought to have Travelers added to the lawsuit. This insurer is Landmark American Insurance Company.

Travelers opposed the joining of Landmark, arguing to the court that the joinder was improper under Federal Rule 20(a) because the claims against Landmark do not arise from the same transactions or occurrences as the claims against asserted against Travelers, and since the claims against Landmark do not present common questions of law or fact as the claim against Travelers, that the joinder is improper.

Insurance Company Trying To Rescind A Policy

September 1, 2015 | Mark S. Humphreys

Life insurance lawyers need to know the facts in a 1980, Texas Supreme Court case. It is styled, Mayes v. Massachusetts Mutual Life Insurance Co. This case is important because a life insurance company often times to rescind a policy based on misrepresentations made in the policy application.

In Mayes, Massachusetts tried to rescind three policies of insurance on the life of Albert Hayes after he died. Mayes did not disclose that certain answers which were correct when made became false by the time the policies were delivered.

On May 6, 1976, Albert Mayes signed and delivered to an agent of Massachusetts Part 1 of two applications for life insurance. These applications had been filled out by the agent and his secretary from information secured from a previous policy issued to Mayes through this agent. The applications are identical except for the amount of insurance requested by each application. On page three of each application is the following paragraph:

Declaratory Judgment In Insurance

July 23, 2015 | Mark S. Humphreys

Farmers Branch insurance lawyers will run across situations where an insurance company is defending a lawsuit under a “reservation of rights” and then filing a declaratory judgment lawsuit against their insured. This is what happened in an opinion styled, Broussard v. Texas Farm Bureau. The opinion is from the Houston Court of Appeals [14th Dist.].

Farm Bureau issued a homeowner’s insurance policy to Becky and Joseph Broussard for their property. Becky injured an individual while she was operating an all-terrain vehicle. The Broussards reported a claim to Farm Bureau for the accident. The injured individual filed suit against the Broussards (the underlying suit), and the Broussards requested Farm Bureau defend and indemnify the underlying suit. Farm Bureau provided a defense to the Broussards with a reservation of rights.

At the same time, Farm Bureau filed a declaratory judgment action seeking a declaration that it has no duty to (a) defend or indemnify the Broussards for the underlying suit and (b) make medical payments to the injured plaintiff in the underlying suit. The Broussards answered with a general denial and a counterclaim for a declaration that Farm Bureau owed them both a duty to defend and indemnify and to make medical payments in the injured plaintiff in the underlying suit and for violations of the DTPA.

Potential Recovery In Insurance Claims

June 7, 2015 | Mark S. Humphreys

Crowley insurance lawyers should be able to discuss with clients the potential recovery when an insurance company wrongfully denies a claim.

One element of recovery is the actual damage. In other words the actual amount due under an insurance policy. An example would be a life insurance policy with a $100,000.00 benefit to beneficiary. If that claim is denied and it is found to be a wrongful denial, then the claimant / beneficiary is entitled to the actual damages of $100,000.00.

Another potential recovery when a trier of fact, whether that be a Judge or Jury, finds that the insurance company acted “knowingly” the trier of fact can award not more than three times the amount of actual damages. This relief is found the Section 541.152 of the Texas Insurance Code. This is commonly referred to as “treble damages.” This term originated from the days when the Texas Deceptive Trade Practices Act (DTPA) mandated an automatic tripling of the injured parties’ damages. The current state of the law states this trebling must accompany a finding of “knowing” conduct. It is important to know that the trebling is not an automatic number. For example a trier of fact could find the insurance company “knowingly” committed a wrong but then choose to not award any amount of extra damages. It is entirely up to their discretion according a 1994, Texas Supreme Court case styled, Celtic Life Insurance Company v. Coats.

Statement In Insurance Application

May 16, 2015 | Mark S. Humphreys

Dallas life insurance lawyers need to read this 1979, Amarillo Court of Appeals opinion. It is styled, Allied Bankers Life Insurance Company v. Mary De La Cerda.

On December 27, 1976, Paul A. De La Cerda secured a $9,000 group credit life insurance certificate from Allied. The certificate contained a statement that the insured had not been, nor was being, treated for certain diseases and that he was in good health.

On February 3, 1977, insured died. The cause of death was diagnosed as acute myocardial infarction superimposed upon a previous anterolateral infarction. The bank filed its claim under the certificate, which was denied by Allied. Thereafter, the bank assigned its interest to Mrs. De La Cerda.

Life Insurance Application

May 10, 2015 | Mark S. Humphreys

The life insurance application must be attached to the life insurance policy. Any experienced life insurance attorney in the Dallas and Fort Worth area can tell you this. It is emphasized in a Texas Supreme Court case in 1975, styled, Johnson v. Prudential Insurance Co. of America.

This is a lawsuit to collect benefits under a group life insurance policy. The insurance company resisted payment on the ground that the deceased insured willfully deceived the company by her statements made in procuring coverage; the company has obtained favorable findings to support this defense. This appealed followed.

Katherine Johnson was a teacher who obtained insurance upon her life under a group policy issued by the Prudential. She applied for insurance coverage on November 12, 1968. Prudential issued its certificate for her coverage, effective January 1, 1969. The amount of the original benefit was $10,000; it was raised to $12,000 in April of 1969 and then to $15,000 in 1970. Katherine Johnson died on November 16, 1970; her husband was the beneficiary on the insurance contract and brought this suit against the insurer on June 25, 1971.

Waiver Of Rights

May 9, 2015 | Mark S. Humphreys

Mineral Wells insurance lawyers know to tell clients to not negotiate checks from an insurance company that represent a refund of paid premiums. But what happens if the check is cashed by the client? A 2006, Federal District Court in Houston Texas is worth reading. The style of the case is, Kirk v. Kemper Investors.

This case arises from a life insurance policy issued by Kemper. Ms. Kirk passed away on while the policy was in effect. Because her death occurred within two years of the policy’s issuance, Kemper conducted a routine investigation, which revealed that Ms. Kirk had been treated for chest pain, respiratory disorder, mental disorder, and uncontrolled high blood pressure. Ms. Kirk had denied that she had ever had or been treated for any of these conditions in her application for the Kemper life insurance policy. Based on these alleged misrepresentations, Kemper denied payment of any benefits on the policy.

Kemper issued a refund check for the paid premiums that was cashed. Kemper then filed a motion for summary judgment saying Kirk had waived his rights to any benefits by cashing Kemper’s premium refund check.