Claims Denial

Texas Case With Lots Of Insurance Law

March 11, 2010 | Mark S. Humphreys

Grand Prairie residents beware; Weatherford residents beware; Arlington, Mansfield, Dallas, Fort Worth residents beware. Here is a case that makes you angry at the insurance company when you get into the details of how this person was treated by her insurance company and those associated with them.

The case is kinda old, decided in 2001. The style of the case is long, Lois Jones v. Ray Insurance Agency a/k/a Azteca Insurance and / or Alamo Insurance, and Collision Clinic, Inc., State & County Mutual Fire Insurance Company and Harbor Insurance Managers. It was decided by the Court of Appeals of Texas, Corpus Christi.

The facts of the case are long, but not really complicated. Lois Jones purchased a new 1998 Pontiac and purchased a State & County Mutual Fire Insurance Company insurance policy (State & County). This policy was purchased from the agent, Ray Insurance Agency a/k/a Azteca Insurance and / or Alamo Insurance (Ray). The policy administrator was Harbor Insurance Managers (Harbor). When purchasing the policy, Jones informed the agent that her sister lived with her, and was advised by the agent, that would not be a problem, and that as long as she paid her premiums on time she would have insurance. The policy with State & County excludes coverage for anyone residing with Jones age fourteen or over unless listed. Ms. Jones paid the November and December premium payments. The policy was to be effective from November 7, 1997 (the date of purchase) thru May 7, 1998.

An Understanding Of How Exclusions Work In An Insurance Policy

March 6, 2010 | Mark S. Humphreys

Insurance policy holders in Arlington, Grand Praire, Fort Worth, Weatherford, or Dallas, will all notice something called “Exclusions” in their policies. Maybe most people don’t look at their insurance policy’s until they have a reason to make a claim, but when they do they may read something they do not like. This something will usually be in the section of the policy titled “Exclusions.”

When Courts in Texas are called upon to read and interpret an insurance policy, the rule is, they are going to look at and interpret exclusions very narrowly. Their construction of the policy provisions are going to be very liberal with the aim being to favor coverage for the insured policy holder.

The Texas Supreme Court case, Puckett v. United States Fire Insurance Company, was decided in 1984, and states that insurance policies are strictly construed in favor of the insured to avoid excluding coverage. A historically long line of cases says that exceptions or limitations (exclusions) on liability are strictly construed against the insurer and liberally in favor of the insured. Here are a few of those Texas Supreme Court cases, National Union Fire Insurance Company v. Hudson Energy Company, decided in 1991. Barnett v. Aetna Life Insurance Company, decided in 1987. A 1982 case, Blaylock v. American Guarantee Bank Liability Insurance Company. Glover v. National Insurance Underwriter, was decided in 1977. And here is one, Brown v. Palatine Insurance Company, decided in 1896.

Excluded Drivers In Texas

February 26, 2010 | Mark S. Humphreys

There are lots of people in the Fort Worth, Dallas, Grand Prairie, Arlington, and Weatherford, areas of Texas who have problems getting affordable insurance. The reasons can be many, examples are, they are young, too many tickets, too many wrecks, a DWI conviction, license suspension issues, and medical conditions.

What happens if you have insurance on your car but when you bought the insurance you signed a document called a “named driver exclusion” on your spouse because the insurance company would not cover her because she suffered from epileptic seizures. That is what happened in the case, Janie Zamora, Pete Zamora, Jesus Toe, and Gracie Vela v. Dairyland County Mutual Insurance Company. This case was decided by the Court of Appeals in Corpus Christi, Texas.

The facts are, on December 2, 1993, Gracie Vela (wife of Jesus Toe) was operating Jesus’ automobile when she was involved in an accident with Pete and Janie Zamora. At the time of the accident, Gracie was named as an excluded driver in Toe’s policy with Dairyland County Mutual Insurance Company. The Zamora’s sued Gracie for her negligence and Jesus for negligently entrusting his car to Gracie. Dairyland denied coverage to Gracie and Jesus based on the named driver exclusion in the policy.

Life Insurance Policy Lapse In Texas

February 13, 2010 | Mark S. Humphreys

Most people think that the idea of life insurance is good. It shows you are thinking of the people in your life who are left behind. Sometimes, life insurance is purchased for business reasons. People who live in Arlington, Grand Prairie, Weatherford, or a big metropolitan area such as Dallas and Fort Worth are all going to consider life insurance at some point in their lives.

What happens when the idea of purchasing life insurance becomes a reality and after having bought the coverage, payments are missed? The Texas Court of Civil Appeals in San Antonio, decided this issue in 1962, and their decision is still good law for this question.

Merced Cantu et ux., v. Southern Life & Health Insurance Company, is a case that says, “It is not necessary for the insurance company to advise policy holders that their policy has lapsed”. In this case, the Cantu’s had a life insurance policy on their son. The son died and the Cantu’s made a claim for benefits from Southern Life & Heath Insurance Company. Southern denied the claim stating that the policy had lapsed for non-payment of premiums.

2 Texas Auto Policies – One Accident

February 8, 2010 | Mark S. Humphreys

Here is a situaton where a Dallas resident had a wreck in Mesquite, but it could have been Fort Worth, Arlington, Grand Prairie, or out in Weatherford. The injured persons had two insurance policies with the same insurance company.

This happened in a 1984 case, The Travelers Indemnity Company of Rhode Island, v. Lenny and Terri Lucas. Mr. Lucas was accompanied by his wife, Ms. Lucas, in an ambulance. A drunk driver ran head-on into the ambulance causing injuries to the Lucas’. They had two separate insurance policies with Travelers Indemnity, for Personal Injury Protection benefits and underinsured motorists benefits. Travelers paid the full amount under one policy to each of the Lucas’ but refused to pay under the second policy. The damages to the Lucas’ exceeded the limit of both the policies combined.

The ambulance also had underinsured benefits with a policy through Aetna. Travelers tried to limit what it had to pay by citing an “Other Insurance” clause within the Travelers policy.

Attorney’s Fees In Insurance Lawsuits

January 25, 2010 | Mark S. Humphreys

Almost all insurance disputes are going to have situations where an attorney is involved. Too many times these disputes end up in lawsuits. Prior posts on this blog have shown how most situations are going to require the insurance company to pay or reimburse attorneys fees where the policy holder prevails in their claim.

In 2007 a case, Lamar Homes, Inc. v. Mid-Continent Casualty Company, the Texas Supreme Court ruled that Section 542.060, Texas Insurance Code, applied to not just the underlying claim at issue in a lawsuit but to also attorneys fees in situations where the insurance company did not pay for attorneys on behalf of the insured persons or business.

Section 542.060 assesses an 18% annual penalty on the attorneys fees that the insurance company did not pay for.

Recent Texas Case Concerning Uninsured Motorist Coverage

January 24, 2010 | Mark S. Humphreys

Here is a case that was originally filed in a State District Court in Dallas, Texas. The case was removed to Federal Court and promptly dismissed.

The style of the case is “Kenneth McQuinne v. American Home Assurance Company”. The only important issue in the case was whether or not a self insured vehicle was “uninsured” for purposes of the American Home Assurance Company policy argued about in this case.

The facts in this case are that McQuinne was involved in a wreck with a person named Sapkota. Sapkota was driving a vehicle owned by Enterprise Leasing. McQuinne reached a settlement with Sapkota’s insurance company for the policy limit of $50,000. McQuinne alleged that his damages exceeded that amount and consequently filed a claim with American seeking additional benefits under the policy American had issued on his employer, Turfgrass.

A Federal Case Discussing Notice To Insurance Company Of Claim

January 23, 2010 | Mark S. Humphreys

The United States Court of Appeals for the Fifth Circuit is a federal court located outside of Texas. Cases that originate in Texas, including the Dallas, Fort Worth, Arlington, and Grand Prairie areas will end up in this Fifth Circuit Court when it is on an appeal.

A case decided in late December of 2009 discusses “notice” provisions in insurance policies. These provisions are important for the people or businesses who have these policies to understand.

The case is styled, “East Texas Medical Center Regional Healthcare System v. Lexington Insurance Co”.

Texas Bad Faith Insurance

December 19, 2009 | Mark S. Humphreys

Most people do not understand that there are two main kinds of law. The first, most people are familiar with, and we will call statutory law. This is the law that is written down by the legislative branch of government. For purposes of Insurance Law, it is the Sections, Chapters, and Subchapters of the Insurance Code.

The other kind of law, which most people are not aware of, is called the “common law”. The common law is the law that applies to situations even though the law is not specifically written down in a book somewhere.

Under Texas law, there is a “common law” duty for an insurance company to deal with one of its insureds in certain ways. This is called the the duty of good faith and fair dealing. When an insurance company does not honor its common law duty of dealing with one of its insureds in good faith, it is called “bad faith”. This concept was discussed by the Texas Supreme Court in 1987, in the case Arnold v. Nat. County Mut. Fire Ins. Co.

Texas Deceptive Trade Practices Act And The Insurance Code

November 28, 2009 | Mark S. Humphreys

A resident of Grand Prairie, Arlington, Fort Worth, Weatherford, or any other area in Texas can sue an insurance company for violations of the Texas Insurance Code under the Texas Deceptive Trade Practices Act. This is important because both of these areas of the law allow for favorable theories of recovery to the consumer who is wronged when dealing with an insurance company.

Texas Insurance Code, Section 541.151, specifically says that a person who sustains actual damages may bring an action against another for damages caused by the other person engaging in an act or practice, “specificaly enumerated in Section 17.46(b), Business & Commerce Code, as an unlawful deceptive trade practice …” The Business & Commerce Code is where the Texas Deceptive Trade Practices Act is located. The whole purpose of the DTPA is to prevent companies from doing wrongs to consumers.

In business and legal circles, Section 17.46(b) is referred to as the “laundry list” of things companies are prohibited from doing. Violations of this laundry list can result in actions by the States Attorney General plus numerous private causes of action by the consumer.