Articles Posted in Claims Denial

I know, I know.  Nobody reads the policy.  But, not reading the policy and understanding it can be a killer.  This is illustrated in a May 2022, opinion from the United States 5th Circuit Court of Appeals.  The opinion is styled, Bradford Realty Services, Incorporated v. Hartford Fire Insurance Company.

The Policy at issue in this case is a commercial building policy.  It provides coverage for losses “caused by or resulting from water that backs up from a sewer or drain.”  It also excludes coverage for damage caused by rain unless the Property “first sustains damage by a covered Cause of Loss to its roof or walls through which the rain . . . enters.”

In September 2018, heavy rains swept over the insured property.  Drains on the building were clogged.  The clog and a subsequent leak caused extensive damage to the inside of the property.  Bradford filed a claim that was subsequently denied by Hartford with Hartford saying the damage was caused by rain that did not enter the building through damage caused by the storm and thus fell into the Policy’s exclusion for damage caused by the rain.

There are many reasons an insurance company use to deny a claim.  One of those reasons is a requirement in almost all insurance policies that an insured provide timely notice to the insurance company of a claim.  The primary reason the insurance company requires a quick, “timely” notice, is so that they can investigate the claim while it is new.

Here is a 2022, opinion form the Dallas Court of Appeals.  The opinion is styled, Richland Trace Owners Association v. Landmark American Insurance Company, Vericlaim, Inc. and Jason Roberts Keen.

The facts of this case are unique to the case.  However, the general discussion about a claim being submitted in a timely manner needs to be understood.

Being aware of when the statute of limitations runs on a claim is vital so that the limitations period does not expire.  This is illustrated in the 2022, opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Tobin Endowment v. Great American Assurance Co.

Tobin Endowment is the insured and Great American is the insurer.

Tobin filed this lawsuit on August 23, 2020, claiming that Great American underpaid the claimed loss.  Great American eventually filed this Motion For Summary Judgment stating to the Court that Tobin let too much time expire and that Tobin’s claim is barred by the statute of limitation stated in the policy.

Most insurance claims will not end up in a lawsuit.  However, for those claims that do end up in a lawsuit it is important for the insured to understand their responsibilities when in the lawsuit.  The failure of a party to the lawsuit to cooperate in the litigation process can be fatal to the lawsuit.

The above is illustrated in a 2022, opinion from the Austin Court of Appeals.  The opinion is styled, Michael V. Wright and Phyllis F. Wright v. State Farm Lloyds.

The Wrights were insured by State Farm with a homeowners policy.  The Wright’s suffered losses stemming from two fires to their residence.  One in 2013, and the other in 2015.

An often asked question by insureds having a claim against their insurance company is, “Can I recover my attorney fees?”  There is not a simple straight forward answer to this question.  Many variables come into play.  “Yes” is a simple answer but does not get into the variables.

A 2022, opinion from the Northern District of Texas, Dallas Division, discusses this issue as it relates to claims under Texas Insurance Code, Section 542A.003.  The style of the opinion is, Betty Rahe v. Meridian Security Insurance Company D/B/A State Automobile Mutual Insurance Company and Larysa Santiago.

Plaintiff sued Defendant on a claim arising from wind and hail damage to her property.

There is lots of information available about actions to be taken before a lawsuit is filed.  There is also a lot of information available about the potential wrongs of an insurance company, it’s agents and adjusters.  What is rarely discussed is the work an insured has to do in a lawsuit.  When we say”insured” we are speaking of the person, not the person’s lawyer.

This issue can be seen in a 2022 opinion from the Austin Court of Appeals.  The style of the opinion is Michael V. Wright and Phyllis F. Wright v. State Farm Lloyds.

In this case, the Wrights sued State Farm for breach of contract and various violations of the Texas Insurance Code.  The lawsuit arose out of the way the Wrights were treated after they made a claim for benefits after a fire loss.

Insurance lawyers try to evaluate the value of a claim when talking with a prospective new client.  Guess what?  Federal Judges do the same with cases removed to their Court from the State and County Courts.  This is seen in a 2021 opinion from the Southern District of Texas, McAllen Division.  The opinion is styled, Macario Saenz v. State Farm Lloyds.

This is a dispute over the amount of damage resulting from a hurricane claim between Saenz and State Farm.

A lawsuit was filed in State Court and State Farm removed the case to Federal Court pursuant to 28 U.S.C., Section 1332, based on the amount in controversy exceeding $75,000.  Saenz filed a motion to remand.

Insurance lawyers need to understand every way possible for maintaining their case in State Court whenever possible.  It is not possible too often, so when it is possible it needs to be done.

This 2021, opinion from the Northern District of Texas, Dallas Division, shows how one case was allowed to be in State Court.  The opinion is styled, Richard Conrad and Brenda Conrad v. Cincinnati Insurance Company and John W. Schuster.

This is a property insurance coverage dispute.  The Conrads sued Cincinnati and Schuster, an employee of Cincinnati who adjusted the claim, for various violations of the Texas Insurance Code and breach of contract after the Defendants concluded there was minimal damage to the property.  Suit was filed in State Court and the Defendants had the case removed to Federal Court based on diversity jurisdiction and the assertion that Schuster was improperly joined in the lawsuit.  The Conrads filed a Motion to Remand the case back to the State Court.