Claims Handling Process

Misrepresentation In Purchase Of Insurance Policy

June 5, 2012 | Mark S. Humphreys

Weatherford attorneys and those in Mineral Wells, Aledo, Azle, Springtown, Peaster, Millsap, Brock, Hudson Oaks, Willow Park, and other places in Parker County would want to read the case decided in July 2011, by the San Antonio Court of Appeals. The case is styled, Texas Farm Bureau Mutual Insurance Co. v. Shannan Rogers and Cristen Bazan et al. Here is some background.

In 2008, Cynthia Bazan purchased a house in Kerr County with a mortgage from Regency Solutions, which required her to obtain insurance on the house. Bazan purchased a policy from Farm Bureau. On January 14, 2009, a fire completely destroyed her house and all of its contents. She made a claim and Farm Bureau began a criminal background check of Bazan and the cause of the fire. The fire was determined to be of “undetermined” origin. Bazan, in her interview admitted to a criminal history. However, she had denied the criminal history in her application for insurance. In fact, she had a lengthy criminal history. Farm Bureau made a decision to rescind the policy, thus denying Bazan policy benefits for the fire loss.

The specific policy language relied on by Farm Bureau read:

Duty To Cooperate

March 29, 2012 | Mark S. Humphreys

Lots of people in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, Springtown, Millsap, Brock, and other places in the Parker County area and for that matter, other places in Texas may not realize that they have responsibility under their insurance policies to cooperate with their insurance company with any claim that is being made against the insurance policy.

This “duty to cooperate” can be confusing at times. There can sometimes be a fine line between what the insurance company has a responsibility for investigating and what the insured must do to help in that investigation.

The Texas Insurance Code, Section 541.060 provides a guideline for some of the things that can be done or asked for by an insurance company in its investigation. Section 541.060(a)(9), is one place where limits are placed on that investigation.

Misrepresentation In Insurance Policy Application

February 25, 2012 | Mark S. Humphreys

People in Weatherford, Aledo, Brock, Millsap, Mineral Wells, Springtown, Willow Park, Hudson Oaks, and other places in Parker County need to understand that the ways they fill out an insurance application can be important.

Here is a case where the insurance company lost the argument that the information in the policy application was incorrect. The style of the case is Fredonia State Bank v. General Life Insurance Company. The opinion in the case was issued in 1994 by the Texas Supreme Court. Here are the facts of the case.

The insured person died as the result of a gunshot wound to the head. Prior to his death, he had purchased two life insurance policies, each in the amount of $250,000 issued by General American Life Insurance Company. General American denied the beneficiary’s claims for benefits. Fredonia State Bank, an assignee of one of the two policies and executor of the insured’s estate, sued to collect the proceeds of the policy.

Duty To Cooperate With Insurance Company After A Loss

December 8, 2011 | Mark S. Humphreys

An insured in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, Brock, Millsap, Peaster, Cool, Springtown, or anywhere else in Parker County may wonder how much they are suppose to do to help the insurance company when a claim is submitted for coverage. The answer is – quite a bit.

As for homeowners policies in Texas, the form and wording of the majority of policies follow what is called the Texas Homeowners Policy – Form B (“HOB”).

The HOB Policy requires that the insured cooperate with the insurer’s investigation of the claim by promptly submitting notice of the claim, completing an inventory of the damaged property, providing access to the damaged property and records, and signing a sworn proof of loss form. These requirements on the insured constitute a condition precedent to coverage under the policy. A United States, 5th Circuit case styled, Griggs v. State Farm Lloyds, decided in 1999, said absent the insured’s compliance with the conditions precedent to coverage, the insurer has no duty to provide benefits under the contract.

Delay In Payment Of Claim

November 26, 2011 | Mark S. Humphreys

People in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Willow Park, Brock, Hudson Oaks, Millsap, Cool, Peaster, Palo Pinto, and other places in Parker and Palo Pinto Counties may wonder: How long does the insurance company have to pay the claim?

The “Prompt Payment of Claims statute” is found in the Texas Insurance Code, Sections 542.051 thru 542.061.

The “Prompt Payment of Claims statute” imposes certain deadlines for an insurance company to acknowledge, investigate, and accept or reject a claim. An insurance company that violates the statute is liable for attorney’s fees and an additional 18% per annum in addition to the amount of the claim.

Where Appraisal Does Not Apply

November 12, 2011 | Mark S. Humphreys

If someone in Grand Prairie, Arlington, Crowley, Mansfield, Benbrook, Burleson, Keene, or anywhere else the metroplex area reads their homeowners insurance policy, they will probably find an appraisal clause. This clause usually, is for the benefit of the insurance company. As a result, getting around that clause is a good thing.

The United States District Court for the Southern District of Texas, Houston Division, issued an opinion on October 13, 2011, that is insightful for understanding at least one way of beating the appraisal clause. The style of the case is, Sidney Sam, et al. v. National Lloyds Insurance Company.

Sam and others (Plaintiffs) were insured under a Standard Flood Insurance Policy (SFIP) issued by Lloyds pursuant to the National Flood Insurance Program (NFIP). Plaintiffs’ apartment building was damaged by flood waters following Hurricane Ike. Plaintiffs submitted their claim to Lloyds, which determined that the flood damage to the building and its contents would require repairs in the amount of $100,622.67. Plaintiffs submitted a request for supplemental payment in the total amount of $249,000, or an additional amount of $148,377.33 beyond the amount offered by Lloyds. The additional payment included $39,000 for the presence of a “Commercial Superintendent on the site for 3 months for commercial restoration.” On April 21, 2010, Plaintiffs demanded an appraisal. On May 3, 2010, Lloyds denied the request. Plaintiffs filed a Motion to Compel Appraisal on September 15, 2011.

Claims Handling Process / Getting Paid On A Homeowners Policy Claim

November 8, 2011 | Mark S. Humphreys

Everyone in Grand Prairie, Arlington, Fort Worth, Dallas, Irving, Mesquite, Garland, Carrollton, Duncanville, De Soto, and other places through out Texas need to know how to make sure they get paid properly and fully when making a homeowners claim.

One way is to see an experienced Insurance Law Attorney early in the claim. Another way is to make sure you have good records of your possessions.

The Wall Street Journal published an article on October 13, 2011, authored by Lori Bennett. The title is “Accounting for Disaster: Itemizing Your Home.”

How Long Does An Insurance Company Have To Pay A Claim

August 20, 2011 | Mark S. Humphreys

Anyone in Grand Prairie, Weatherford, Fort Worth, Dallas, Arlington, Aledo, or anywhere else in Texas may ask the question which is the title of this post. The answer is not as easy as one would hope it to be.

The Texas Insurance Code has a subchapter titled “Prompt Payment of Claims.” This subchapter consists of eleven sections. To answer the question of how long an insurance company has to pay a claim, the section has to be read with the applicable policy and then apply both to the facts of the case.

A 1998, Fourteenth District Court of Appeals case styled, John A Daugherty, Jr. v. American Motorists Insurance Company, deals with the question. The case was decided by the trial judge in favor of the insurance company and then the decision was upheld by this appeals court. Here is the story.

Blamed For Arson

August 16, 2011 | Mark S. Humphreys

Arsons happen in Weatherford, Mineral Wells, Aledo, Azle, Millsap, Hudson Oaks, Willow Park, Brock, Peaster, Springtown, and all over Parker County and Texas. But that does not mean the person who owned the property committed the arson. And when the insurance company does an investigation and finds the property owner is having financial problems that does not mean the property owner burned the property either. After all the vast majority of people have financial problems.

Here is a case that deals with arson and the insurance company attempt to blame the arson on the homeowners. The case opinion was issued in 2000, by the Dallas Court of Appeals. The case is styled, Texas Farmers Insurance Company v. Cloteal L. Cameron, et al.

The jury found against Farmers for violations of the Texas Insurance Code, bad faith, violation of the Prompt Payment of Claims Act, mental anguish, violations of the Texas Deceptive Trade Practices Act, knowing and intentional conduct, and attorney fees. This appeals court reversed the finding regarding the mental anguish claim and part of the attorney fees claim and the calculation of interest on the claim.

Insurable Interest

August 14, 2011 | Mark S. Humphreys

Insured’s in Weatherford, Mineral Wells, Aledo, Azle, Hudson Oaks, Springtown, Willow Park, Brock, Millsap, Peaster, and other places in Parker County might wonder, what does “insurable interest” mean. Here is a case that talks about it.

The opinion in this case was issued in 2000, by the Corpus Christi Court of Appeals. The style of the case is, Colonial County Mutual Insurance Company v. Hector Valdez. Here is some background.

Colonial County Mutual Insurance Company (Colonial) appealed a judgment against them by Valdez, wherein Valdez was awarded damages. This court affirmed the judgment with some reformation. Early on, Colonial had filed a declaratory judgment action asking the court to rule there was no coverage in the case due to Valdez not having an “insurable interest.” Factually here is what happened.