Claims Handling Process

Insurance Appraisal Clauses In Texas

April 22, 2010 | Mark S. Humphreys

Lightning strikes a home in Grand Prairie, or Arlington, Fort Worth, Dallas, or out in Weatherford. The lightning damages electronic equipment. The homeowner calls his insurance company to make a claim. Then the insurance company invokes an appraisal clause in the insurance contract. What does this mean?

This is what happened in the case, Steven Woodward, et al, v. Liberty Mutual Insurance Company. This case was decided by the United States District Court, N.D. Texas, Dallas Division on March 26, 2010. The Judge was the Honorable, A. Joe Fish. In this lawsuit, Liberty Mutual Insurance Company (Liberty) filed papers with the Court for an order to be issued to compel appraisal and to stay the Court actions in this matter pending the completion of appraisal. Judge Fish granted the motion and ordered the parties to complete the appraisal process.

In this case, the appraisal clause required each side to select a competent, independent appraiser, notify the other side who had been chosen and if the appraisers did not agree to choose an umpire to settle the matter.

Prompt Payment Of Claims Act

March 24, 2010 | Mark S. Humphreys

A Grand Prairie resident makes a claim to his insurance company for benefits. This could be a resident of Arlington, Dallas, Fort Worth, Weatherford, or any other city in Texas.

A question often comes up that goes like this, “How long does the insurance company have before they have to pay me?” The answer is “It depends.” Sounds lawyerly, right. Well it does depend. It depends on a number of factors, including the type of claim, the circumstances surrounding the claim, the type of insurance and the type of insurance company. However, guidelines to go by, are laid out in the Texas Insurance Code, Section 542.051 thru 542.061.

This area of the Texas Insurance Code is know as the “Prompt Payment of Claims statute”. It imposes certain deadlines for an insurance company to acknowledge, investigate, and accept or reject a claim. In situations where the insurance company violates the statute, they are punished by being liable for attorney’s fees and an additional 18% per annum penalty on the amount of the claim. These penalties are set out in Section 542.060.

Do Texas Laws Govern All Texas Policies

March 9, 2010 | Mark S. Humphreys

An important issue for any resident of Grand Prairie, Arlington, Dallas, Fort Worth, or even a resident of a smaller community such as Weatherford is: What happens if I get into an insurance dispute with my insurance company? What laws apply in fighting with the insurance company?

This question is atleast partially answered by a section of the Texas Insurance Code. Article 21.42 of the Texas Insurance Code is titled, Texas Laws Govern Policies. It says, “Any contract of insurance payable to any citizen or inhabitant of this State by any insurance company or corporation doing business within this State shall be held to be a contract made and entered into under and by virtue of the laws of this State relating to insurance, and governed therby, notwithstanding such policy or contract of insurance may provide that the contract was executed and the premiums and policy (in case it becomes a demand) should be payable without this State, or at the home office of the company or corporation issuing the same”.

Wow, no wonder attorneys are needed to decipher the law!

Cooperating With Your Own Insurance Company

February 24, 2010 | Mark S. Humphreys

A case decided in Fort Worth, Texas on June 11, 2009, is important to understand. The result of this case is the same in Weatherford, Grand Prairie, Arlington, or Dallas.

The style of this case is Garry Jenkins v. State and County Mutual Fire Insurance Company. The facts in this case are undisputed. Garry Jenkins foot was crushed when a tank skid fell off a truck driven by Mark Lemmon. The accident happened when Mark applied the brakes too quickly, causing the skid to break free and fall on Garry’s foot. Both Garry and Mark were working as independent contractors for L & G Pipe. L & G Pipe was owned by two people, Deborah Grisamer and Richard Lemmon.

At the time of the accident, State and County Mutual Fire Insurance Company had a policy of insurance with Deborah as the named insured. The policy was in effect on the date of the accident and the policy listed the truck as a “covered auto.” The wording in the policy is important in this case and provided as follows:

Appraisal In Insurance Texas Insurance Disputes

January 28, 2010 | Mark S. Humphreys

A lot of insurance contracts have written into them an appraisal clause or paragraph. Whether you bought the policy in Grand Prairie, Arlington, Dallas, Fort Worth, or out in Weatherford, Texas, you could be forced to submit to an appraisal process if the insurance company insists on enforcing that portion of the insurance contract.

A recent case, JM Walker, LLC v. Acadia Insurance Company, is an example of how these situations are sometimes handle. Each case would be different depending on the wording of the appraisal provision in the contract and the facts of the case.

In this case, Walker was the owner of five building in North Richland Hills, Texas. The roofs of the building suffered damage from a hailstorm. Walker submitted a claim to Acadia, but Acadia denied coverage after its adjuster determined that the roofs did not need to be replaced and that the damage that did exist, was less than the $5,000 deductible that applied in the case.

Competing Insurance Policies In Texas

January 27, 2010 | Mark S. Humphreys

Let’s pretend your sister in Dallas, is driving her brothers car, who lives in Fort Worth. The car is insured on hthe parents Safeco auto policy that was bought in Grand Prairie. Your sister has a wreck in Weatherford, Texas. Your sister also had insurance with Allstate on her own car she had purchased in Arlington. Your sister is at fault and the other driver suffers personal injury and property damage. Both Allstate and Safeco refuse to settle the claim being asserted against you and your sister because they believe the other company should be paying the claim or paying the claim on a pro-rata basis.

This can be a very frustrating position for someone to find themselves involved and is referred to as an “other insurance” issue. The above is roughly what happened in the case, Safeco Lloyds Insurance Company v. Allstate Insurance Company. This case was tried and then appealed to the Court of Appeals of Texas, San Antonio.

The general rule in the past has been that auto insurance coverage goes with the vehicle. If the coverage on the vehicle is not sufficient to pay all the lose incurred then, the driver of the vehicle who has separate coverage has this separate coverage kick in as secondary coverage. However, the laws have changed and each insurance policy has to be looked at and compared with the other policy that may provide coverage to see what the result may be in any particular situation.

Duty To Cooperate With Your Insurance Company In Texas

November 30, 2009 | Mark S. Humphreys

The general rule in Texas is that a policy holder has a duty to cooperate with his insurance company when the insurance company is investigating a claim.

Whether your house in Arlington burns down or you have a vehicle wreck in Grand Prairie the answer is about the same. Ditto for a life insurance claim made in Weatherford or a health insurance claim made in Fort Worth. Every insurance policy is going to place upon you a duty to cooperate with the insurance companies investigation of the claim.

Generally speaking you would have a duty to report the claim as soon as is possible. You would be asked and expected to make a statement to the insurance company. Often times you are going to be asked to fill out reports and other paperwork. You may have to get estimates or appraisals. If the loss being claimed is for physical injury, then an independent medical exam performed by a Doctor of the insurance companies choosing may be necessary.

Under-Payment Of Texas Insurance Claims

November 14, 2009 | Mark S. Humphreys

Can it be a surprise? Insurance companies appear to be getting caught in under paying on claims. The Texas Windstorm Insurance Association (TWIA) seems to be caught in some controversy regarding its claims handling along the Texas Gulf Coast. Keep in mind the problems being experienced could just as easily be happening in Fort Worth, Dallas, Grand Prairie, Arlington, or even a small town like Weatherford out in Parker County.

This problem is written about in an article in the Houston Chronicle titled “Lawsuit Says Windstorm Insurer Rigged Process”. The article discusses TWIA using prices lower than market rates to estimate materials and repair costs. TWIA is said to also be unfairly limiting costs on roof repairs and discouraging the reopening of closed claims.

In a lawsuit resulting from some of the abuses by TWIA, documents and software is said to have been discovered that supports the claims that the abuses are being committed. One example of the abuse was discovered when one adjusting firm reported the market rate for roof repairs to be $230 to $255 per 100 square feet, but TWIA’s price was $182. In another situation it is said that they suggested using shingles off one house that were not in too bad shape, to put on another house. This does not sound right to most people but may actually be allowed depending on the language in the insurance policy.

Your Duties After An Accident Or Loss In Texas

October 27, 2009 | Mark S. Humphreys

An appeal from a Dallas, Texas Court decision was decided by the Texas Supreme Court, in the case PAJ, Inc., d/b/a/ Prime Art & Jewel, v. The Hanover Insurance Company. This case was decided in January, 2008. It discussed the responsibilities of holders of an insurance policy as it relates to their duties after an accident or loss and how the failure of fulfilling those duties affects coverage under an insurance policy.

As a general rule almost all insurance policies require the policy holder to do the following: 1) promptly notify the insurance company of any loss or claim, 2) cooperate with the insurance company investigation of the claim or loss, 3) take reasonable actions to protect against further loss.

When a claim is denied due to a policy holder not promptly notifying the company of the claim or loss the insurance company has the burden of proving that this failure to promptly notify caused harm to the insurance company. This was the issue in PAJ.

What Happens When My Texas Insurance Company Goes Into Receivership

October 25, 2009 | Mark S. Humphreys

The Texas Department of Insurance has a web site that provides some useful information when an insurance company goes into receivership. An earlier blog at this site discusses the financial situation that will result in an insurance company being placed in receivership.

Other than the claims handling process, there are two main questions most people will have concerning their insurance policies when their insurance company is taken over by a receiver. The first is, “What happens to my unearned premium?”, and the second is “What happens to my coverage and benefits?”.

Unearned premium is the amount you paid to the company in advance that did not actually buy coverage. For instance, if you bought a six-month policy and paid all the premiums in advance, but the company failed two months later, you would be due a refund for four months of premiums.