Articles Posted in Claims Handling Process

Mineral Wells insurance lawyers know that when making a pre-suit demand on an insurance company that making an excessive demand can be more harm than good.  This is discussed in a Houston Court of Appeals [1st Dist.] opinion released in August 2016.  The case is styled, United Services Automobile Association v. Hayes.  The opinion is over 50 pages long and discusses various issues on appeal but one of those issues deals with excessive pre-suit demands.

Texas law holds that a creditor who make an excessive demand upon a debtor is not entitled to attorney’s fees for subsequent litigation required to recover the debt, even if it prevails in its suit.  A demand is not excessive simply because it is greater than the amount eventually awarded by the fact finder.  However, a claim for an amount greater than that which a jury later determines is actually due may indeed be some evidence of an excessive demand.  Nevertheless, it cannot be the only criterion for determination, especially where the amount due is un-liquidated.

The dispositive question in determining whether a demand is excessive is whether the claimant acted unreasonably or in bad faith.  Further, application of the excessive demand doctrine is limited to situations in which a creditor has refused a tender of the amount actually due or has clearly indicated to the debtor that such a tender would be refused.

Weatherford insurance lawyers know resources to research to discover or confirm whether or not an insurance company adjuster doing their job properly. The Texas Insurance Code has specific sections that deal with unfair claims settlement practices that an adjuster may employ.

Sec. 541.060. UNFAIR SETTLEMENT PRACTICES. (a) It is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to engage in the following unfair settlement practices with respect to a claim by an insured or beneficiary:

(1) misrepresenting to a claimant a material fact or policy provision relating to coverage at issue;

Dallas insurance attorneys need to be able to understand “reservation of rights” letters. A 1999, Dallas Court of Appeals opinion discusses an issue with these letters. The opinion is styled, Aetna Casualty & Surety Co. v. Naran.

On July 28, 1986, Naran’s home, garage and two cars were destroyed in a fire. The fire was caused by a catalytic converter installed on Naran’s 1984 Mercedes. It was installed by a franchisee of Village Imports. Naran sued Village Imports alleging negligent installation, breach of warranty, and DTPA violations. Village forwarded the lawsuit with a notice of loss to Aetna, their insurer. Aetna issued four different policies to Village, but all policies expired prior to the date of the fire. However, when the notice of loss was sent to Aetna, it mistakenly indicated that the date of loss was July 28, 1985 instead of 1986. Aetna hired an attorney to defend Village. Subsequently, Aetna learned of the actual date of the fire, and Village agreed to allow the withdrawal of the attorney hired by Aetna. A judgment was entered against Village, and Naran sued Aetna directly as a judgment creditor. The trial court granted Naran’s motion for summary judgment, and denied Aetna’s motion for summary judgment and this appeal was filed.

This Dallas Court of Appeals reversed the trial court. Naran had the burden of proving that the damages occurred during the Aetna policy period. Naran contended that the damage to Naran’s car commenced in March of 1985 when Naran began to drive the car with the defectively installed catalytic converter. Naran introduced expert testimony that the heat of the converter caused the moisture to be removed from the carpet in the car thereby lowering the ignition temperature of the carpet. The carpet was then eventually ignited from the heat. Naran argued that the continued heating was a continuous process of damage to the car, and he took the position that the court should apply the exposure theory or the continuous exposure theory to determine if property damage occurred during the policy period.

Texas insurance attorneys will tell you that one of your obligations under your insurance policy is to co-operate with the insurance company investigation of your claim. A Houston Division, Southern District case illustrates how difficult matters can be when the co-operation is questionable. The case is styled, Resie’s Chicken & Waffles Restaurant, et al. v. Acceptance Indemnity Company, et al.

This case went to trial and the jury found in favor of Resie’s and against AIC. However, AIC argued that the jury finding in favor of Resie’s should be disregarded due to the jury making findings against Resie’s as it relates to Resie’s turning over financial records that were sought from Resie’s by AIC.

This declaratory judgement action was for breach of contract, violations of Chapters 541 and 542 of the Texas Insurance Code and DTPA violations.

Duncanville insurance attorneys need to know how to properly sue an insurance adjuster who improperly adjusts a claim. This issue was brought in a U.S. District Court, Dallas Division opinion. The style of the case is, The Denley Group, LLC v. Safeco Insurance Company Of Indiana and Lisa Seutter.

After a fire loss, Denley sued Safeco and Seutter for wrongful denial of full coverage stained to their insured property.

The lawsuit was filed n Dallas District Court for violations of Chapters 541 and 542 of the insurance code and other causes of action. Safeco had the case removed to Federal Court, asserting that Seutter had been improperly joined in the lawsuit.

Fort Worth insurance lawyers have to be able to answer the question – What if there is a misrepresentation in an insurance application. The Dallas Court of Appeals helped give guidance to an answer in a case styled, Medicus Insurance Company v. Frederick Todd, II, M.D. This was an appeal by Medicus in a take nothing declaratory judgment.

Medicus provides medical malpractice insurance for physicians and health care practitioners. The company began selling insurance in September 2006. Its business plan is to keep its costs low by offering insurance at low premiums only to physicians with few claims, generally fewer than five claims.

Dr. Todd handled his malpractice insurance through his insurance broker, Larry Zimmer. When Dr. Todd applied for insurance in October 2006, Medicus did not ask him to fill out its nineteen-page application. Instead, it permitted him to submit only its two-page application and the Texas Standardized Credentialing Application, a form that physicians use to receive credentials to practice in a particular hospital. Dr. Todd sent Medicus a credentialing application he had signed on May 4, 2005. The credentialing application asked if Dr. Todd had “ever been the subject of an investigation by any licensing authority,” and he checked the “No” box. In fact, Dr. Todd had been twice investigated by the Texas Medical Board for having three or more medical malpractice claims in a five-year period. The credentialing application also asked if he had “ever had any malpractice actions within the past 5 years pending, settled, arbitrated, mediated or litigated,” and appellant checked the “Yes” box and attached a description of four lawsuits filed against him between May 2000 and when he signed the application in May 2005. Dr. Todd omitted one lawsuit from the list of claims filed between May 2000 and May 2005. Dr. Todd also failed to disclose another lawsuit filed between his signing the credentialing application and his applying to Medicus.

Fort Worth insurance lawyers will not see as many flood claims as attorneys along the Texas coast but they still need to have some knowledge of how they work. The United States District Court, Galveston Division, issued an opinion and order in a dispute concerning a National Flood Insurance Policy. The style of the case is, Afredo Mamani and Patricia Gonzalez v. AIG National Insurance Company, Inc.

Before the Court was a Motion for Summary Judgment filed by AIG. The motion sought to dismiss Mamain and Gonzalez (Plaintiff”) complaint based on a statute of limitations defense.

Plaintiffs’ residential rental property was damaged by flood waters during Hurricane Ike. At the time, the property was insured under a Standard Flood Insurance Policy issued by AIG, a WYO carrier under the National Flood Insurance Program. AIG sent an adjuster to the property. The adjuster spoke with Mamani and the tenants who had remained during the hurricane. After examining the claimed flood damages the adjuster determined that any covered damage was insufficient to meet the Plaintiffs’ deductible. Consequently, AIG made no payment under the policy.

Grand Prairie insurance lawyers will have situations where a man and woman live together and have an insurance claim. It usually has to do with a life insurance policy claim but can be any type of insurance. When it comes to insurance benefits, the issue will be one of whether or not one of them is entitled to benefits as a spouse of the other.

The Austin Court of Appeals issued an opinion related to a “common law marriage” that needs to be understood. The style of the opinion is, Karen Kuester v. Ivor Green.

This is appeal by Kuester from a summary judgment in favor of Green.

Carrollton insurance lawyers need to make sure when a client is filing an insurance claim that the claim is a written claim for benefits. Most insurance companies will take an oral claim report but at least one court in Texas is requiring that a notice of claim be in writing. This is the situation in a 2005, Austin Court of Appeals opinion styled, McMillin v. State Farm Lloyds.

The claims underlying this appeal arose while the McMillins were renovating their house. The McMillins had removed a portion of the roof and covered the opening with tarp. On October 6, 2000, a storm hit and the tarp failed to prevent water from entering the house. The McMillins filed a claim with their homeowners’ insurance carrier, State Farm, and, within a few days, State Farm made a payment of $2508.35 for viewable damage. Later that same month, after additional inclement weather, the McMillins reported additional water damage, along with mold growth throughout the house. Unlike the case with the McMillins’ initial claim, several months passed before State Farm paid the second claims. On March 1, 2001, a mold remediator sent a fax to State Farm opining that remediation was so expensive that it was no longer cost-effective; State Farm did not share that estimate with the McMillins. On August 7, 2001, a week after getting another estimate from the mold remediator, State Farm paid $344,367.27 to the McMillins on their claim of water damage resulting in mold; thus, State Farm paid $346,875.62 to compensate the McMillins for their covered losses, an amount that excludes the $1000 deductible. By August 2001, the McMillins had purchased another home and moved there, partly in order to enable their planned adoption of a child to move forward.

The McMillins sued State Farm for among other things, violations of the Texas Prompt Payment of Claims Act.