Articles Posted in Credit Life and Disability Policies

Credit policies sold in Grand Prairie, Arlington, Mansfield, Fort Worth, Dallas, or any other place in Texas are regulated by the Texas Department of Insurance and the Texas Insurance Code. This means that when one of the policies are denied when an application for benefits is made, that an experienced Insurance Law Attorney should be consulted so that a beneficiary’s rights are not wrongfully denied.

Here is a case that was strange.

This is a 2001, case that was decided by the Beaumont Court of Appeals. The style of the case is, Paula Guillory v. Service Life and Casualty Insurance Company. Here is some of the background on the case.

Car buyers in Grand Prairie, Arlington, Fort Worth, Mansfield, Dallas, Mesquite, Garland, and other places in North Texas should be interested in this case.

The case is from 1996, and was decided by the Austin Court of Appeals. The style of the case is, American National Insurance Company and Heart of Texas Dodge v. Rosemary Paul and Don Paul. Here are some of the facts.

On February 16, 1993, the Pauls purchased a van from Dodge. Before this date, Mr. Paul negotiated the purchase terms of the van with one of Dodge’s agents. Mr. Paul asked the sales agent whether the purchase price included credit disability insurance. The agent responded that he did not know. Beyond this inquiry there was never any discussion of whether credit disability insurance was to be included in the transaction.

Most people in Grand Prairie, Fort Worth, Bedford, Euless, Hurst, Grapevine, and other places in Tarrant County would not know exactly how credit policies work. Insurance companies have in the past, tried to say that these “credit policies” are not regulated by the Texas Department of Insurance.

An opinion issued in 2003, declares that these credit life and health policies are regulated by the Texas Department of Insurance. The case is, Service Lloyds Insurance Company v. Jose Montemayor, Commissioner of Insurance, and the Texas Department of Insurance. Here is some background.

The case was decided by the Austin Court of Appeals, and was an appeal from a judgment affirming an order of the Texas Department of Insurance (TDI).

When someone in Grand Prairie, Arlington, Fort Worth, Saginaw, Roanoke, Keller, Rhome, Colleyville, and other places in Tarrant County and Texas purchase something on credit or take out a loan, they will often times have the option of purchasing some sort of credit life and disability insurance. Here is a case dealing with what happened in one situation where this was done.

The style of the case is Norman v. League City National Bank and Life of America Insurance Company. This is a 1998, Houston Court of Appeals (1st Dist) case. Here is some background.

Mr. Norman applied for and obtained two loans from the Bank. In connection with the loans, he applied for and obtained credit life insurance from Life of America Insurance Company. Mr. Norman died before making any payments on either loan. The Bank submitted a claim to Life of America, but the claim was denied. The Bank then filed suit against Life of America for payment under the insurance policies. The bank also filed suit in probate court against Mr. Norman’s estate and Mrs. Norman for payment of the loans. Mrs. Norman then filed suit against the Bank and Life of America asserting claims under the Texas Insurance Code, the Texas Deceptive Trade Practices Act, (DTPA) and for breach of warranty. All actions by all parties were consolidated in the probate court.

When someone in Grand Prairie, Fort Worth, Dallas, Benbrook, Crowley, Cedar Hill, Newark, Cedar Hill, Weatherford, Aledo, Azle, Lake Worth, or anywhere else in Texas buys a car or truck on credit, the dealership will always offer the purchaser the option of getting a credit life and disability insurance policy. The purpose of this type of insurance policy is to pay off the loan if the purchaser dies before paying off the loan or makes the loan payments if the borrower becomes disabled while the debt is still owing.

A case from the Court of Appeals of Georgia issued an opinion on June 30, 2010, where this type of policy was the subject of a lawsuit. The style of the case is Resource Life Insurance Company v. Buckner et al. This was a class action lawsuit.

Here is some background. In early 2001, Dorothy Buckner purchased a car and financed it with a loan. As part of that transaction, Buckner bought both a credit life and a credit disability insurance policy from Resource Life Insurance Company (Resource). In November 2001, Buckner’s automobile was totaled and her debt on the car was extinguished, thereby triggering the automatic cancellation of the Resource policies. At that time, Resource owed Buckner a refund of her unearned premium in the amount of $1,213.60. Based upon an alleged mathematical error by the automobile dealer who issued the refund on Resource’s behalf, Buckner did not receive the entire amount she was owed.

Most every person in Grand Prairie, Arlington, Mansfield, Fort Worth, Bedford, Mesquite, De Soto, Duncanville, Weatherford, or anywhere else in the State of Texas, has at one time or another purchased something on credit. Many times when a credit purchase is made a person will have the opportunity to purchase some sort of insurance that will pay the debt in the event that you become disabled or killed before the debt is repaid.

Almost all credit card companies will offer credit life and disability for a few extra dollars each month and charged a fee based on the total amount of the debt due on your credit card. The payment for this insurance is going to be charged and included in your credit card payment. Another place most people will see this type of insurance being offered is with a home purchase. If you do not purchase this option when you purchase the home, you will receive numerous solicitations in the mail offering this insurance to you. Another time a person is almost always requested to purchase this type of insurance is when an automobile purchase is made on credit. If this type of insurance is purchased in a car transaction it is going to be at the point of sale and is usually a lump sum and rolled into the loan for the vehicle.

Texas laws exist to regulate credit life and disability policies in Texas. The chapter of the law dealing with this is cited as the Act for the Regulation of Credit Life Insurance and Credit accident and Health Insurance.