A Fort Worth insurance attorney will want to know about specific cases and the way the courts handled the cases. Here is an example of a case that is not seen very often.
The style of the case is, Bekins Moving & Storage Co. v. Williams. This is a Texarkana Court of Appeals case. The opinion was issued in 1997.
Here is some of the relevant information:
Fort Worth insurance law attorneys need to know what insurance companies fall under the Prompt Pay statutes of the Texas Insurance Code.
The Prompt Payment of Claims Act applies to all insurance companies, except those specifically exempted. The statute provides the following exemptions:
1) a stock life, health, or accident insurance company;
Fort Worth insurance lawyers should be able to discuss with their clients when a claim is not being paid timely and who can hold the insurance company for failing to pay the claim in a timely manner.
Under the Prompt Payment of Claims statutes, Section 542.051 tells us a “claimant” is the person “making a claim.”
A claim is a first party claim that is made by an insured or a policyholder under an insurance policy or contract or by a beneficiary named in the policy contract, and that must be paid by the insurance company directly to the insured or beneficiary.
Dallas insurance attorneys should know about the Prompt Payment of Claims Act. It is found in Chapter 542 of the Texas Insurance Code.
This statute imposes 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 fees and an additional 18% per annum in addition to the amount of the claim. The time periods stated in the statute are subject to being very short or very long in the context of how long it actually is takes for an insurance company to pay a claim before having penalties imposed.
Keep in mind that the time limits apply only to first party claims – not third party claims.
Fort Worth insurance lawyers should know about insurance policy provisions that require an examination under oath (EUO). The Houston Court of Appeals [14th Dist.] issued an opinion in May 2013, that helps to understand the process. The style of the case is, Arman A. Shafighi v. Texas Farmers Insurance Company.
Here is some of the relevant information:
Shafighi sued Farmers when it denied his claim for fire damage to his house. The trial court granted summary judgment to Farmers, concluding that Shafighi could not recover because he failed to participate in a sworn examination as part of Farmers’ investigation. Because the insurance policy at issue permits Farmers to abate the case until Shafighi complies with the relevant policy provisions, but does not entitle it to summary judgment under these circumstances, this appeals Court reversed and remanded.
Mineral Wells attorneys who handle insurance claims need to be aware of the laws regarding the payment of insurance claims.
The Texas Insurance Code, Sections 542.051 – 542.061 is known as the Prompt Payment of Claims Act. These sections detail the time limits insurance companies have for responding to and paying a claim. The time limits will vary with the type of claim and the circumstances of the claim. The rules can be confusing. But what is important is that the Prompt Payment of Claims Act also sets the penalties for an insurance company failing to follow the rules. These penalties include not only having to pay the claim but to pay the court costs and attorney fees involved in getting the claim paid. As extra punishment for failing to follow the rules the insurance company is liable of an additional penalty of 18% owed on the claim. This 18% would be in addition to the 5% prejudgment interest that accrues on a judgment.
The United States District Court for the Southern District of Texas, Galveston Division issued a report and recommendation in April of 2013, dealing with the Prompt Payment of Claims Act. The style of the case is, Pointewest Center, LLC. v. National Surety Company and here is some of the relevant information.
Fort Worth insurance lawyers and those in Lake Worth, Saginaw, North Richland Hills, and other parts of Tarrant County need to know the rules governing how an insurance company is suppose to pay a claim.
The Insurance Law Section of the State Bar of Texas published an article that is informative on this subject. It tells us how to calculate the 18 percent statutory damages available under the Prompt Payment of Claims Statute.
The 18 percent penalty is found in the Texas Insurance Code, Section 541.060. The sections 542.051 through 542.061, establish the procedures for determining when first party claims are to be paid. Timetables are set out. These timetables will vary with the facts of the case. The remedies available against insurance companies for violations of the statute provide as follows:
Fort Worth insurance attorneys and those in Arlington, Burleson, Benbrook, Grapevine, Saginaw, Lake Worth, Crowley, and other places in Tarrant County need to know when an insurance company can be held liable for a delay in paying a claim.
The Texas Supreme Court issued an opinion in 2004, that deals with this issue. The style of the case is, Republic Underwriters Insurance Company v. Mex-Tex, Inc. Here are some of the facts:
Following a May 25, 1999 hail storm in Amarillo declared by the Texas Department of Insurance to be a weather-related “catastrophe for the purpose of claims processing”, Mex-Tex, Inc. notified its property insurer, Republic Underwriters Insurance Co., of damage to the roof of Signature Mall, a retail shopping center that Mex-Tex owned. Mex-Tex claimed that the roof had been destroyed and should be replaced. Republic immediately investigated the claim but disputed the amount of damage attributable to hail. The roof had leaked for a long time, and months before the storm Mex-Tex had obtained estimates to replace it. While Republic was still investigating the claim, it learned that Mex-Tex had retained a contractor to go ahead, without waiting on Republic, and replace the roof at a cost of $179,000 with one of the same kind, but which would be fixed to the building mechanically rather than by ballast as the old roof had been. Republic’s first response was to offer what it believed was the cost to repair the minimal hail damage, $22,000, as what it termed “partial payment” of Mex-Tex’s claim, but when Mex-Tex rejected that offer, Republic sent Mex-Tex a check on August 20, 1999, including $145,460, an amount representing what Republic’s engineer had determined was the cost of replacing the mall’s roof with an identical one, attached by ballast.
Most people in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, and other places in Parker County would have a hard time understanding what constitutes “bad faith” in insurance. But most would believe that being late in paying a claim is bad faith. That does not appear to be the case.
The United States 5th Circuit made a ruling in a case in 1997, that addresses this issue. The style of the case is Higginbotham v. State Farm Mutual Automobile Insurance Company. Here are some of the background facts.
Higgnbotham’s Porsche was stolen on June 8, 1993, from an unsecured parking lot next to his residence. The car was later recovered that day but it had been stripped of its top, seats, interior and exterior trim but was not damaged or destroyed with regard to mechanical connections, wiring harnesses or the engine. Higginbotham reported the theft to State Farm on June 9, 1993. State Farm denied his claim five months later on November 19, 1993.
Insureds in Grand Prairie, Fort Worth, Hurst, Euless, Bedford, Grapevine, Saginaw, Rhome, Lake Worth, Burleson, and other places in Texas have very little knowledge of the remedies available to them when their insurance company refuses to defend them in a law suit. One of those remedies might surprise them.
This surprise can be found in a case styled, Luxury Living, Inc. v. Mid-Continent Casualty Company. This is a 2003, case heard by a Federal Court in the Southern District of Texas. Here are some of the facts:
Luxury Living, Inc., a home builder. was sued by a homeowner alleging defects in construction that resulted in physical injury to the home. Mid-Continent refused to defend Luxury Living on the ground that the claim asserted by the third-party homeowner was not covered by the insured’s commercial liability policy. The insured, Luxury Living, filed this action seeking declaratory judgment that the insurer, Mid-Continent, has a duty to defend the insured and for damages, including reimbursement of the insured’s defense costs to date, 18% statutory penalty on those costs for wrongful denial of the claim, and attorney fees to date. The insurer responded that because the homeowner’s claims were not covered by the policy, the duty to defend was not triggered. Additionally, the insurer asserted policy exclusions that preclude coverage for damages arising out of installation of the Exterior Insulation Finish System (“EIFS”). Finally, the insurer argued that statutory penalties do not apply to third-party claims. Both sides moved for summary judgment.
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