Articles Posted in General

Most insurance lawyers like to think they can discuss insurance issues with their clients. Keeping informed as to what is happening in the insurance world allows that to be done. The New York Times published an article in February 2016, that has to information that can be helpful. The title of the article is, Some Auto Insurance Premiums Penalize Home Renters, Study Finds.

What does owning a home have to do with car insurance? Quite a bit, when it comes to the rates consumers pay for auto coverage, a new analysis finds.

Consumers pay about 7 percent more on average for annual car insurance premiums if they rent their home rather than own it, even if they have stellar driving records, according to the Consumer Federation of America‘s analysis of premium quotes from the major auto insurance companies.

Insurance lawyers will often times find themselves in Federal court. When this happens it is necessary that the lawsuit pleadings be in proper form. An opinion from the Sherman Division of the Eastern District of Texas is instructive. The style of the case is, Cathy Broxterman v. State Farm Lloyds.

This case arises out of a dispute between a policyholder and her insurer regarding the extent of damages and amount of loss suffered to her property. State Farm issued a homeowners’ policy to Plaintiff, effective December 1, 2003, through December 1, 2014. On or about April 3, 2014, the Property suffered damage due to storm-related conditions.

On or about April 26, 2014, prior to reporting her claim to State Farm, Plaintiff signed document for representation by her public adjuster, John Bellerose, and the Voss Law Firm, to whom Bellerose referred her. On May 1, 2014, Bellerose’s company, Aware Owner, issued an estimate for the storm damages totaling $15,015.09. On or about May 27, 2014, Jesse Corona of the Voss Law Firm reported Plaintiff’s insurance claim to State Farm.

Arlington attorneys handling claiming involving “loss of use” have long had to tell clients the following: “If your car is repairable, the insurance company will pay for the loss of the use of the car for as long as the car is reasonably in the shop being repaired. But if your car is a total loss, there is no recovery for the time you are without the use of the car.” This loss of use normally involves payment of the cost of a comparable rental car. However, if the car is used for business purposes, it also involves the income lost. An example might be a car used for delivery purposes.

A new case from the Texas Supreme Court has changed this law. The case is styled, J&D Towing, LLC v. American Alternative Insurance Corporation. This case will be told in two parts. Today, is the set-up and next will be the case law.

Nearly a century ago, a Texas attorney argued that the rule at issue in this case made it “cheaper to kill a mare in Texas than it is to cripple her.” No American Pharoah herself, (American Pharoah became the first horse since 1978 to sweep the Triple Crown) this one-eyed, underfed mare lived a simple life. One night, however, she was caught roaming the city streets in search of food and was placed in the city pound. Her owner failed to pay her board bill. Thus, the city marshall hired a man known as Panhandle Pete to put her out of her misery. As the court of appeals then put it, “when Panhandle Pete’s pistol popped, she petered, for which the pound-keeper paid Pete a pair of pesos.” Her owner protested her death and sued for damages, including $350 for the loss of her services in his occupation of hauling. The court rejected that claim, holding that although “damages occasioned by the loss of the use and hire of an animal are recoverable where the animal is injured,” “no such damages are recoverable for the total loss or death of an animal.” Rather, the measure of damages in the case of a wrongful killing of an animal is its market value, if it has one, and if not, then its actual or intrinsic value, with interest.” That rule, the owner’s attorney responded, makes it “cheaper to kill a mare in Texas than it is to cripple her.”

Irving insurance lawyers and all insurance lawyers want to spend their time suing insurance companies that commit wrongs against their customers. In doing this, one has to be aware of situations where the customer is the one committing fraud on an insurance company. Otherwise, a lot of time and effort can be spent on a losing case.

The Claims Journal ran an article titled, “Worst Insurance Fraud Scams of 2014” that is interesting. Here are highlights.

A driver rockets his $1-million Bugatti into a salty lagoon … Two kids perish in a home insurance arson their own mother set … A cancer doctor pumps healthy patients with toxic chemotherapy in a $125-million insurance plot.

The Texas Tribune published an article titled, Prosecutors, Insurer Change Controversial Funding Deal. Texas attorneys and all people who buy insurance should sense there was something wrong with this deal.

Responding to a flood of criticism about its unusual financial arrangement with a large insurance company, the Travis County District Attorney’s Office is dramatically restructuring its workers’ compensation fraud unit and implementing new safeguards against potential abuse and conflicts of interest.

The changes come in the wake of a series of reports by The Texas Tribune and the Austin American-Statesman that raised questions about the cozy relationship between government prosecutors and Texas Mutual Insurance Company, the state’s largest provider of workers’ compensation policies.

Duncanville insurance lawyers keeping abreast of insurance laws may find this article from the Insurance Journal interesting. The title is, “Best, Worst States For Insurance Regulation.”

Vermont, Utah, Iowa, Virginia and Kentucky get an “A” and North Carolina an “F” in one think tank’s annual grading of states on how they regulate the property/casualty insurance industry.

The 2015 Insurance Regulation Report Card, the R Street Institute’s annual publication, assigns scores in 10 different areas including solvency monitoring, anti-fraud efforts, rating and underwriting freedom, minimizing politicization of regulation, consumer protection and fostering competitive markets.

Dallas area insurance lawyers need to read a Texas Supreme Court, 2014 opinion. It is styled, In re Essex Insurance Company.

This is a mandamus proceeding wherein the Court reaffirmed Texas’s “no direct action” rule barring third-party plaintiffs from suing a tortfeasors’s liability insurance company directly until the tortfeasor’s liability has been finally determined by agreement or judgment. In this case, Rafael Zuniga sued San Diego Tortilla (SDT)) after a serious injury sustained while operating a tortilla machine. SDT’s liability insurance company, Essex, agreed to defend SDT, subject to a reservation of rights to deny coverage based in part on an exclusion for bodily injury to the named insured’s employees. Zuniga and SDT asserted that Zuniga was working as an independent contractor.

After Essex rejected Zuniga’s offer to settle for policy limits, Zuniga filed an amended petition adding Essex and seeking a declaration that the policy requires Essex to indemnity SDT for its liability to Zuniga. Essex filed to dismiss the claims against it under Texas Rule of Civil Procedure 91a, arguing that the “no direct action” rule, Zuniga’s lack of standing, and lack of ripeness bar Zuniga from suing Essex until SDT’s liability has been determined. The trial court denied the motion to dismiss. Essex filed a petition for writ of mandamus, which the appeals court denied, but which this court granted.

Lawyers handling insurance cases are aware of clauses in the insurance contract that are different from other types of contracts. The Claims Journal published an article in November of 2015, that discusses “other insurance” clauses. The title of the article is, “Insurance Policy ‘Escape” Type ‘Other Insurance’ Clause Given Short Thrift by California Court.”

An insurer is ordinarily free to restrict the risks it will underwrite and is responsible only for losses within the coverage wording of its policies of insurance. The courts at least say they will not rewrite the terms of a policy for any purpose, including to make them conform to judges’ notions of sound public policy. For judges to do so would exceed their authority. In brief, plain policy language limiting coverage must be respected by the courts.

But – and in law there seems always to be a “but” — an exception to these general rules of policy wording enforcement is recognized regarding “other insurance” clauses generally and “escape” other insurance clauses in particular. “Escape” clauses purport to provide that coverage evaporates in the presence of other insurance, departing from the historical purpose of “other insurance” clauses – to prevent multiple recoveries when more than one policy provided coverage for a particular loss. Partly because “escape” clauses are objects of judicial distrust, the modern trend is to require multiple insurers on a single risk to contribute on a pro rata basis regardless of the type of “other insurance” clauses in their policies.