Articles Posted in Home Owners Policies

When two elements combine to cause damage, one being covered and the other not covered, issues arise regarding whether the loss is covered, and who bears the burden of proof to allocate causation between the covered cause and the excluded cause.

Courts have held that the insurance company will only be liable for that portion of the damage that was caused by a covered event.  In the 1999, San Antonio Court of Appeals opinion, Wallis v. United Services Automobile Association, the court noted that a “straight Balandran analysis” would not apply in a situation involving multiple causes.  Thus, as a practical matter, the practitioner must evaluate the claim underlying any lawsuit to determine if it involves allegations of damage allegedly attributable to multiple causes or simply one peril deemed to have caused the entire loss.

When covered and excluded perils combine to cause an injury, the Texas Supreme Court has held that the insured must present some evidence affording the jury a reasonable basis on which to allocate the damage.  This is seen in the 1993 opinion, Lyons v. Millers Casualty Insurance opinion and in the 1965 opinion, Paulson v. Fire Insurance Exchange opinion.

News from Law 360.  While some Texas lawyers are encouraging property owners to quickly lodge claims for Hurricane Harvey damage before a new state property insurance law takes effect on Friday, the reality is that the potential downsides of the legislation — including a lower interest rate on successful lawsuits against insurers — don’t warrant such swift filings, several attorneys told Law360.

Starting at the beginning of the week, a slew of law firms began to issue alerts on social media platforms recommending that homeowners and business owners file claims for Harvey losses with their insurers prior to the Friday effective date of House Bill 1774, which Gov. Greg Abbott signed into law in May.  Among other things, the law reduces from 18 percent to about 10 percent the amount of prejudgment interest an insurer must pay if it is found to have delayed payment on or wrongfully denied a meritorious claim.

Opponents of HB 1774 say the law scales back important deterrents for insurers to comply with statutory deadlines for responding to and paying claims for losses tied to natural disasters.  As such, some attorneys say, property owners would be well-served to file Harvey claims before the new law takes effect, so that if those claims wind up in litigation down the road, they will still be subject to current law.

Stephenville homeowner lawyers need to read this opinion from the United States 5th Circuit Court of Appeals.  The opinion is styled, State Farm Fire & Casualty v. Cedric Flowers.

This is a appeal from a summary judgment granted in favor of State Farm in a declaratory judgement action.

In 2008, Cedric and Renee Flowers purchased a plot of land and asked Ricky and Jennifer Scott to build a house for them on the property.  The Flower’s were unable to get financing, so they quit claimed the property to the Scotts, who then obtained a construction loan under their own names, using the property as collateral.  The property was to be conveyed back to the Flowers after the house was built.  The Scotts eventually defaulted on the loan amid disputes with the Flower’s and a lawsuit resulted over the property.

House fire claims being denied is a regular part of doing for insurance law lawyers.  “The Tribune” published a story in March titled, Tracking Phones: Insurers Deny Claims Based On Doubtful Data.  Here is what the story tells us.

It took Jaclyn Bentley nearly three years to prove she didn’t burn her house down for the insurance money, allegations she and her lawyer say were born of the junk practice of analyzing cellphone tower data.

She was camping with her husband and co-workers at least 17 miles from her Iowa home in May 2014 when it burned down, she says.  An investigator for State Farm Fire said cell tower data showed Bentley’s phone was 5 to 12 miles from the campsite in the direction of her home just after the fire was reported – the suggestion being she could have been heading back to camp after starting the blaze.

Coastal Texans – you have to know your flood insurance policies.  This is perfectly illustrated in a 2016, Southern District, Galveston Division, opinion.  It is styled, Lobeck v. Licatino, et al.

The case was decided on a summary judgment.

In a nutshell, Lobeck bought property that, unknown to her, was located within the boundaries of the Coastal Barrier Resources System (CBRS).  Lobeck’s mortgage loan required her to maintain flood insurance on the property so she innocently procured an NFIP through the Defendants in this case.  The policy was subsequently reissued and then renewed the following year.  During the renewal year Hurricane Ike completely destroyed the building on the property and only then was Lobeck informed that her policy was void and had never afforded overage.  She received nothing for her property damage.  Consequently, Lobeck filed suit alleging that the Defendants knew or should have known that the property was ineligible for flood insurance under the NFIP, that the policy was void when issued, and that the policy offered absolutely no coverage.  According to Lobeck, the express and implicit misrepresentations of the Defendants, upon which she ignorantly, but reasonably relied, caused her losses.