Articles Posted in Insurance Agents

Residents in Weatherford, Mineral Wells, Millsap, Hudson Oaks, Aledo, Willow Park, Brock, Cool, Springtown, and other places in Parker County might wonder if what their insurance agent tells them is true. Or, if what the agent says is not true?

Most insurance agents are honest. However, there are a few that are not completely honest because they want to sell you a policy in order to make their commission on the sell. Others are confused or do not completely understand the insurance product they are selling. The question becomes; what can be done when the agent makes a mistake in what he tells someone when he sells the policy?

The answer often times depends on the authority of the agent.

Insurance agents in Weatherford, Mineral Wells, Aledo, Willow Park, Hudson Oaks, Azle, Millsap, Brock, Cool, Springtown, or anywhere else in Parker County will make mistakes. The question becomes: What can be done about it?

A 1979, Texas Supreme Court case is still good law for that question. The style of the case is, “Royal Globe Insurance Company v. Bar Consultants, Inc.”

The principle question in this case was whether or not a misrepresentation about coverage afforded by a policy of insurance, made by the insurance company’s local recording agent, was a deceptive trade practice under Texas statutes for which the insurance company as principle is liable. This court said yes. Further, the Texas Insurance Code now makes the company liable for the acts of the agent.

An insurance agent in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Willow Park, Pool, Millsap, Brock, Azle, Peaster, and other places Parker County and Texas can be liable for failing to provide you with the insurance you have requested, plus the insurance company can be liable for the agent.

The Texas Supreme Court issued an opinion in 1994, in the case, Celtic Life Insurance Company v. John D. Coats. This case serves as an example how an insurance company can be found liable for the actions of the agent when the agent commits something wrong in selling an insurance policy. Here is some legal and factual background.

The case presented two relevant issues relating to an insurance company’s liability for its agent’s representations. First, whether the company’s liability depends on its authorization of misrepresentations; second, whether reliance on the representations is an element of recovery.

An insurance agent in Grand Prairie, Arlington, Hurst, Euless, Bedford, Fort Worth, Dalworthington Gardens, Mansfield, Crowley, or anywhere else in Tarrant County or Texas is capable of making a mistake. But what if the mistake results in one of his customers not having the coverage they need when a claim occurs?

This situation came up in the Fourteenth Court of Appeals case styled, West Houston Airport, Inc. v. Millennium Insurance Agency, Inc. The opinion in this case was issued on in 2010 and the opinion was essentially upheld by the Texas Supreme Court in August 2011.

The facts in this case are not in dispute. However, they are pretty involved and are hard to follow. Rather than spending several pages trying to make the facts understandable, what needs to be learned or realized from the case is the duty an insurance agent owes to one of his customers when it comes to procuring insurance for that customer.

How does a person in Grand Prairie, Arlington, Mansfield, Hurst, Euless, Bedford, Fort Worth, Burleson, or anywhere else in Texas know when their insurance agent or insurance company has committed an act of negligence? This is a fair question and maybe this article will give you something to think about.

Insurance companies and insurance agents do not have a general duty to obtain coverage or to make sure the coverge they get for you is adequate. On the other hand though, courts have found insurance companies and insurance agents liable for affirmative misrepresentations, and the courts have stated that an insurance agent who undertakes to procure insurance for someone owes a duty to a client to use reasonable diligence in attempting to place the requested insurance and to inform the client promptly if unable to do so. This was discussed in the Texas Supreme Court case, May v. United Services Association of America, in 1992. Also, this issue was discussed by the Court of Appeals in Houston, in the 1999 case, Frazer v. Texas Farm Bureau Mutual Insurance Company. In Frazier the court allowed Frazier to go forward with his claim against Texas Farm Bureau Insurance Company and his agent where it is alleged he asked his agent to raise his coverage limits and the agent failed to do so.

The Texas Supreme Court in the case, Kitching v. Zamora, in 1985, stated an agent has a duty to keep the customer informed about the insurance policy’s expiration date when the agent receives information pertaining to the expiration date that is intended for the customer. This was restated by the Texas Court of Appeals of Amarillo, in 1992, in the case Horn v. Hedgecoke Insurance Agency.

Whether your agent is in Grand Prairie, Arlington, Mansfield, Richardson, Plano, Fort Worth, or anywhere else in Texas, he has duties he owes to his insurance clients. So, what are an agents duties?

For starters, insurance agents do not have a general duty to obtain coverage nor to make sure any coverage you get is adequate. On the other hand, courts have found insurers liable for affirmative misrepresentations, and an insurance agent who undertakes to procure insurance for another owes a duty to a client to use reasonable diligence in attempting to place the requested insurance and to inform the client promptly if unable to do so. This is discussed in the 1992, Texas Supreme Court case, May v. United Services Association of America.

What if the notice of expiration on an insurance policy is sent to the agent rather than to the policy holder it was intended for? Then the agent is responsible for forwarding that information. This was the issue in Kitching v. Zamora and Horn v. Hedgecoke Insurance Agency.

Let’s say your insurance agent is in Aledo, Arlington, Azle, Grand Prairie, Fort Worth, Mansfield, Weatherford, or anywhere else in Texas. Now, let’s say he does something wrong in the way he handles your insurance needs. Can he be held liable for what he does or fails to do for you?

The answer is yes. An agent can be held accountable on a number of different theories of law related to insurance. He can also be held accountable under the most fundamental of legal theorys, that being “negligence.”

The Lectric Law Library defines negligence as, “The failure to use reasonable care. The doing of something which a reasonably prudent person would not do, or the failure to do something which a reasonably prudent person would do under like circumstances. A departure from what an ordinary reasonable person would do in the same community.”