Insurance Agents

Insurance Agents Who Cheat

May 8, 2016 | Mark S. Humphreys

Fort Worth insurance lawyers will usually have a story to tell about an insurance agent they caught cheating. The Insurance Journal published a story in April 2016, that should make all insurance consumers beware. The title of the story is, Former Oklahoma Insurance Agent Pleads Guilty To $500K Scam.

A former insurance agent in Oklahoma has pleaded guilty to scamming $505,126.43 from his clients, the Oklahoma Insurance Department announced.

A joint investigation including the OID’s Anti-Fraud Unit led to the charges against Gary Edward Hibbing, 52, formerly of Grove.

Suing An Agent

April 9, 2016 | Mark S. Humphreys

Mansfield insurance attorneys understand the Texas Insurance Code definitions to be used and how they apply when suing an insurance agent. A 1997, Texas Supreme Court discusses this. The style of the case is, Liberty Mutual Insurance Company v. Garrison Contractors.

The primary issue in this case is whether an insurance agent employed by an insurance company is a “person” under section 541.002 of the Texas Insurance Code. The court of appeals held that Robert Garrett, a Liberty employee-agent, was a person under that provision, and accordingly subject to suit under the Insurance Code. This Court affirmed that decision.

The Court granted Liberty and Garrett’s application for writ of error primarily to consider whether an insurance company employee is a “person” under the Insurance Code.

Misrepresentation Defense By Insurance Company

March 12, 2016 | Mark S. Humphreys

Insurance attorneys in Texas need to know how the “misrepresentation defense” works. A good illustration in found in this January 2016, opinion from the Waco Court of Appeals. The case is styled, Karl Wallace v Amtrust Insurance Company of Kansas, Inc.

Until the time of his death in 2007, Wallace’s father lived on property located at 1100 Lone Oak Drive in Oakhurst, Texas–a few hundred miles from Fort Worth, Texas. This property included both a mobile home and 130 acres of land. Because he had been granted a life estate in the property, Robert Guenther began living in the mobile home until he died in 2009. Wallace, a resident of Fort Worth, subsequently took sole ownership of the property in late 2009.

Realizing that the property was left vacant and that the mobile home was deteriorating, Wallace decided to sell the property. However, to protect his interest in the interim, Wallace contacted John Cole Insurance Agency, Inc. to procure insurance. Wallace transacted with Cole because Cole’s company had insured the property for Wallace’s father.

Agents And Cheaters

December 27, 2015 | Mark S. Humphreys

Attorneys who handle many insurance cases can tell stories of clients being ripped-off by insurance agents. Some pocket premiums rather than send the premiums to the insurance company. Some forge signatures on applications. Some fill out false information on applications without telling their customer. Some tell you that you have the coverage you are requesting when you do not.

Having said the above, the vast majority are honest hard working people. The problem is the few who are crooks. The Insurance Journal will report on cases where a person tries to take advantage of an insurance company. But the Insurance Journal will also report on agents who take advantage of their customers. A recent article is titled, Michigan Insurance Broker Sentenced on Racketeering Charge.

A Troy, Mich., insurance broker was sentenced last week to 14 months to 20 years in prison on one count of racketeering, the state attorney general’s office announced.

Insurance Agent Committing Fraud

November 10, 2015 | Mark S. Humphreys

Dallas area insurance lawyers can tell lawsuit stories where they have represented clients who have been ripped of and cheated by insurance agents. The Insurance Journal published a story in October of 2015, that was an article about an agent getting caught stealing from his customers. The title of the article is, Former Southern California Insurance Agent Sentenced For Felony Fraud.

Hesham Saleh Ibrahim, 57, of Palmdale, Calif., pleaded no contest to felony insurance fraud and was sentenced to three years felony probation, 30 days community labor and ordered to pay nearly $1,000 in restitution and fines. Ibrahim was an insurance agent licensed to conduct business in California.

Ibrahim was charged in July 2015 with six misdemeanor counts of transacting insurance without a license for issuing 114 auto insurance policies. He was also charged with one count of felony insurance fraud for issuing a fraudulent insurance certificate for a $2 million commercial liability policy and pocketing the $350 premium.

Insurance Agent Getting Insurance For Their Customer

October 22, 2015 | Mark S. Humphreys

Mineral Wells insurance lawyers will have situations wherein the agent may have made a mistake in getting insurance for one of their customers. The 11th Court of Appeals issued an opinion in 2015, that provides some insight into how courts examine claims made against insurance agents. The style of the case is, Spurlock v. Grantham-Adkins Insurance Agency. There are other issues in this case, but only the issue related to insurance agent responsibilities will be discussed.

J.O. Spurlock died. Kelly Spurlock, representative of the J.O. Spurlock estate sued the insurance agency for negligent procurement of an insurance policy.

J.O.’s home, after his death, had personal property stolen from it. Kelly made a claim for benefits from the insurance company that was denied due to there being no coverage for the loss that had occurred.

Excluded Drivers On The Insurance Policy

October 10, 2015 | Mark S. Humphreys

Benbrook insurance attorneys know to check auto insurance policies for “excluded drivers.” An excluded driver has no coverage when he is operating a vehicle. The Eastland Court of Appeals issued an opinion in August of 2015, that should be read. The opinion is styled, Allied North America Insurance Brokerage of Texas, L.L.C. v. Diamond Pump & Transport, LLC and the Insurance Company of the State of Pennsylvania.

James Garrett died as the result of injuries that he received when Aaron Sanchez, a driver for Diamond Pump & Transport, LLC, ran into the motorcycle that Garrett was riding. The truck that Sanchez was driving at the time belonged to Diamond and was insured by the Insurance Company of the State of Pennsylvania. However, ICSOP had named Sanchez as a driver who was excluded from coverage under the policy. Allied North America Insurance Brokerage of Texas, L.L.C. was Diamond’s insurance agent that placed the policy with ICSOP. This appeal concerns the validity of the named driver exclusion.

This lawsuit began when the representative of Garrett’s estate, joined by Garrett’s heirs, filed a wrongful death suit against Diamond. Because ICSOP had issued Diamond’s vehicle insurance policy, and after it had issued a reservation of rights notice, ICSOP provided Diamond with a defense in connection with the Garrett lawsuit. Later, the Garrett plaintiffs amended their petition and added Sanchez as a defendant. Because it had listed Sanchez as an excluded driver in the policy, ICSOP then withdrew its defense and denied liability.

Insurance Agent Stealing Premiums

October 6, 2015 | Mark S. Humphreys

An insurance attorney who has handled very many insurance cases will end up having a case where the agent took money from their customer but never got the insurance. The agent will give the customer a receipt and maybe hand them a “binder” to indicate the coverage is in effect, but just pocket the money, hoping the customer does not have to make a claim and never knows the difference.

The Insurance Journal published an article in September of 2015, where an agent pocketing money was the topic. The title of the article is, “Miami Agent Arrested for Operating With Expired License, Stealing Premium Funds.”

The article tells us that the Florida Division of Insurance Fraud announced the arrest of Tania Michel, 41, for failing to notify the Department of Financial Services of a federal fraud conviction, continuing to work in the insurance industry after having her license expire, and knowingly misappropriating premium funds while working at an insurance agency.

Misrepresentation – Knowledge of Agent

April 2, 2015 | Mark S. Humphreys

Dallas and Fort Worth Life insurance attorneys need to read this 2006, opinion from the United States District Court, Southern District of Texas, Houston Division. The style of the case is, Kirk v. Kemper Investors Life Insurance Company.

This case arises from a life insurance policy issued by Defendant Kemper Investors Life Insurance Company (“KILICO”) to Walta Kirk. Ms. Kirk passed away while the policy was in effect. Because her death occurred within two years of the policy’s issuance, KILICO conducted a routine investigation, which revealed that Ms. Kirk had been treated for chest pain, respiratory disorder, mental disorder, and uncontrolled high blood pressure. Ms. Kirk had denied that she had ever had or been treated for any of these conditions in her application for the KILICO life insurance policy. Based on these alleged misrepresentations, KILICO denied payment of any benefits on the policy.

An insurer’s actual knowledge of a misrepresentation by an insured will defeat a defense based upon misrepresentation. It is not enough, however, for a party seeking to collect insurance benefits to show that the insurer could have discovered the misrepresentations through due diligence or proper care. Rather, only actual knowledge on the part of the insurer will prevent the insurer from showing that it relied on a misrepresentation made by the insured.

Renters Insurance And Breach Of Contract

March 22, 2015 | Mark S. Humphreys

Irving insurance lawyers wishing to sue for breach of contract in an insurance dispute need to read this Houston Court of Appeals opinion styled, Zatorski v. USAA.

Zatorski owned a high-rise, loft residence in Houston. A kitchen pipe broke and flooded the loft. Zatorski rented a single-family home while the loft was being repaired, and he called USAA to buy a renter’s insurance policy. He spoke with a USAA representative, paid for a one-year renter’s insurance policy over the phone, and did not review the written policy when he received it.

Armed intruders broke into Zatorski’s rental home and stole several firearms and his safe, which contained watches, jewelry, and cash; the items stolen had a total value of over $260,000. Zatorski made a claim against his rental policy for the value of the stolen items, and USAA responded that the policy limits were $1,000 for theft of jewelry, $2,000 for theft of firearms, and $200 for theft of cash. USAA paid Zatorski $4,500, which constituted payment of the policy limits for jewelry, firearms, and cash, plus $1,300 for the loss of the safe.