Interpreting An Insurance Policy

Third Party Beneficaries

July 2, 2013 | Mark S. Humphreys

Weatherford and Mineral Wells attorneys need to have some understanding of insurance law. In insurance contracts there are usually what is called intended or third party beneficiaries. Here is a little information about these third party beneficiaries.

Other persons who may sue for benefits under a contract of insurance besides the named insured are “intended beneficiaries,” also known as “third party beneficiaries.”

A third person for whose benefit a contract is made may enforce the contract against the promissor. Texas case law, as stated in 1985, by the Houston Court of Appeals, 14th Dist., tells us the controlling factor in determining whether a third party may enforce a contract is the intention of the contracting parties.

Insurance Is A Contract

June 20, 2013 | Mark S. Humphreys

Fort Worth insurance lawyers will tell you that insurance policies are contracts. As such the rules regarding insurance policies are the same rules governing contracts. This was confirmed in the 1994, Texas Supreme Court case, Hernandez v. Gulf Group Lloyds.

A person seeking to recover on an insurance policy must prove the policy was in force at the time of the loss. Arguments by an insurance company that the policy had lapsed is a common reason given for it’s refusal to pay a claim.

Also, when someone sues under a policy of insurance it is important to bear in mind that the person has to prove the existence of the insurance policy. An experienced insurance attorney is always going to ask for a certified copy of the insurance policy at issue at the beginning of a lawsuit.

What Happens When The Insured Does Not Submit To An Examination Under Oath?

June 15, 2013 | Mark S. Humphreys

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.

Endorsements On An Insurance Policy

June 11, 2013 | Mark S. Humphreys

Dallas insurance law attorneys need to know the significance of endorsements on an insurance policy. A recent United States District Court case in the Northern District of Texas is worth knowing about. The case is styled, Bituminous Casualty Corporation v. Travelers Indemnity Company, et al.

Here is some relevant information on the case.

Bituminous Travelers and Frontier seeking a declaratory judgment that Travelers’ insurance policy with Big D Concrete, Inc. covers a tractor and trailer that Big D leased to Frontier, Bituminous’ insured. The tractor and trailer were involved in an accident that gave rise to an underlying state court lawsuit. The Policy provides liability coverage for “[a]ny ‘Auto.’ ” D. At the time of the accident, Big D owned the tractor and trailer at issue, but it had leased them to Frontier. The lease included four other tractors and trailers, and it required that Frontier keep the equipment “insured against all risks of loss or damage from every cause whatsoever,” and to bear the entire risk of loss or damage. After Big D executed the lease, it submitted to Travelers through an agent a policy change request asking that Travelers delete these five tractors and five trailers from the Policy. In response, Travelers issued a change endorsement that amended the Policy to delete the five tractors and five trailers from commercial automobile coverage. The Endorsement also specified that “LIABILITY COVERAGE IS DELETED” for all ten vehicles.

Use Of An Automobile In An Insurance Policy

June 4, 2013 | Mark S. Humphreys

Weatherford insurance attorneys need to know about this recent case out of the Houston (14th) Court of Appeals. The style of the case is Farmers Insurance Exchange and Allstate County Mutual Insurance Company v. Juan Rodriguez. The opinion was issued in 2012.

The following facts are undisputed. Using a trailer hitched to his pickup truck, Woodling transported a deer stand from his deer lease to his residence. He pulled into his driveway and attempted to remove the deer stand from the trailer. He pushed the deer stand out of the trailer until the legs on the stand touched the driveway. He left the stand resting at a 30-degree angle against the trailer. He then attached a come-along 2 to a fence post and to the stand and attempted to raise the stand upright. Realizing he could not accomplish the task alone, he requested assistance from his neighbor, Rodriguez. Rodriguez and Woodling decided to lift the stand manually by walking forward out of the trailer and onto the driveway. They began in the trailer, each using both hands to push the stand upward. Then they stepped onto the driveway and took “one or two” more steps. When the stand was no longer touching the trailer, Woodling realized it was too heavy and yelled, “Juan, I can’t hold it. Jump.” Woodling then jumped away, leaving Rodriguez alone to hold the stand, which weighed approximately 350 pounds. The stand fell, and Rodriguez was injured.

The liability provisions of the Farmers homeowners policy contain the following exclusion for bodily injury claims: “arising out of the ownership, maintenance, operation, use, loading or unloading of … trailers [or] semi-trailers” except for “trailers or semitrailers while not being towed by or carried on a motor vehicle.”

Life Insurance Lawyer And Incontestability Clause

May 21, 2013 | Mark S. Humphreys

Dallas life insurance attorneys need to know about the incontestability clause in life insurance contracts.

What most people don’t know is that life insurance policies must contain an incontestability clause. This is a paragraph that says the policy will be incontestable after it has been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums. This is found in a few places in the Texas Insurance Code. Sections 1131.104, and 705.101 through 705.105. The effect of these clauses is to limit the various defenses that insurance companies will write into their policies so that they apply only during the first and second years of the policy. Insurance is a risk and without these laws regulating the policies, the insurance companies would write the policies in such a manner as to take out all the risk for them and leave their customer with only the illusion of insurance coverage.

The purpose of the incontestability clause in protecting the insured is further discussed in the 1972, Texas Supreme Court case, Minnesota Mutual Life Insurance Company v. Morse.

Life Insurance Attorney – Suicide

May 19, 2013 | Mark S. Humphreys

Dallas life insurance attorneys need to read and know this 1986, Amarillo Court of Appeals case. It is styled, Southern Farm Bureau Life Insurance Co v. Dettle. Here is some relevant information:

Southern Farm is appealing from a trial court finding in favor or Dettle. The controversy arose from the Southern Farm’s failure to pay death benefits on a policy insuring the life of Douglas Dee Dettle. The deceased-insured was found dead in his apartment. He died as the result of a single shotgun wound to his lower abdomen and genital area. Southern Farm defended on a suicide exclusion in the policy. In response to special issues, the jury determined that the deceased’s death was not a suicide.

Southern Farm argued “the trial court’s definition of the term ‘suicide’ erroneously included the element of intent, thereby placing upon Southern Farm a greater burden of proof than that required under either its contractual language or Texas law.”

Life Insurance & Separation

May 16, 2013 | Mark S. Humphreys

Dallas life insurance lawyers need to be aware of this 1981, Eastland Court of Appeals case. The style is Pilot Life Insurance Company v. Koch. Here is some of the relevant information:

This is a declaratory judgment case. Pilot Life sought a judgment declaring that it had no duty to pay life insurance proceeds to Lawrence A. Koch because of the death of his wife. Pilot Life had issued a policy of group insurance to Koch’s employer. The policy afforded life insurance coverage for employees and their eligible dependents. Eligible dependents were defined to include “your husband or wife, unless you were legally separated or divorced.” Pilot Life alleged that Mr. and Mrs. Koch were legally separated on the date of her death. A jury found that Mr. and Mrs. Koch were separated at the time of her death. Although that separation was pursuant to a “temporary” court order entered in the pending divorce proceedings between Mr. and Mrs. Koch, the trial court entered judgment for Koch notwithstanding the verdict on the theory that under Texas law there is no status of legal separation of a husband and wife before the marriage is dissolved by a decree of divorce.

On appeal Pilot Life contended that the trial court erred because the evidence established that Mr. and Mrs. Koch were separated pursuant to an order of a district court and thus they were legally separated on the date of Mrs. Koch’s death; and, were, therefore, legally separated within the contemplation of the policy. Pilot Life also urged that the trial court erred in ruling, as a matter of law, that Mr. and Mrs. Koch were not legally separated on the date of Mrs. Koch’s death.

Life Insurance Claim – When Does Coverage Begin

May 11, 2013 | Mark S. Humphreys

Fort Worth life insurance attorneys need to understand the 1980, Texas Supreme Court case, Life Ins. Co. of the Southwest v. Overstreet. Here is some relevant background information.

In February, 1972, Overstreet submitted his application to Southwest to convert a five-year term life policy to a life insurance policy with endowment at age ninety. The earlier policy provided that it would lapse on March 15, 1972. To effect the conversion of the term policy to the policy at issue, Overstreet, on March 6, 1972, delivered his premium check to insurer. It was returned because of insufficient funds. Overstreet then wrote a second check which was also returned for insufficient funds. His third check cleared the bank on April 18, 1972.

The insurer treated March 15 as the date annual premiums were due and sent notices to Overstreet on that basis. On March 6, 1973, insurer sent a notice to Overstreet advising him that his annual premium was due on March 15. After he failed to make his payment on that date, the insurer, on April 5, sent him another notice advising that the grace period for late payment would expire April 15. Overstreet still made no payment. The insurer, on April 15, sent him a further notice advising that the premium was past due and that the policy had been terminated. The notice offered, however, to reinstate the policy if Overstreet paid the premium within ten days. On April 25, the last day of the ten-day period, Overstreet paid the premium, which was for the 1973 insurance year. That premium payment was the last that Overstreet ever made. He did not pay his 1974 premium, and he died on April 24 of that year.

Life Insurance – Persons Entitled To Benefits

April 27, 2013 | Mark S. Humphreys

Dallas life insurance attorneys need to know about the case issued by the Eastland Court of Appeals in 1981. Here is some relevant information:

Pilot Life Insurance Company sought a judgment declaring that it had no duty to pay life insurance proceeds to Lawrence A. Koch because of the death of his wife. Pilot Life had issued a policy of group insurance to Koch’s employer. The policy afforded life insurance coverage for employees and their eligible dependents. Eligible dependents were defined to include “your husband or wife, unless you were legally separated or divorced.” Pilot Life alleged that Mr. and Mrs. Koch were legally separated on the date of her death. Koch filed a counterclaim seeking the policy proceeds of $5,000, 12% penalty and reasonable attorney’s fees. The jury found that Mr. and Mrs. Koch were separated at the time of her death. Although that separation was pursuant to a “temporary” court order entered in the pending divorce proceedings between Mr. and Mrs. Koch, the trial court entered judgment for Koch notwithstanding the verdict on the theory that under Texas law there is no status of legal separation of a husband and wife before the marriage is dissolved by a decree of divorce. Pilot Life Insurance Company appealed and lost his appeal.

Pilot Life contends that the trial court erred in granting judgment notwithstanding the verdict because the evidence established that Mr. and Mrs. Koch were separated pursuant to an order of a district court and thus they were legally separated on the date of Mrs. Koch’s death; and, were, therefore, legally separated within the contemplation of the policy.