Articles Posted in Uninsured/Underinsured Coverage

Uninsured and Underinsured motorist coverage is required to be provided in automobile insurance policies according to the Texas Insurance Code, Section 1952.101(b).  However, this coverage can be rejected as long as the rejection is in writing, according to 1952.101(c).  This coverage is designed to compensate injured persons who are legally entitled to recover damages from persons who cause motor vehicle accidents who do not have coverage or do not have adequate coverage.

The auto policy insuring agreement provides that the carrier will pay damages “which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, caused by an accident.”  This coverage applies if the person causing the accident is either uninsured or underinsured.  Thus, legal liability or negligence must exist on the part of the uninsured or underinsured motorist in order to trigger this coverage.  The auto policy goes on to say that the owner’s or operator’s liability for these damages must arise out of the “ownership, maintenance or use” of the uninsured motor vehicle.

The 2004, Texas Supreme Court opinion, Old American County Mutual Fire Insurance Company v. Sanchez, says uninsured motorist coverage essentially enables a victim of a motor vehicle accident to recover from his or her insurer the amount, up to policy limits, the victim would have been able to collect from the person who caused the accident had that person been insured.”

Here a question for your insurance law attorney … If a car swerves into my lane and I drive off the road and wreck my car to avoid the accident, does my uninsured motorist (UM) policy cover the damages?  Answer … NO!

An auto policy includes within the definition of UM vehicle a hit and run vehicle whose operator or owner cannot be identified.  This definition incorporates the Insurance Code’s requirement in Section 1952.104(3) that there be physical contact when the owner or operator of the reported UM vehicle is unknown or unidentified.  This is further illustrated in the 1986, Texarkana Court of Appeals opinion, Goen v. Trinity Universal Insurance Company.

Likewise, a drive-by shooting in which there is no collision does not meet the UM physical contact requirement.

The Claims Journal published an article January 18, 2018.  It is titled, Insured Must Obtain Settlement Consent Where Policies Require It.  The article discusses a case from the 9th Circuit Court and looks at California law.  However, Texas law has the same laws as it relates to coverage.

The article tells us that where insurance policies require written consent from the insurer to enter into any settlement agreement, it is important to ask, for permission from the insurer before entering into a settlement agreement.  Failure to do so may void coverage.

That is what occurred recently in One West Bank, FSB v. Houston Casualty Co.  In the case, Houston Casualty issued a professional liability policy which had a restrictive condition requiring the insured to seek prior written consent prior to entering into any type of settlement agreement regarding a covered claim.

Here’s one for Grand Prairie insurance lawyers handling uninsured motorist (UM) cases.  It is from the Corpus Christi Court of Appeals and is styled, In Re Farmers Texas County Mutual Insurance Company.

This case arose from a wreck with an UM driver.  The real party in interest, Luzminda Llasos brought suit against her auto insurance carrier, Farmers, for UM benefits.  Llasos sued Farmers for breach of contract, violations of the Prompt Pay Act, and violations of the Texas Insurance Code, Section 541.060.  Her original lawsuit papers incorporated written discovery consisting of fifteen interrogatories, twenty-six requests for production, and thirty requests for admission.

Farmers filed a motion to sever and abate Llasos’s extra-contractual claims form the underling UM claim.

Insurance lawyers will see situations where there is a question whether or not the “uninsured motorist” (UM) provisions of a policy apply to provide coverage.  An interesting case was heard in the Amarillo Court of Appeals dealing with this issue.  It is styled, Jesse Salinas v. Progressive County Mutual Insurance Co.

Jesse appeals a summary judgment in favor or Progressive.

Jesse was a passenger in a one vehicle accident that was stolen.  No one had permission to drive, occupy, or otherwise use the vehicle.

Lawyers in the Dallas and Fort worth areas who handle underinsured motorist (UIM) cases need to read this 2017 opinion from the Texas Supreme Court.  It is styled, Okelberry v. Farmers Texas County Mutual Insurance Co.

Steven Okelberry and his wife, Patricia, had an auto policy with Farmers that provided $500,000.00 in UIM coverage.

Steven and his two sons were injured in an 18-wheeler accident insured by Home State.  Steven suffered a neck injury requiring surgery and the possibility of additional surgeries.

Lawyers handling insurance disputes involving uninsured motorist (UM) coverage should already know the law discussed in a recent case from the Southern District, Houston Division.  The case is, Eleazar Cantu, Jr. v. State Farm Mutual Automobile Insurance Company.

Cantu was injured when he fell off a truck driven by an uninsured motorist.  Cantu sued the driver, two other UM individuals, and State Farm and took a default judgment in the amount of $65,095.12.  Cantu demanded State Farm pay $30,000, the policy limit, and when State Farm declined to pay, Cantu sued State Farm.

Insurance lawyers in Fort Worth and elsewhere need to read this case regarding settlement credits and under-insured (UIM) coverage.  It is from the Houston Court of Appeals [14th Dist.].  It is styled, Farmers Texas County Mutual Insurance Company v. Okelberry, et al.

Steven Okelberry and his wife, Patricia has UIM coverage with Farmers.  Steven and his two sons were injured in an accident caused by an 18 wheeler insured by Home State.  Steven suffered a neck injury requiring surgery and possibly future surgeries.

Home State settled Steven’s property damage claim for $20,066.12 out of a total policy limits of $750,000.  Steven and his two sons sued the 18 wheeler company and its driver for their personal injuries.

Mineral Wells attorneys who handle underinsured motorist claims need to read this Austin Court of Appeals opinion.  It is styled, Johnson v. State Farm Automobile Insurance Company.

This suit arises from a suit brought by Jerry Johnson seeking declarations construing the terms of two insurance policies following an automobile accident in which Jerry’s son, Jacob, was injured while Jerry was driving.

In 2008, Jerry and Jacob were traveling in Colorado in a rented car driven by Jerry when Jerry caused an accident which severely injured his 11 year old son. Jacob.  Jacob lived with his parents at the time of the accident and remained in the home until May 29, 2015, when he permanently moved out of the residence.  Jerry had an auto policy and an umbrella policy with State Farm.  The auto policy contains a provision, the “family member exclusion,” that excludes from liability coverage bodily injury to “any family member, except to the extent of the minimum limits of Liability Coverage required” by the Texas Motor Vehicle Safety-Responsibility Act, which was $25,000 at the time.  “Family member” is defined as “a person who is a resident of your household and related to you by blood, marriage, or adoption.”  The umbrella policy has a similar provision.  Jerry sought coverage under both policies.  State Farm refused coverage beyond the $25,000.00 minimum.

Most insurance lawyers know this – – that a first party uninsured motorist claim cannot litigate bad faith until there has been a resolution to the uninsured motorist (UM) part of the claim.  This is illustrated in the February 2017, opinion from the 14th Court of Appeals styled, In Re Allstate County Mutual Insurance Company.

Allstate was sued for UM benefits and at the same time sued for extra-contractual bad faith claims.  The Judge in the case would not sever and abate the extra-contractual causes of action from the UM claim and this mandamus action resulted.

The real party in interest, Alexa St. Julian was involved in an automobile accident with an uninsured driver.  Alexa was unable to reach a settlement with Allstate, who had made a settlement offer, and the lawsuit resulted.  Allstate sought for the UM claim to severed and abated from the extra-contractual claims.