Dallas Fort Worth Insurance Lawyer Blog
Cooperating with the your own insurance company when making a claim for policy benefits is almost always a requirement in the policy. An opinion discussing this was issued by the Tyler Court of Appeals in 2024. The opinion is styled, Kenneth R. Cade v. State Farm Lloyds.
On April 18, 2019, a windstorm blew a large tree onto a portion of Cade’s house that was insured by State Farm. Cade eventually made a claim for damage to the structure and contents. Several inspections were made and payment was made totaling approximately $30,000. The personal property claim was not made until about 18 months later, claiming several items of personal property were damaged or destroyed. A lawsuit resulted after State Farm denied paying further damages citing a lack of cooperation by Cade with the claim. State Farm filed a motion for summary judgement which was granted.
The opinion details many more of the facts and testimony in the case which should be read. This article will cite the law related to this type of claim.
The law regarding cooperation is flexible at times regarding whether or not the insurance company must showed it has been prejudiced by failure to comply with the insured’s obligation to cooperate with the investigation.
In this case, assuming without deciding that State Farm must show prejudice by Cade’s failure to comply with the policy conditions, the Court concluded that State Farm has in fact demonstrated prejudice. Prejudice is shown when the purpose of a particular provision has been impaired. The purpose of the provisions at issue is to allow the insurer “to properly investigate the circumstances of the loss while the occurrence is fresh in the minds of witnesses, to prevent fraud, and to enable it to form an intelligent estimate of its rights and liabilities so that it may adequately prepare to defend any claim that may arise. However, “an insurer must offer ‘more than the mere fact that it cannot employ its normal
procedures in investigating and evaluating the claim.’”
The summary judgment evidence established that Cade did not claim personal property damages until September 2020, when his attorney emailed State Farm adjuster Kelly Clark a typed letter from Cade referring to “treasured antiques” in the home. The adjuster replied, asking for a detailed inventory and other documentation. She also asked for the ages and values of the items Cade claimed were damaged as well as photographs of the damaged property. The adjuster did not receive a response. Cade sold the house and filed suit the next month.
In addition, State Farm had no opportunity to investigate Cade’s personal property claim. While another adjuster went inside the home during his inspection and observed that the home did not contain any personal property of value, he was not investigating the personal property. He, and the other inspectors, investigated damage to the house itself. In short, State Farm was completely unable to investigate Cade’s personal property claim. In addition, Cade admitted leaving the damaged items in the house for years after the loss, making no effort to remove them from the elements or protect them from further damage.
Based on the foregoing, the Court concluded that State Farm established prejudice by Cade’s failure to comply with the policy conditions regarding the personal property claim. Therefore, the trial court did not err in granting summary judgment on that claim.