Insurance Lawyers And Misrepresentation In Policy Application

Fort Worth insurance lawyers and those in Benbrook, Crowley, Lake Worth, Saginaw, and other places in Tarrant County need to keep up with as many cases as they can related to insurance issues. This would include cases that deal with the application that is made in the process of trying to obtain insurance. An experienced Insurance Law Attorney will know details to look for to help a client.
The Texas Insurance Code has many sections that are helpful to lawyers trying to find ways to assist a client obtain insurance benefits. One of those is Section 705.004. It tells us that:
(a) An insurance policy provision that states that false statements made in the application for the policy or in the policy make the policy void or voidable:
(1) has no effect; and (2) is not a defense in a suit brought on the policy.
The really strong part of this Section is sub-part (c), which reads:
“It is a question of fact whether a misrepresentation made in the application for the policy or in the policy itself was material to the risk or contributed to the contingency or event on which the policy became due and payable.”
This sub-part (c) is what enables the case to get in front of a jury. This is VERY important because of the risk to the insurance company and usually, will cause them to settle the case.
The above is one of many sections in the Texas Insurance Code that are good to insureds when making a claim that is denied.
Also helpful is case law spoken of in the first paragraph. It is case law that interprets statutes such as the one pointed out above, Section 705.004.
The Houston Court of Appeals [14th] has said, “Mere knowledge of one’s health condition is insufficient to prove intent to deceive as a matter of law.” This case is from 1991, and styled, Flowers v. United Ins. Co. of Am.
Another example is found in the 1993, San Antonio Court of Appeals case, Garcia v. John Hancock Variable Life Ins. Co.
In Garcia, John Hancock asked the court determine that “intent to deceive” was proven as a matter of law where the alleged misrepresentation was the decedent’s failure to disclose that he had been treated for diabetes. He had visited the doctor on February 18th and filled out his first application on February 25th. He was taking prescription medicine for diabetes when he executed a second application on March 10th. The Court did not agree that this sequence of events proved intent to deceive as a matter of law based upon the number, frequency, and proximity of the alleged misrepresentations to the medical treatment.
Another case, out of El Paso Court of Appeals in 1989, styled, Southwestern Life Ins. Co. v. Green, is a good case to know.
Green applied for insurance. A few months later, he was hospitalized with a diagnosis of chronic alcoholism, alcoholic hepatitis, and early cirrhosis. He died the next year from liver failure. The insurer argued this evidence established his intent to deceive, as a matter of law. The Court rejected this argument, in part, based on testimony from a counselor that an alcoholic is often in denial about his alcoholism and may deny excessive alcohol use and other physical problems, without intending to deceive anyone.