Dallas Fort Worth Insurance Lawyer Blog

Prompt Payment Of Claims Statute – Other Issues

July 24, 2023 | Mark S. Humphreys

The Texas Prompt Payment of Claims statute is helpful to claimants when an insurance company drags it feet on paying a claim. This statute is found in the Texas Insurance Code, Sections 542.051 – through 542.061.

When an insurance company reasonably requests information from a claimant, deadlines are postponed until the insurance company receives the requested information.

In contrast, the statute does not expressly extend any deadlines while the insurance company awaits information from third parties. However, if the insurance company cannot accept or reject a claim because it is still waiting for such information, Section 542.056(d) allows the insurance company a one-time, 45 day extension.

Late Payment Of Claim – Can The Insurance Company Get Away With It

July 22, 2023 | Mark S. Humphreys

The Texas Prompt Payment of Claims Act is found in the Texas Insurance Code, Section 542.051 thru 542.061. When an insurance company fails to timely pay a claim, are there ways they can escape liability under the Prompt Payment of Claims Act?

If the insurance company cannot accept or reject the claim by the initial deadline, the statute lets the insurer notify the claimant that it cannot accept or reject a claim by the deadline. This is found in Section 542.056(d). This notification has to be sent before the original deadline, and the notice must state the reason why the insurance company needs additional time. The insurance company then has 45 additional days to accept or reject the claim.

The insurance company’s good faith – or its lack of bad faith – is no defense. This is discussed in the 1997, United States 5th Circuit Court of Appeals opinion styled, Higginbotham v. State Farm Mutual Automobile Insurance Company. In reaching this conclusion, the court noted that precedents under the predecessor statute, article 3.62, held that an insurance company’s good faith in denying a claim did not relieve them of liability for penalties. The court concluded that an insurance company that denies a claim takes the risk that it will have to pay additional damages allowed by the statute.

Hail Damage Claims

July 17, 2023 | Mark S. Humphreys

From a statistical point of view, less than 2% of all lawsuits result in an actual trial. They either get thrown out of court on a motion for summary judgment or they they get settled. Most get settled. For the cases that go to trial, the public hears about the “million dollar” wins. What is not reported are the day in and day out loses that occur. It is important to understand why they lost.

Here is a 2023 opinion from the San Antonio Court of Appeals wherein the case appealed had been lost at trial and the insured filed the appeal. The opinion is styled, Brian Jones v. Allstate Vehicle And Property Insurance Company.

Brian sued Allstate on a claim resulting from a 2016 hail storm. He sued for breach of the insurance contract and unfair settlement practices.

Insurance Bad Faith Claims – Experts

July 15, 2023 | Mark S. Humphreys

Insurance lawyers have to know how to deal with experts in a case. Here is a 2023 opinion from the Eastern District of Texas, Beaumont Division, that deals with an expert. The opinion is styled, Juanita Vera v. State Auto Insurance Company and Meridian Security Insurance Company.

This is a dispute for damages alleged to have occurred from Hurricane Laura. Vera hired an expert, Gary Sanders, to testify about causation of Vera’s damages.

The admissibility of expert evidence is a procedural issue governed by Federal Rule of Evidence 702 and the U.S. Supreme Court, Daubert decision. Federal Rule of Evidence 702 sets forth the requirements that must be satisfied to enable a witness designated as an expert to testify to his or her opinions. An expert may testify in the form of an opinion if: (1) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (2) the testimony is based on sufficient facts or data; (3) the testimony is the product of reliable principles and methods; and (4) the expert has reliably applied the principles and methods to the facts of the case.

Claims Against Insurance Companies – Not Just Bad Faith

July 10, 2023 | Mark S. Humphreys

Insurance transactions tend to resemble one another, so disputes arising from them tend to resemble one another. There are only so many ways that an insurer and an insured can get crossways. Most cases present recurring problems that can be grouped into categories. Insurance law is even more precedent-driven than other areas, as courts try to construe similar policy language consistently. It is not surprising that cases start to look alike.

The starting point is the contract itself. The initial inquiry always begins with the language of the contract to determine what is covered and what is not. Other tort and statutory theories may logically depend on the existence of coverage, or may exist independent of coverage. The interplay between recovery for breach of contract and recovery under other theories needs to be studied. Beyond suit for breach of contract, most insurance cases can be grouped into three categories:

(1) misrepresentations

Bad Faith Lawyers – Be Aware How Insurers Can Get Around Prompt Payment

July 8, 2023 | Mark S. Humphreys

The Texas Prompt Payment of Claims Act has lots of helpful law for insured when an insurance company doesn’t pay a claim timely. However, there the Act also has a lot of benefits for the insurers that might help them avoid liability. Here are a few.

a. Being an eligible surplus lines insurer extends the deadlines for acknowledging receipt of the claim, commencing the investigation, and requesting information. This is found in section 542.055(a).

b. Also, being a surplus lines insurer extends the deadline for paying a claim from five business days to 20 business days after the insurer notifies the claimant that the claim will be paid, or after the claimant performs any condition imposed on payment of the claim. This is found in section 542.057(c).

Late Payment Of Claims – How To Make A Claim

July 3, 2023 | Mark S. Humphreys

When making a claim, what is required of the claimant? Here is some guidance.

Pursuant to Texas Insurance Code, Section 542.051(4), there is no particular content required, as long as the claim “reasonably apprises the insurer of the facts relating to the claim.”

The statute requires that the claim be in writing. The statute provides that “notice of claim” means “any written notification provided by a claimant to an insurer that reasonably apprises the insurer of the facts relating to the claim. A 2005, Austin Court of Appeals, in an opinion styled, McMillin v. State Farm Lloyds, has strictly applied the requirement of written notice, holding that a phone call was not sufficient.

Life Insurance = Misrepresentation – 3

July 1, 2023 | Mark S. Humphreys

Life Insurance claims denial attorney are well aware of this 2023 opinion from the Texas Supreme Court. The opinion is styled, Arce v. American National Insurance Company.

In the opinion the Texas Supreme Court discussed “intent.”

American National argued that, because the Texas Legislature included the word “intent” in other provisions of the Texas Insurance Code, the absence of such a phrase in Section 705.051 indicated the Legislature’s intent Not to require “intent.”

Life Insurance Denial – Misrepresentation – 2

June 26, 2023 | Mark S. Humphreys

Life Insurance claims denial attorney are well aware of this 2023 opinion from the Texas Supreme Court. The opinion is styled, Arce v. American National Insurance Company.

The Court discussed the plain text of Texas Insurance Code, Section 705.051 wherein it states: “a misrepresentation in an application for a life, accident, or health insurance policy does not defeat recovery under the policy unless the misrepresentation:

(1) is of a material fact; and

Life Insurance Denial – Misrepresentation – 1

June 24, 2023 | Mark S. Humphreys

Life Insurance claims denial attorney are well aware of this 2023 opinion from the Texas Supreme Court. The opinion is styled, Arce v. American National Insurance Company.

On April 28, 2023, the Texas Supreme Court held that a life insurer seeking to avoid a life insurance policy via a Texas Insurance Code statutory misrepresentation defense must, just like under a common-law misrepresentation defense, prove the insured had “intent to deceive” when it made a misrepresentation in a life, accident, or health insurance application.

In making this ruling, the Texas Supreme Court rejected American’s argument that Texas Insurance Code, Section 705.051 did not require intent to deceive just because the statute was silent on whether intent to deceive was required.