Fort Worth insurance lawyers will often times be asked the above question. The answer is that there are many things an adjuster can do wrong for which they and the insurance company can be held liable if that wrong causes harm to the insured. However, the Texas Courts do not recognize a claim for negligent claim handling. This is told to us in the 2008, Houston Court of Appeals [14th Dist.] case, Justice v. State Farm Lloyds Insurance Company and FTI Consulting. Here is the relevant information taken from that case.
A tree fell on the Justices’ house in 2000, the Justices made a claim under their State Farm homeowner’s insurance policy and State Farm paid the claim. In 2001, the Justices discovered mold in the walls of their house and reported the claim to State Farm. State Farm sent the Justices a reservation of rights letter, hired FTI to conduct an industrial hygiene evaluation, and paid the Justices over $137,000 for remediation of their home, alternative living expenses, and cleaning costs on this claim. Thereafter, the Justices filed suit against State Farm and FTI for additional mold damage. State Farm and FTI each filed a motion for summary judgment, which the trial court granted.
State Farm moved for summary judgment against the Justices’ claim for breach of contract on the ground, among others, that this claim was barred by the mold exclusion in the policy. The Justices contend that the mold exclusion is somehow overcome by a provision of the State Farm Adjuster’s Guide, purportedly stating that if the original claim is covered, such as the damage from a wind blown tree, then any loss that proximately results is therefore covered. However, the Justices’ brief provides no legal authority suggesting that a provision of the Adjusters Guide could be controlling, relevant, or even admissible concerning the meaning or scope of coverage of the policy. Nor does it indicate how such a provision, even if applicable, could overcome an express exclusion in the policy. Therefore, this contention affords no basis for relief, and the Justices’ challenge to the summary judgment against their breach of contract claim was overruled.