Dallas Fort Worth Insurance Lawyer Blog

Credit Disability Insurance

August 31, 2014 | Mark S. Humphreys

Duncanville insurance attorneys need to be able to discuss credit disability issues with a prospective client. A 1996, Austin Court of Appeals opinion helps to understand credit disability issues. The case is styled, American National Insurance Co. v. Paul. Here is some of the relevant information.

The Pauls purchased a van from Dodge. In the negotiations, Mr. Paul asked the salesman whether the purchase price included credit disability insurance. The salesman did not know. There was no further discussion regarding credit disability insurance. The Pauls came into the car dealership later, stated that they were in a hurry and needed to buy the van over the lunch hour. The Pauls met the finance agent who prepared documents which included an application for credit disability insurance provided by American National. The total purchase price included premium payments for this coverage. The finance agent did not orally disclose the existence of the credit insurance application and the Pauls did not read the paperwork.

The insurance application contained a paragraph entitled “Applicant’s Statement” which required the applicant to affirm that she was in good health and had not consulted a doctor within three years for certain conditions. Mrs. Paul signed the statement even though at the time she suffered from Lou Gehrig’s disease. As of April 1, 1994, Mrs. Paul became permanently and totally disabled and unable to continue working. On May 5, 1995, she applied for disability insurance benefits pursuant to the credit disability insurance policy which American National denied. When American National discovered her condition, they refunded the premium payment to Chrysler Credit which in turn refunded it to the Pauls.

What If An Insurance Company Does A Bunch Of Things Wrong?

August 30, 2014 | Mark S. Humphreys

Arlington insurance attorneys need to be able to explain to clients what happens when an insurance company is found to do many things wrong. This is illustrated to a certain extent by a 1998 Texas Supreme Court case. The case is styled Waite Hills Services v. World Class Metal Works, Inc. Here is the relevant information from that case.

World Class chrome-plates truck hitches and muffler tips. Colony issued World Class a commercial general liability, commercial property, and commercial inland marine policy. In July 1990, a hole appeared in one of World Class’s nickel-plating tanks, causing some nickel solution to spill out of the tank. World Class did not know what caused the hole, but it stopped work on its assembly line. A World Class employee contacted David Ingram, its insurance agent, to report the incident. Ingram contacted Vee Riley, an employee of Burns & Wilcox, to determine if the event was covered. Riley advised Ingram that the event was probably not covered if normal wear and tear caused the hole. Ingram so informed World Class.

World Class drained and salvaged the remaining solution, removed the existing tank liner and installed a new liner, repaired the hole in the tank’s exterior, and engaged in clean-up efforts. These repairs allegedly cost World Class thirty days of operation.

Three Times Actual Damages – How That Works

August 28, 2014 | Mark S. Humphreys

Insurance law attorneys in Dallas and the Fort Worth area need to be able to discuss how trebling of damages works in insurance cases. The Texarkana Court of Appeals issued a 2006 opinion that helps to understand this issue. The style of the case is, Allstate Indemnity Company v. Hyman. Here is some of the relevant information.
The insured was involved in an automobile accident resulting in severe damage to the vehicle. The insured filed a claim with Allstate, but thought Allstate’s offer was inadequate. The insured also filed a lawsuit against the driver of the other car and settled. The insured brought suit against Allstate for breach of contract. The jury in the trial court found in favor of the insured that Allstate breached the contract by not paying and also found a knowing violation of the Texas Insurance Code. The jury awarded actual damages of $21,600.00 ($18,000.00 for the vehicle and $3,600.00 for a rental vehicle for a reasonable period of time), enhanced damages of $54,000.00 and also awarded $25,000.00 in attorney fees. The trial court ordered an offset in the amount of the insured’s settlement with the other driver. Both sides appealed.
This appeals court affirmed the trial court’s judgment that Allstate was liable for breach of contract and a violation of the Texas Insurance Code, but reformed the judgment to provide for an award of $63,300.00 for damages. Rejecting Allstate’s argument that the insured never triggered its duty to pay the claim because the insured failed to provide information and failed to cooperate, the court determined that the information sought by Allstate was not pertinent to the investigation of the claim and the decision to accept or not accept the claim, but was a procedure that Allstate would follow after it accepted liability for the loss. The court agreed with the insured’s belief that if it signed the requested power of attorney, it would be agreeing to the amount Allstate wanted to pay and the insured would be left with no recourse. The court also rejected Allstate’s argument that the insured impaired it’s right of subrogation against the other driver. The court focused on the policy language, “if we make a payment,” and noted that in this instance Allstate had not made a payment, and thus was not entitled to recover its subrogation rights. The court determined that the amount of recovery by the insured in its settlement with the other driver was less than the amount the jury had determined was the actual value of the insured’s vehicle, thus holding that Allstate was entitled to an offset against the damage award in the amount of the value of the vehicle, less the deductible. In making its determination, the court examined the “one recovery rule” and the “made-whole doctrine.” The court next addressed Allstate’s alleged violation of the Texas Insurance Code and found that there was evidence to support the jury’s findings that Allstate made post-loss misrepresentations and that the insured was entitled to extra-contractual damages. In a matter of first impression, the court determined that the Texas Insurance Code capped the plaintiff’s recovery at three times the actual damages, not three times the actual damages plus additional damages, including court costs and attorney’s fees. Lastly, the court, in determining that Allstate was entitled to an offset, applied the offset only after trebling the actual damages stating that if it applied the offset before trebling the damages, “there would effectively be no punitive award.”

Insurance Attorneys – Here’s One For You

August 26, 2014 | Mark S. Humphreys

Tarrant County insurance lawyers who keep up with what is going on in the world of insurance coverages will find an article published by BloombergBusinessweek in July to be entertaining. The title of the article is, “Even Pot Dealers Need Insurance. The Problem Is, Where to Get It?” Here is what the article discusses.

Pot dealers of yore never had to worry about this, but here it is: Even in states where selling marijuana is legal, pot retailers are finding they can’t get standard-issue business insurance.

Big insurance companies aren’t writing policies because the category is so new, it’s hard to price the risk, Carole Walker, executive director of the Rocky Mountain Insurance Information Association, told the Denver Business Journal. The fact also remains that the sale and distribution of marijuana remains illegal under federal law, which puts insurers in a tricky spot.

Insurance For Granny Scooters?

August 24, 2014 | Mark S. Humphreys

Irving insurance attorneys as well as all lawyers in the Dallas – Fort Worth area need to be aware of the changes in law related to insurance issues. BloombergBusinessWeek published an article in July that is interesting. The title of the article is. “Insurers Claim Granny Scooters Must Be Covered – Just Like Cars.” Here is what the article says.

Two insurance companies have made an unusual argument in a Michigan case: They’re insisting that the drivers of motorized mobility scooters should be required to get the same insurance as car and truck owners.

The case involves the claims of a paralyzed man who was hit by an SUV while crossing the street on his way to a doughnut shop. The insurance companies’ position? Because the man didn’t have auto insurance on his scooter, they shouldn’t have to pay for any damage caused to him by the SUV.

Health Insurance Claim Denied

August 23, 2014 | Mark S. Humphreys

Irving insurance lawyers who deal with health insurance policies already know what was talked about in a recent article. The article is from FoxBusiness. Here is what the article tells us.

Few things are scarier than racking up medical bills and then learning that your health insurance company won’t pay.

It’s a nightmare that could panic any policyholder. But before you worry about sinking into a black hole of medical debt, know that federal law offers a way to appeal.

Insurance Cases And Attorney Fees

August 21, 2014 | Mark S. Humphreys

As all insurance law lawyers know attorney fees in a first party insurance claim case are almost always recoverable. A 2007, Houston Court of Appeals [1st Dist.] case illustrates this. The style of the case is, Rosenblatt v. Freedom Life Insurance Company. Here is some of the relevant information from the case.

After sustaining injuries in an automobile accident, Rosenblatt asserted claims for healthcare benefits from Freedom Life. Rosenblatt sued Freedom Life, seeking damages for the company’s delays in investigating his claims and in paying him compensation.

The case was ultimately submitted to the jury on Rosenblatt’s common-law claim for bad faith and his claim that Freedom Life violated Section 541.060(a)(4)(A) of the Insurance Code and committed an unfair settlement practice by failing to affirm or deny coverage within a reasonable time.

Damages For Claim Denial

August 19, 2014 | Mark S. Humphreys

Mineral Wells insurance lawyers need to be able to discuss the value of a claim with a client when asked. It is often times difficult to do so. Sometimes part of the value is easy to determine while other parts are very difficult. For instance:

If a $200,000 house burns down and your insurance company denies the claim, it is easy to calculate the base value of the claim, i.e., the $200,000 for the value of the house. Losses such as mental anguish, if it can be proved the insurance company acted improperly in a knowing and intentional manner in the denial of your claim, is harder to determine.

The United States District Court, Northern District of Texas, issued an opinion in 2008, that helps determine damages as it relates to the attorney fees incurred by the claimant due to the wrongful denial of benefits by the insurance company. The style of the case is, Trammell Crow Residential Co. v. Virginia Surety Co., Inc. Here is some of the relevant information to know.

Insurance Claims And Subrogation

August 17, 2014 | Mark S. Humphreys

Tarrant County Insurance Attorneys need to understand how insurance claims work with subrogation issues. The Texas Supreme Court, in 2006, issued an opinion as it relates to subrogation and Personal Injury Protection (PIP) benefits. The style of the case is Allstate Indemnity Company v. Forth. Here is what the opinion says.

In this breach of contract suit, the Court considered whether an insured has standing to sue her insurance company for settling her medical bills in what the insured considered to be an arbitrary and unreasonable manner. In reversing the trial court and remanding the case for trial, the court of appeals concluded that the insured had standing even though the insured had no out-of-pocket expenses, and her health care providers had not, and now could not, collect any additional sum from her.

Because there are no allegations that the insured suffered damages or that the manner in which the insurance company settled the insured’s medical expenses caused her any injury, this Court concluded that the trial court was correct to dismiss her suit, and accordingly reversed the court of appeals’ judgment.

Insurance attorneys need to know about the law related to life insurance applications

August 16, 2014 | Mark S. Humphreys

Life insurance application – Insurance attorneys need to know about the law related to life insurance applications. A 1994, Texas Supreme Court case discusses one aspect of this. The style of the case is, Fredonia State Bank v. General Life Insurance Company.

The principal issue in this case is whether an insurance company may assert the defense of misrepresentation for statements made in an application not attached to a life insurance policy.

The insured died as a result of a gunshot wound to the head. Prior to his death, he had purchased tow life insurance policies issued by General American. General American denied the beneficiary’s claims for benefits. Fredonia State Bank, an assignee of one of the two policies and executor of the insured’s estate, sued to collect the proceeds of the policy.