Dallas Fort Worth Insurance Lawyer Blog

Life Insurance Attorney And Insurable Interest

July 5, 2022 | Mark S. Humphreys

To be able to recover from a life insurance policy a person has to be named as a beneficiary, the majority of the time. However, even if a person is named as a beneficiary they still have to have an insurable interest in the deceased to be able to recover.

As stated in the 1942, Texas Supreme Court opinion, Drane v. Jefferson Standard Life Ins. Co., “A person that has a reasonable expectation of pecuniary benefit or advantage from the insured’s continued life has an insurable interest.”

In the Drane case, although not related by blood or marriage to Harry Ezell, Jr., not indebted to him in any way, his godmother Dorothy Drane named him as beneficiary in two policies. Upon her death, the executor of her estate, her brother, asserted that Ezell had no insurable interest. The facts showed that Miss Drane had bought clothes for the boy for fifteen years, had paid for his medical care, had cared for him while his mother was ill, had taken him on vacations, and sadly was killed in a wreck as she drove to visit him his freshman year in college, “taking him a radio, a cap and an apple pie.” The court concluded that Ezell did have an insurable interest based on a reasonable expectation of pecuniary benefit and advantage from Miss Drane’s continued life. “We think that when Dorothy Drane was killed ‘his temporal affairs, his just hopes and well grounded expectations of support, of patronage, and advantage in life’ were impaired …. It is inconceivable, under the facts of this record, that he would ever have been tempted to destroy her life in order to collect the proceeds of the two policies in suit.”

Insurance Claim – Concurrent Causes – Court Asks What To Do

July 2, 2022 | Mark S. Humphreys

A frequent insurance problem in Texas is damage alleged to have been caused by a hail or wind storm. This issue is even confusing for the Courts. Here is a case discussing this issue and in the opinion, the United States Fifth Circuit is asking the Texas Supreme Court on guidance for resolving the Texas “concurrent causation doctrine.” The style of the case is, Harold Franklin Overstreet v. Allstate Vehicle and Property Insurance Company.

This case is about a leaky roof. Overstreet says the leak was caused by a strong hailstorm that hit his neighborhood shortly after he purchased the policy. Allstate argues that almost all the roof damage was due to uncovered causes, namely a combination of wear and tear and earlier hailstorms that hit the roof before Overstreet purchased the policy. The district court granted summary judgment to Allstate because Overstreet did not prove what damages were solely attributable to the covered storm.

Overstreet bought a home insurance policy from Allstate that covered damage from wind and hail. Overstreet’s roof was about three years old when he purchased the policy. On June 6, 2018 a wind and hail storm hit the area where he lived, allegedly damaging his roof. Overstreet reported a loss to Allstate, whose adjuster estimated the value of the loss at only $1,263.23. Because this amount was less than the deductible, Allstate paid Overstreet nothing.

Insurance Claim Denial – Policy Language

June 27, 2022 | Mark S. Humphreys

I know, I know. Nobody reads the policy. But, not reading the policy and understanding it can be a killer. This is illustrated in a May 2022, opinion from the United States 5th Circuit Court of Appeals. The opinion is styled, Bradford Realty Services, Incorporated v. Hartford Fire Insurance Company.

The Policy at issue in this case is a commercial building policy. It provides coverage for losses “caused by or resulting from water that backs up from a sewer or drain.” It also excludes coverage for damage caused by rain unless the Property “first sustains damage by a covered Cause of Loss to its roof or walls through which the rain . . . enters.”

In September 2018, heavy rains swept over the insured property. Drains on the building were clogged. The clog and a subsequent leak caused extensive damage to the inside of the property. Bradford filed a claim that was subsequently denied by Hartford with Hartford saying the damage was caused by rain that did not enter the building through damage caused by the storm and thus fell into the Policy’s exclusion for damage caused by the rain.

Insurance Company And Breach Of Contract

June 25, 2022 | Mark S. Humphreys

When an insurance company denies a claim, 99% of the time the claim the insured has against the insurance company is a claim for breach of contract. Issues related to “bad faith” and statutory violations of the Texas Insurance Code are relevant and important but usually those do not matter unless or until it is shown that the insurance contract was breached by failure to pay the claim.

A 2022, opinion from the Northern District of Texas, Amarillo Division, discusses the breach of contract part of an insurance claim. The opinion is styled, Valleyview Church of the Nazarene v. Church Mutual Insurance Company.

The full facts of the case can be read in the opinion. Church Mutual filed a motion for summary judgment.

Bad Faith Insurance Claims And Trial

June 20, 2022 | Mark S. Humphreys

A claim against an insurance company generally speaking, will involve at least two distinct claims. One for a breach of the insurance contract and a second claim for the insurance company acting in “bad faith” in their handling of the claim. This issue was discussed in a 2022 opinion from the Northern District of Texas, Dallas Division. The case is styled, Claire Garcia v. Allstate Vehicle and Property Insurance Company.

Allstate had filed a Motion to Sever and Abate the contract claim from the bad faith claims alleged to be violations of the Texas Insurance Code, Sections 541.060 and 542.060, plus violations of the Texas Deceptive Trade Practices Act and fraud.

Garcia experienced hail damage to her home and filed a claim for coverage through her home insurer, Allstate. Allstate sent an adjuster to Garcia’s home who calculated an estimate of $843.68. Later, another agent calculated an estimate of $1,166.84. After applying deductibles, Garcia was not receiving any monies for the claim.

Bad Faith Insurance Claims – Hail Damage Part 2

June 18, 2022 | Mark S. Humphreys

To show an insurance company has acted in “bad faith” an insured must first show that the insurance company has breached the insurance contract. This is discussed in a 2022, opinion from the Western District of Texas, San Antonio Division opinion. The opinion is styled, Rosemarie Wheeler v. Safeco Insurance Company of Indiana.

Wheeler had her home insured through Safeco. Wheeler contends her home was damaged in a hail storm that occurred on or about May 28, 2020. The claim was reported on May 30, 2020, and Safeco scheduled an inspection on June 13, 2020. The adjuster, Doug Lehr, determined that there was hail damage but that most of the damage was cosmetic. A small check was issued for the damage determined to be non-cosmetic.

Wheeler hired a public adjuster, Elvis Spoon, who prepared an estimate that totaled $140,617.62. Spoon disagreed the roof damage was cosmetic but did not provide any additional information to dispute Lehr report.

Bad Faith Insurance Claim – Hail Damage

June 13, 2022 | Mark S. Humphreys

To show an insurance company has acted in “bad faith” an insured must first show that the insurance company has breached the insurance contract. This is discussed in a 2022, opinion from the Western District of Texas, San Antonio Division opinion. The opinion is styled, Rosemarie Wheeler v. Safeco Insurance Company of Indiana.

Wheeler had her home insured through Safeco. Wheeler contends her home was damaged in a hail storm that occurred on or about May 28, 2020. The claim was reported on May 30, 2020, and Safeco scheduled an inspection on June 13, 2020. The adjuster, Doug Lehr, determined that there was hail damage but that most of the damage was cosmetic. A small check was issued for the damage determined to be non-cosmetic.

Wheeler hired a public adjuster, Elvis Spoon, who prepared an estimate that totaled $140,617.62. Spoon disagreed the roof damage was cosmetic but did not provide any additional information to dispute Lehr report.

Life Insurance Claims

June 11, 2022 | Mark S. Humphreys

Experienced Life Insurance Attorneys need to understand the areas of dispute that arise in the context of life insurance.

Life insurance is fairly straightforward. If the insured dies during the policy term, the insurance company pays the benefits. The following are some ways that disputes may arise.

a. The life insurance agent may misrepresent the benefits of his insurer’s policy to induce the insured to switch from another company.

Fraud By The Insurance Agent

June 6, 2022 | Mark S. Humphreys

Life Insurance lawyers who read this Blog, or for that matter, anybody who reads this Blog eventually learns that there are many wrongs an insurance agent will commit to get a sale. Most of their income from an insurance company is based on getting a percentage of the premiums. In other words, most agents work on a commission basis.

The Texas Department of Insurance regulates life insurance agents and the Texas Insurance Code also regulates insurance agents.

Today’s short focus is on a different form of fraud which is sometimes committed by an agent when selling life insurance.

Bad Faith Insurance?

June 4, 2022 | Mark S. Humphreys

Bad Faith insurance lawyers are always questioning themselves on where the line is drawn regarding bad faith claims. This issue is discussed in this 2022, opinion from the Western District of Texas, San Antonio Division. It is styled, Dr. John Winston, III v. State Farm Lloyds.

State Farm filed a motion for summary judgment regarding Winston’s bad faith allegations.

Winston sued State Farm regarding a claim for damage to Dr. Winston’s residence caused by a hail storm.