Dallas Fort Worth Insurance Lawyer Blog

Jury Says No To Punitive Damages

November 21, 2009 | Mark S. Humphreys

The previous post to this blog talked about penalties Texas insurance companies face when they do not properly handle a claim that is presented to them by one of their insureds. Recently an insurance case was tried in Federal Court in Mississippi. The case arose out of a lose suffered by Reginald Bossier for damages resulting from Hurricane Katrina. In the case, the jury declined to award any amount of monies for punitive damages.

The insurance company being sued was State Farm. Notice also, that this case was in Federal Court. Earlier posts on this blog have pointed out that the insurance company would always prefer to be in Federal Court, rather than State Court. In this case, the jury compensated Bossier $52,300 for damages to an outbuilding destroyed by Hurricane Katrina. However, the jury refused to punish State Farm for any amount of punitive damages. State Farm had paid for some home damage resulting from the high winds but was refusing to pay for damages caused by water.

The attorney for Bossier had asked the jury to award Bossier $2 million to punish State Farm. That anything less than $2 million would not get State Farm’s attention. The attorney also pointed out that “State Farm would rather pay its lawyers than its insureds.” She also told the jury that if State Farm were not punished then they would continue to deny claims.

Penalties For Insurance Companies In Texas

November 18, 2009 | Mark S. Humphreys

Let’s say your house in Dallas burns down and the insurance company wrongfully denies your claim. Or your boat in Weatherford sinks in the lake and your insurance company tries to tell you they are not going to pay because of a late payment on your insurance policy. How about you are driving your car in Fort Worth and are involved in a wreck and your insurance company denies coverage due to the car not being properly listed on the policy. Another example, your neighbors wife, in Grand Prairie, dies of an illness she has had and when the husband makes a claim for life insurance benefits he is denied because the insurance company says they committed a fraud in the application for coverage.

Okay, now lets say you can prove the insurance company was wrong in each of the above situations. What next? Do they just pay the benefits and go away? What about the extra heart ache you went through? What about the ten month delay in paying you the benefits you were entitled to? What about legal expenses? Can the insurance company just intentionally do you wrong and get away with it, by just paying what they should have paid in the first place?

Here are some answers. First, get to an experienced Insurance Law Attorney to help you. Then if you are so inclined, go to the Texas Department of Insurance web-site and read a few of the rules the insurance companies have to follow.

Good Health Requirement For Life Insurance Policy

November 17, 2009 | Mark S. Humphreys

A person who buys a life insurance policy in Dallas, Texas, or in Arlington, Grand Prairie, Fort Worth or out in Weatherford in Parker County should have the same concern as everyone else when they purchase the policy. Is this policy going to pay benefits to the benficiary named in the policy? After all, that is the only reason it is being purchased.

A Federal Court case decided in 2007, gives good reason for looking over the policy and reading it well before purchasing it. The case, Assurity Life Insurance Company v. Grogan, was presented with the following policy condition: The policy coverage did not go into effect until the “first full premium was paid during the Proposed Insured’s lifetime and continued good health.”

Soon after purchashing the policy, the insured had a biopsy performed on a lump on his neck and was diagnosed with Hodgkin’s disease. He died a few months later from complications.

Small $$$ Insurance Claims And Staying Out Of Federal Court

November 16, 2009 | Mark S. Humphreys

It is not unusual for an attorney to wish he could land a case worth millions of dollars. Every person who gets taken advantage of by an insurance company wishes they could sue the company and be compensated for millions of dollars. But the reality of everyday wrongs in the area of insurance law involve sums of money totaling much smaller amounts than millions of dollars.

What most people do not realize is the costs sometimes involved in fighting insurance claims. Most of the time an insurance company is not all that concerned about the cost. Their goal is to discourage people from challenging their decisions on claims. A lawsuit in State Court may cost an insurance company anywhere from $100 per hour to $300 per hour. That same case in Federal Court may cost $300 to $600 per hour with more hours being spent.

So why do insurance companies try to get lawsuits that are filed in State Court, removed to Federal Court? Because their chances of winning is usually better or if they lose, the dollar amount they lose is generally less when in Federal Court.

Sueing The Texas Insurance Adjuster

November 15, 2009 | Mark S. Humphreys

There are many times where the insurance adjuster himself, commits a wrong against a policy holder. This is an important issue. Here is why. When an Insurance Law Attorney is representing a client in a claim there are a lot of strategies. One important strategy is to file a lawsuit in a court that is most favorable to achieving a favorable result. In that regard, State Court is almost always a better place to fight the insurance company than is Federal Court. Most insurance companies have home bases located out-of-state whereas 99% of adjusters will live in-state. This matters because the Federal Rules of Civil Procedure require that out-of-state defendants in a lawsuit be allowed to defend themselves in Federal Court unless there is more than one defendant and atleast one of the other defendants is an in-state resident.

For the reason explained in the first paragraph, it is important to be able to articulate a particular wrong that the in-state adjuster committed. The adjuster will be defended by an insurance company, usually the employer, thus a lawsuit against the adjuster in his individual capacity is not a futile act. Insurance company attorneys are going to always want to get the lawsuit removed to Federal Court if there is any way possible to do so. Repeating what was just said, this is because Federal Court is usually more favorable to the insurance company.

A case decided on October 27, 2009, discusses this issue. The case, Lakewood Chiropractic Clinic v. Travelers Lloyds Insurance Company and Sonja R. Victor, was a claim for benefits resulting from hurricane damages. Lakewood alleged that the adjuster, Sonja, violated several insurance statutes. Lakewood also alleged these same violations of Travelers. The problem here is that there was not a distinction made between what Sonja did and what Travelers did, that was wrong.

Under-Payment Of Texas Insurance Claims

November 14, 2009 | Mark S. Humphreys

Can it be a surprise? Insurance companies appear to be getting caught in under paying on claims. The Texas Windstorm Insurance Association (TWIA) seems to be caught in some controversy regarding its claims handling along the Texas Gulf Coast. Keep in mind the problems being experienced could just as easily be happening in Fort Worth, Dallas, Grand Prairie, Arlington, or even a small town like Weatherford out in Parker County.

This problem is written about in an article in the Houston Chronicle titled “Lawsuit Says Windstorm Insurer Rigged Process”. The article discusses TWIA using prices lower than market rates to estimate materials and repair costs. TWIA is said to also be unfairly limiting costs on roof repairs and discouraging the reopening of closed claims.

In a lawsuit resulting from some of the abuses by TWIA, documents and software is said to have been discovered that supports the claims that the abuses are being committed. One example of the abuse was discovered when one adjusting firm reported the market rate for roof repairs to be $230 to $255 per 100 square feet, but TWIA’s price was $182. In another situation it is said that they suggested using shingles off one house that were not in too bad shape, to put on another house. This does not sound right to most people but may actually be allowed depending on the language in the insurance policy.

Recent Texas Insurance Policy Interpretation

November 10, 2009 | Mark S. Humphreys

The Texas Supreme Court ruled on an insurance policy interpretation case on October 30,2009. This case is, Chrysler Insurance Company v. Greenspoint Dodge of Houston, Inc.

This case involves an insurance coverage dispute, the topic of which is liability policies insuring a corporation and its officers and others. The corporation was sued for defamation. One key here is that the policies at issue excluded coverage for defamatory statements made by the insured, that the insured knew to be false. The lower court said that the employees involved may not have been “principles”, but were “vice-principles” and thus were covered under the policy.

Some facts here are that a Noe Martinez was fired by Greenspoint after the Greenspoint’s general manager, comptroller, and used car sales manager defamed and disparaged Martinez. The general manager’s nephew was hired to take Martinez’s place. Martinez sued and won.

What To Do In Texas When The Insurance Company Says There Is No Coverage Under The Policy

November 8, 2009 | Mark S. Humphreys

An incident happens. Maybe your house in Dallas has someone inside who falls down the stairs. Maybe your car in Arlington is involved in a wreck. Maybe your business in Grand Prairie suffers a loss due to someone falling on the steps. Maybe the life insurance policy you purchased on your Mom in Weatherford is now denying coverage, after the funeral. What if the disability policy you had on your wife’s job in Fort Worth is denied, after she becomes disabled?

If any of the above happens you actually have two main things you can do. The first and most common is to just sue the insurance company for various violations of the Texas Insurance Code and violations of the Texas Deceptive Trade Practices Act. You can sue for breach of contract and fraud and misrepresentation and a few other things that are variations of the Insurance Code and DTPA causes of action.

The second thing that can be done is called a Declaratory Judgement cause of action. Attorneys refer to this as a “dec action”. This is where an attorney files papers with a Court saying, “Judge, declare this thing we have before you as (fill in the blank)”. A dec action is used quite often in insurance disputes. It is used both by attorneys for individuals requesting benefits under a policy and by insurance company attorneys asking the Court to declare that certain benefits do not exist within a policy.

Diminished Value Of Your Automobile In Texas

November 7, 2009 | Mark S. Humphreys

Pretend for a minute that you are driving your car in the Dallas Fort Worth area going west. You drive through Grand Prairie and Arlington and are on your way to Weatherford to enjoy the “First Monday” market. All of a sudden a dog runs in front of you and you swerve to miss it and hit a telephone pole. You are lucky in that no one is injured, but your car has $3800 worth of property damage. You are lucky again because you have collision coverage on your automobile and they repair your car and you are only out a $500 deductible.

Sounds ok so far, right. Well think about it for a minute. Your car was only a year old because you sell your car every two to three years and buy a new one. When you sell this one you will either have to disclose to the buyer the wreck or they will easily find out. So what does that mean? It means this: Your car is worth less because of the wreck than it would have been had it not been involved in a wreck. This is called the “diminished value”.

The nest question is: What can you do about it? This question was answered by the Texas Supreme Court in 2003. In 2003, the Court decided the case, American Manufacturers Mutual Insurance Company v. Schaefer. Maunufacturers was Schaefers insurance company. They fixed Schaefers car. Schaefer did not dispute the quality or adequacy of the repairs. But he did say that Manufacturers owed him an additional $2600 due to market perceptions that a damaged and subsequently repaired vehicle is worth less than one that has never been damaged. Again, this is called the diminished value and he expected Manufacturers to pay the extra money to compensate him for the lose.

Getting Insurance Company Records

November 6, 2009 | Mark S. Humphreys

In the State of Mississippi, a policy holder filed a lawsuit seeking access to Mississippi Insurance Department records. The lawsuit is seeking records that would show the dollar amount of Katrina claims denied by insurance companies.

The courts in Mississippi and other coastal areas have loaded up with lawsuits related to claims denials by insurance companies. The claims get denied for a range of reasons but a lot deal with issues of whether or not the damage to property is the result of floods, the result of winds, storm surge, or flying debris.

The person filing the lawsuit, a Kevin Buckel, is also trying to get passed into law in Mississippi, a Policyholders Bill of Rights. Each time this proposal has been introduced into the State Legislature, the legislation has died in committee.