Dallas Fort Worth Insurance Lawyer Blog

Business Property Policy Exclusions

March 27, 2018 | Mark S. Humphreys

When an insurance attorney gets a new client on an insurance related claim, one of the first things he wants, is a copy of the policy to read. And when he reads the policy, he wants to know what the exclusions are that are in the policy.

The basic form and broad form business policy contains exclusions. In fact, the many pages of an insurance policy are, when read, pages explaining what is excluded or limitations on what will be paid. Sample exclusions on the broad form are:

Ordinance or law — When a building is not in compliance or conformity with local building codes or laws and must be rebuilt or replaced, local laws require that the new structure conform to current requirements. Because ordinance or law exposures are not anticipated by basic premium rates, the cause of loss forms contain an ordinance or law exclusion, which excludes any part of a loss resulting from the enforcement of any ordinance or law regulating the construction or repair of property. This is discussed in the 1962, Texas Supreme Court opinion styled, Employers Mutual Casualty Co. of Des Moines v. Nelson.

Business Personal Property Coverage – Duties Of Insured

March 25, 2018 | Mark S. Humphreys

Like all property insurance policies, the Business Personal Property (BPP) policy imposes a number of duties on the insured. Insurance attorneys will tell these duties constitute conditions precedent to coverage; that is, the insured must comply with these requirements before the insurance company is obligated to pay any loss. This requirement was made clear in the 1999, 5th Circuit opinion styled, Griggs v. State Farm Lloyds. These duties generally include:

the insured must provide notice to the insurer of the loss
the insured must preserve the property as much as possible

Commercial Insurance – Building & Personal Property Coverage

March 24, 2018 | Mark S. Humphreys

Lawyers who handle commercial insurance claims can tell you that the most common type of commercial property insurance is the Building & Personal Property Coverage Form.

The Building & Personal Property (BPP) coverage form is the most commonly used policy to insure commercial buildings and contents. Covered perils for the BPP are listed in separate cause-of-loss forms.

The BPP generally covers:

Insurance Policy And Replacement c

March 22, 2018 | Mark S. Humphreys

What is the difference between replacement cost and actual cash value. Knows the difference can mean many thousands of dollars on a claim.

Pursuant to the 1998, Austin Court of Appeals opinion styled, Great Texas County Mutual Insurance Co. v. Lewis, “replacement cost” is when the insurer pays the insured the “amount necessary to repair or replace” the damaged property with another “of like kind and quality.” The insurer is agreeing to restore the property to a condition substantially the same as that existing before the damage was sustained.

In Great Texas, the court said that replacement cost is a measure of loss that does not allow for depreciation. As an example, the Great Texas case involved damage to a car engine. The insurer calculated the cost of repair to be $3,608.27. From this amount the insurer subtracted a deductible of $527.00 and $2,031.72 for betterment or depreciation, leaving $1,049.55, which the insurer offered the insured to discharge its obligation under the property damage section of the policy. The court stated that, because the car was a functioning or operating automobile before the damage, the insurer was required to pay an amount necessary for the repair or replacement of an automobile of that character. If the insurer were allowed to to discharge its obligation by paying the insured $1,049.55, the insured would not have a sum sufficient to restore his engine and automobile to a functioning or operating state. Therefore, the insurer was required to pay the cost of a remanufactured engine without deducting for betterment or depreciation.

All Risk Policies Vs. Named Perils Policies

March 20, 2018 | Mark S. Humphreys

Insurance lawyers may know the difference between the two above types of policies but most people do not know the difference.

Property insurance may be issued on either:

An “all risk” basis, meaning that all risks of physical loss are covered except for excluded perils.

Air Ambulance Bills

March 18, 2018 | Mark S. Humphreys

People will speak of “sticker shock” in reference to buying automobiles. The term is also used when seeing hospital bills. But the biggest shocker of all can be the bill for an air ambulance.

The Claims Journal published an article in February of 2018. The article is titled, Appellate Court Rules Insurers Not On The Hook For Air Ambulance Reimbursement Rates. It discusses a case from the Austin Court of Appeals. Here is what it tells us.

The Austin Court of Appeals issued a decision in a case involving the high prices that air ambulances charge Texas workers’ compensation insurers.

Auto Insurance Concerns

March 17, 2018 | Mark S. Humphreys

Attorneys handling auto insurance problems will see situations where a person has their insurance raised after a claim. This is sometimes done in violation of Texas laws. The Washington Post published an article in February 2018, that deals with auto insurance rates. It is titled, Auto Insurance Rates Have Skyrocketed – And In Ways That Are Wildly Unfair. Here is what the article tells us.

Auto insurance rates have increased at more than twice the rate of inflation recently. Nationally, the rates are $1,427. Catastrophic weather caused some of the increase in 2017. Ineffective state regulators also contribute by not holding auto insurance companies in check.

Consumer advocates say insurers have become adept at using Big Data to set rates for drivers using formulas that are complex and sometimes hidden from view. In the crazy, mixed-up world of car insurance, credit ratings and college diplomas can have a bigger bearing on car insurance premiums than someone’s driving record. The people most often hurt are low-income drivers who can least afford to buy state-mandated insurance, they say.

What Is An Insurable Interest?

March 15, 2018 | Mark S. Humphreys

An “insurable interest” exists when the insured derives a pecuniary benefit or advantage by the preservation and continued existence of the property or would sustain a pecuniary loss from its destruction, according to the 1993, Dallas Court of Appeals opinion, Jones v. Texas Pacific Indemnity Co.

In the 1986, Tyler Court of Appeals opinion, Thompson v. Trinity Universal Insurance Co., the sole owner of a corporation that was a holding company for business interests who suffered a pecuniary loss from the destruction of a building owned by the corporation has an insurable interest in the building.

In the 1985, San Antonio Court of Appeals opinion, St. Paul Fire & Marine Insurance Co. v. Daughtry, the owner of a house offered the house to a house mover, as long as he could remove it by December 31, 1982. The owner also gave the insured a letter permitting him to move it after January 1, 1983, if the mover failed to exercise his option. Before the mover’s option expired, the insured applied for a “builder’s risk” policy on the house, and the insured’s agent issued a binder on the policy. A fire destroyed the house on December 21, 1982. The court held that the insured did not have an insurable interest in the property, as he suffered no pecuniary loss as a result of the destruction of the property.

Insurable Interest Discussion

March 13, 2018 | Mark S. Humphreys

Insurance lawyers will tell you that a person must have an insurable interest in the insured property to recover under an insurance policy. This is also stated in the 1993, Dallas Court of Appeals opinion, Jones v. Texas Pacific Indemnity Co.

The purpose of the requirement of an insurable interest is to discourage the use of insurance for illegitimate purposes as discussed in the 1999, Austin Court of Appeals opinion, Valdez v. Colonial County Mutual Insurance Co.

The 1998, Fort Worth Court of Appeals opinion, Foust v. Old American County Mutual Fire Insurance Co., tells us an insurable interest exists when the insured derives a pecuniary benefit or advantage by the preservation and continued existence of the property or would sustain pecuniary loss from its destruction.

Commercial Property Insurance

March 11, 2018 | Mark S. Humphreys

Commercial property insurance includes all forms of insurance covering property loss exposures of both business and non-profit organizations. The most common commercial property coverages are provided under standard forms developed by Insurance Services Office, Inc. (ISO) or the American Association of Insurance Services (AAIS). In many instances, an organization’s property is provided through “package policy.” A package policy ordinarily provides different types of coverage (e.g., property insurance and liability insurance). A monoline policy, in contrast, provides only one distinct type of coverage. The most common form of commercial property insurance is the Commercial Package Policy printed by ISO since 1986. Commercial property insurance can consist of:

Building and contents insurance which provides coverage on insured building and the property contained in the buildings.
Machinery insurance covers steam boilers, pressure vessels, and various types of machinery such as air conditioning equipment, air compressors, turbines and all types of production machines.