Dallas Fort Worth Insurance Lawyer Blog

Insurance Lawsuits Need To Be Specific

October 31, 2017 | Mark S. Humphreys

Lawsuits need to be specific when claiming what an insurance company, adjuster, or agent did that caused harm to their insured. This is illustrated in an Eastern District opinion styled, Scott Jengemuhle and Ty Properties, LLC v. Acceptance Indemnity Insurance Company and Robert Saucier.

This case relates to an insurance claim for storm related damages to Plaintiffs’ business and property. Plaintiffs file suit in State Court and Defendants removed the case to Federal Court. Plaintiffs allege that Acceptance did not provide coverage sufficient to complete necessary repairs to the property. Saucier is the adjuster assigned to the claim. Acceptance asserts that Saucier was improperly joined in the lawsuit and thus, his joinder should be disregarded for purposes of diversity. Plaintiff asserts that he has sufficiently alleged causes of action against Saucier to maintain the claim against him.

To establish fraud in joining a non-diverse defendant, the removing party must establish the plaintiffs’ inability to establish a cause of action against the non-diverse party in state court. The Court must decide whether there is a reasonable basis for predicting that Plaintiffs might be able to establish liability on the pleaded claims in state court.

Disability Insurance Coverage Issues

October 29, 2017 | Mark S. Humphreys

In a definition of “total disability in an individual accident and sickness policy or hospital, medical, and dental service corporation subscriber contract, the inability to perform duties may not be based solely on an individual’s inability to perform “any occupational duty,” but the insurer may specify the requirement of the inability of the insured to perform all of the substantial and material duties pertaining to his or her regular occupation, or words of similar import. This is found in the 28 Texas Administrative Code, Section 3.3012(b).

The policy may further provide coverage for “partial disability,” which is typically defined as the insured’s inability to perform one or more but not all of the essential duties of his or her employment or occupation.

Disability policies normally require that any claimed disability occur while the policy is in effect or within a specified time after any claimed accident or injury.

Disability Policy Language

October 28, 2017 | Mark S. Humphreys

As in all insurance policies, the language used in the policy will be used in enforcing and interpreting the policy.

In the 2003, Texas Supreme Court opinion, Provident Life and Accident Insurance Co. v. Knott, the court read the policies in question defining the term “total disability” to mean that the insured must, in order to be considered totally disabled under the policies, be unable to “perform all of the important daily duties of his occupation.” The then held that the trial court’s granting of summary judgment in favor of the insurance company was appropriate given that the insured, a gynecologist seeking benefits for total disability under those policies was able to see patients, perform surgery, consult with other physicians and perform administrative duties.

A long term disability policy that defined disability in part as the inability to perform “each of the material duties” of the insured’s regular occupation required only that the insured be unable to perform any single material duty of her occupation in order to be considered disabled, not that she be unable to perform all duties of that occupation. This was in the 2002, U.S. 5th Circuit opinion, Lain v. UNUM Life Insurance Co. of America. No concrete evidence disability insurer’s determination of non-disability for insured who suffered recurring severe chest pains, while overwhelming evidence supported disability claim, warranting benefit award under ERISA civil enforcement provision: the insured’s time at home doing research on her medical condition did not equate to ability to practice law, as insurer contended; insurer focused on certain “normal” test results to support its finding, but test results were primarily abnormal and also could not clinically measure insured’s pain; and insurer’s reliance on insured’s failure to seek psychiatric care prior to ceasing employment was misguided since her disability was physical.

Private Disability Claims

October 26, 2017 | Mark S. Humphreys

It needs to be noted at the beginning here. Private disability claims are different from government disability claims and also from disability claims that are governed by ERISA.

This posting deals those disability claims that are from private policies or policies other than government or ERISA.

Disability policies will usually specify an amount that will be paid in the event a claimant becomes disabled (as that term is defined in the policy) and a maximum length of time for which such benefits will be paid. As an example the policy may pay $500 per month for up to 10 years.

Auto Insurance 515A Endorsement

October 24, 2017 | Mark S. Humphreys

Weatherford insurance lawyers know about the 515A Endorsement (a named driver exclusion) that applies to auto policies. These 515A Endorsements are discussed in a 2013, El Paso Court of Appeals opinion styled, Stadium Auto, Inc. v. Loya Insurance Company.

Olga Salazar purchased and financed a vehicle through Stadium. A Loya policy was issued which contained a 515A Endorsement listing Junior Sanchez as an excluded driver. Junior had a wreck in the vehicle after allegedly taking the keys from Olga’s purse without permission. Olga ceased payments to Stadium and Stadium sought payment from Loya. Loya refused coverage based on the exclusion of coverage for Junior.

Stadium sued Loya alleging violation of Texas Insurance Code, Section 541.060 and the Texas DTPA, Section 17.46(b). Stadium also alleged that Loya was estopped from denying liability based on the 515A Endorsement. Loya also asserted that they were entitled to payment based on the 530A Endorsement that provides coverage for the loss payee despite the named driver exclusion.

Homeowners Policies And Flood Insurance Awareness

October 22, 2017 | Mark S. Humphreys

The Houston Chronicle ran a story of September 20, 2017, that all homeowners need to read. It is titled “Flooded Houston Homeowners Might Have Been Spared Ruin — But Only If They Read The Fine Print.”

25 words of a public document that could have spared thousands of homeowners from losing everything sat tucked away in a Fort Bend county clerk’s office for the past 20 years.

“This subdivision is adjacent to the Barker Reservoir and is subject to extended controlled inundation under the management of the U.S. Army Corps of Engineers.” These 25 words, in the finest of fine print were of public record.

Life Insurance – 2 Year Incontestability Clause

October 21, 2017 | Mark S. Humphreys

Fort Worth insurance lawyers need to be aware of a life insurance policy’s incontestability clause.

All life insurance policies must contain an incontestability clause, which is a provision that the policy will be incontestable after it has been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums. The statute requiring this is found in the Texas Insurance Code, Section 1131.104 for life insurance policies and Article 3.50, Section 2(2) for group life insurance policies. Also, look at Sections 705.101 to 705.105. The effect of these clauses is to limit the preceding defenses so they can apply only during the first and second policy years.

The purpose of the incontestability clause is to protect the insured from a contest as to the validity of the policy after the set period has expired. This is discussed in the 1972, Texas Supreme Court opinion styled, Minnesota Life Insurance Co. V. Morse.

Letters To And From Insurance Companies

October 19, 2017 | Mark S. Humphreys

Insurance attorneys understand the importance of proper communications with an insurance company.

The Claims Journal, which is a publication for the insurance industry, published an article in September 2017, suggesting ways for a company to properly communicate with their insured. The article is titled, 10 Tips On Responding To Claimant Complaints.

The substance of the article is below but before discussing it, keep this is mind. Not every claim is going to be denied or need attorney assistance. However, any communications the insured has with the insurance company needs to follow the suggestions the companies make for communicating with their insured.

Insurance Adjusters Not Knowing What They Are Doing

October 17, 2017 | Mark S. Humphreys

Insurance adjusters who are inexperienced and do not know what they are doing can hurt insureds who just want their claim paid. Reuters ran a story on September 11, 2017, dealing with the shortage of trained and experienced insurance adjusters after Hurricanes Harvey and Irma. The story is titled “Insurers Ache For Qualified Inspectors After U.S. Hurricanes”.

Insurance companies were scrambling to find adjusters in Texas and Florida after hurricanes Harvey and Irma hit within two weeks of each other, causing tens of billions of dollars’ worth of property damage.

Although insurance companies maintain a number of adjusters across the U.S. year round, there is a need to redeploy staff from other areas or hire contract adjusters to fill gaps when catastrophes like Harvey and Irma hit. It is important that these adjusters get deployed quickly because payments on claims is critical to residents and business owners awaiting these insurance payments.

Life Insurance – Other Requirements For Misrepresentation Defense

October 15, 2017 | Mark S. Humphreys

Arlington life insurance lawyers know the requirements insurance companies must meet to successfully defend a life insurance case based on the defense of misrepresentation. Misrepresentation in the policy application is the most common reason for denial of a claim for benefits.

The Texas Insurance Code, Sections 705.001 to 705.005, prohibits a defense to coverage based on misrepresentations in an application, unless the application is attached to the policy. The statute is affirmed in the 1994, Texas Supreme Court opinion, Fredonia State Bank v. General American Life Insurance Co.

As was stated in another Texas Supreme Court opinion in 1975 styled, Johnson v. Prudential Insurance Co. of America, “Applications for insurance and other written statements made in that connection are often filled out or written by insurance agents or others and only signed by the insured. It has often been held that it is the underlying legislative intention to require that the insured have the material terms of the contract at hand during his lifetime in order that he might examine and correct any misrepresentations which have been made the basis of the insurance coverage.”