Texas Case With Lots Of Insurance Law

Grand Prairie residents beware; Weatherford residents beware; Arlington, Mansfield, Dallas, Fort Worth residents beware. Here is a case that makes you angry at the insurance company when you get into the details of how this person was treated by her insurance company and those associated with them.
The case is kinda old, decided in 2001. The style of the case is long, Lois Jones v. Ray Insurance Agency a/k/a Azteca Insurance and / or Alamo Insurance, and Collision Clinic, Inc., State & County Mutual Fire Insurance Company and Harbor Insurance Managers. It was decided by the Court of Appeals of Texas, Corpus Christi.
The facts of the case are long, but not really complicated. Lois Jones purchased a new 1998 Pontiac and purchased a State & County Mutual Fire Insurance Company insurance policy (State & County). This policy was purchased from the agent, Ray Insurance Agency a/k/a Azteca Insurance and / or Alamo Insurance (Ray). The policy administrator was Harbor Insurance Managers (Harbor). When purchasing the policy, Jones informed the agent that her sister lived with her, and was advised by the agent, that would not be a problem, and that as long as she paid her premiums on time she would have insurance. The policy with State & County excludes coverage for anyone residing with Jones age fourteen or over unless listed. Ms. Jones paid the November and December premium payments. The policy was to be effective from November 7, 1997 (the date of purchase) thru May 7, 1998.
On December 28, 1997, Jones Pontiac was severely damaged when hit by another auto driven by an uninsured drunk driver. Her Pontiac was towed to Collision Clinic, Inc. (Collision) The day after the accident, she was told she was fully covered for the accident. Less than thirty minutes later she was phoned and told the policy cancelled because she had not excluded her sister as a driver. Later she was told the cancellation was because she had not provided a copy of her driver’s license. State & County and Harbor allege the cancellation was mailed on November 25, 1997, but Ms. Jones denies ever receiving the letter. The letter allegedly advised Ms. Jones that her policy would cancel on December 4, 1997. During this dispute, Collision foreclosed on the Pontiac for repairs that had been performed despite the fact that Jones had never been given a repair estimate. Collision’s foreclosure caused Jones bank to foreclose and repossess the Pontiac even though she had continued to make her monthly payments. State & County never returned Jones December premium payment, which had been made on December 1, 1997, or any part thereof.
There are many issues presented in this case that are related to laws found in the Texas Insurance Code. Texas Insurance Code, Section 551.001, deals with how cancellations are to be handled with personal automobile insurance policies. In this case, the facts appear to be that the required ten day notice of cancellation was not properly handled in that the notice of cancellation was allegedly mailed at such a time that the earliest it could have been received by Ms. Jones was December 3 or 4. Yet, she had made a payment on December 1, 1997, which was accepted and never refunded in whole or in part. This failure to refund the premium became a big reason the court ruled in Jones favor. Plus the court found that as a matter of law the cancellation notice was void because it did not satisfy the requirement that there be a ten day notice prior to cancellation.
Other issues about her sister not being listed on the policy and the insurance company not having a copy of her drivers license were addressed as follows. The court pointed out that Jones had informed the agent about her sister and the agent said that Jones would be covered and the policy would stay in effect as long as she paid her premiums. So, atleast the agent knew of Jones sister and thus as an agent of the company this knowledge was imputed to the company. As for the license, the court pointed out that the insurance company had Jones drivers license information on the application, her name, address, date of birth, drivers license number, etc.
Going back to the failure of the insurance company to refund the premium payment, the court ruled that the insurance company’s acceptance and processing of the check and refusal to refund the monies argueably prevents them from now asserting the policy was cancelled.
There are other insurance law issues in this case plus lots of issues falling under the Texas Deceptive Trade Practices Act. The case is a good and fairly easy read for someone trying to understand how atleast one of these insurance lawsuits was dealt with by the Texas courts.