Claims Handling
No Safe Harbor: Hinojos Holds “Late Payment” Penalties Apply Despite Insurer’s Timely Payment of an Appraisal Award
On March 19, 2021, the Texas Supreme Court issued a 7-2 decision and Opinion by Justice Jane Bland holding there is no appraisal payment safe harbor from Chapter 542 late payment liability for insurers that timely pay appraisal awards after accepting coverage when those payments are late under the statute. See Cause No. 19-0280, Hinojos v. State Farm Lloyds et al., slip op. at *2. In so holding, Hinojos emphasizes that “claim” under Chapter 542 means the amount that “must
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More (Or Less?) on Indemnity: A Brief Primer on Texas Construction Anti-Indemnity Act
The Texas Construction Anti-Indemnity Act, codified in Subchapter C of Chapter 151 of the Texas Insurance Code, renders void certain construction indemnity agreements that purport to indemnify the indemnitee for its own fault, even if that fault is shared or contributory. While most states now have some type of anti-indemnity statute, Texas is one of only a handful of states whose statutes void related additional-insured procurement and policy provisions as well. The Act applies to any “construction contract” for a
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Fourth Court of Appeals Imposes New Post-Accident Duty on Auto Insurers
On April 1, 2020, a divided en banc Fourth Court of Appeals imposed a new post-accident duty on auto insurers. In a case of first impression, the Court reversed a Bexar County trial court’s summary judgment in favor of an auto insurer. The Appellate Court found that the auto insurer had a duty to exercise reasonable care when it instructed its insured driver to take photographs of her vehicle immediately following a one-car accident because of the special relationship
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Show Me the Money? Not So Fast!
In a personal injury case, tort claimants typically submit medical bills showing treatment received for injuries. Settlements paid out of insurance policy benefits are often meant to cover such expenses. After settling, plaintiffs’ attorneys routinely negotiate a reduction of the submitted bills directly with the medical providers, leading to a bigger share of the recovery for their clients.What happens when a carrier pays a hospital’s bill directly? Such direct payments generally reflect a reduction in the original billed amount. We’ve
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A Cautionary Tale. . .
In USAA Texas Lloyds Company v. Griffith, 2019 WL 2611015 (Tex.App. –Corpus Christi, June 26, 2019), the Corpus Christi Court of Appeals affirmed a Hidalgo County jury verdict that awarded Plaintiff John Griffith $776,000 after USAA seemingly performed an unreasonable investigation of his roof claim. The case provides insurers with an example of how a simple oversight can turn a bona fide dispute into a bona fide mess. Griffith held a USAA policy on his home in McAllen, Texas. His
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In Win for Insurers, Court Rejects Prejudice Limitation on Express Claim Reporting Condition
Following a hail storm in April 2016, insured Blanco West Properties failed to discover and report damage to the roof of its commercial building until October-November 2017. Blanco West’s insurer, Arch, denied the claim based on a policy endorsement that required hail-related claims to be brought within one year of the event. Appealing the district court’s grant of summary judgment in favor of Arch, the insured argued that Arch was required to demonstrate it was prejudiced by Blanco West’s failure
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Brainard Rule Under Attack in Texas House of Representatives
Uninsured and underinsured (“UM/UIM”) motorist insurance coverage continues to be a hotly debated topic, as attorneys representing insureds seek ways to recover attorneys’ fees in this hybrid cause of action. As we recently reported, the Texas Supreme Court recently turned back one attempt when it denied review in the case of Weber v. Progressive. Currently, the long-established Brainard rule is under legislative “attack” from H.B. 1739. H.B. 1739 seeks to do what Weber could not: eliminate the requirement that she
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When Roadmaps are a BAD Thing . . .
Unfortunately for insurance professionals dealing with claims in multiple jurisdictions, the state-specific rules regarding reservations-of-rights (“ROR”) letters (aka coverage positions letters, non-waiver letters, etc.) can be as varied as insurance laws themselves. Further uncertainty is created because most of these “rules” are judicially created, are rarely set forth in absolute terms, and often require context that may or may not be evident in the scant case law addressing them. Because some jurisdictions treat the failure to properly reserve rights with
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Pre-Suit Demands: Insured’s counsel must check all the boxes, but detail may still be vague.
Perrett v. Allstate Insurance Company, 2018 WL 2864132 (S.D. Tex. June 11, 2018) is the first case that scrutinizes whether or not a pre-suit notice properly complies with the new requirements of § 542A.003 of the Texas Insurance Code and therefore gives some guidance to attorneys about how strictly courts will enforce each statutory requirement. Section 542A.003 of the Texas Insurance Code provides that “not later than the 61st day before the date a claimant files an action to which
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To err is human. To disagree on an appraisal award is not grounds to set it aside.
In Abdalla v. Farmers Ins. Exchange, No. 07-17-00020-CV, 2018 WL 2220269 at * 1 (Tex. App.—Amarillo May 14, 2018, no pet. h.), the Amarillo Court of Appeals rejected an insured’s attempt to convert a disagreement among appraisers regarding the extent of damage into a reason to set aside a valid appraisal award. The court of appeals affirmed the trial court’s decision denying Abdalla’s motion to vacate the umpire’s award and granting summary judgment in favor of Farmers. Abdalla sued Farmers alleging breach
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