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Houston Car Accident News | Houston Insurance Claim News | Houston Business Litigation News

Part of being a successful Houston Law Firm involves keeping up with current events, following important Houston legal cases, and noting interesting court cases and lawsuits. At Durrett Law Firm, we like to keep our clients and readers informed with the latest Houston car accident news, Houston business litigation news, and Houston insurance claims news.

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Insurance Law

• Homeowners Can Recover General Contractor's Overhead and Profit
  Aug 25, 2010

  NOLA.com is reporting on the insurance settlement reached in the Stephanie Press v. Louisiana Citizens Fair Plain Insurance Corp. case. In that case, the parties agreed that a Louisian homeowner can recover overhead and profit (typically 20% of total repair costs) when acting as their own general contractor. To act as your own general contractor, the homeowner must hire three separate trades, such as electrician, roofer and drywall installer. This acknowledgement is a victory for policyholders. - 1 - 10

• Flood Insurance Is $8 Billion In The Red
  Aug 10, 2010

  The National Flood Insurance Program insures areas of high risk in coastal communities. Without this insurance, construction in these areas would be reduced. According to the Houston Chronicle article linked below, Texas receives more of this governement insurance program than any other state. The article describes the problems with the flood insurance program and identifies those with financial interests in seeing that the program continues. - 2 - 10

• Kemah Orders Destruction of Ike Damaged Homes
  Aug 05, 2010

  Hurricanes cause a significant amount of destruction. Since Ike, nearly two years ago, most homeowners have received insurance settlements and repaired their homes. However, some homeowners have not repaired their homes. Some homes have not been repaired because insurance carriers have underpaid claims. Whatever the reason behind the lack of repair, Kemah believes that vacant structures are a danger to the community. For that reason, the city has taken steps to order the demolition and removal of vacant or damaged homes whose owners have not made the necessary repairs. Generally, this is a good law. Damaged and vacant homes attract vagrants and a criminal element, Kemah is better off without. By waiting for nearly two years, Kemah has provided the homeowner with a fair amount of time to find ways to deal with their loss that may not include insurance. - 3 - 10

• TWIA Announces Slab Claim Settlement
  Jul 19, 2010

  Various news outlets are reporting that TWIA has announced a settlement with plaintiff's firms for the settlement of certain Hurricane Ike claims. According to an article, the settlment will resolve 2400 insurance claims in Galveston County, Texas. A part of the problem for failing to reach settlment earlier was causation. The TWIA policy only covers damage for loss from wind. In Hurricane Ike allocating the loss between wind and water or storm surge was extremely difficult. - 4 - 10

• Texas Attorney General says "Don't believe Travelers Ad"
  Jul 09, 2010

  Amid the rising concern regarding a Travelers Insurance Company television ad entitled "Driving Your House", Texas Attorney General Gregg Abbott tells Texans not to believe the ad. But the AG went a step further and sent a cease and desist letter to the company behind the ad. The ad is misleading because it inaccurately suggests that Texans can lose their home if the cause an auto accident. In Texas, the broad homestead exemption protects your homestead from most collection activities.
  
  The AG is looking out for Texans. - 5 - 10

• Travelers Insurance Broadcasts Misleading Ad in Texas
  Jul 08, 2010

  Texas Watch, an industry watch dog, is critcizing Travelers Insurance Company for running a television ad falsely stating that a Texas automobile driver could lose his home without adequate insurance coverage. The Texas Constitution is fairly specific about exceptions to the homestead exemption and causing an auto accident is not one of them. - 6 - 10

• LA Fitness $200,000 Vandalism Claim Should Be An Insured Loss
  Apr 05, 2010

  Channel 13 KTRK is reporting that vandals broke into an LA Fitness on Highway 6 in Ft. Bend County, Texas early Sunday morning through a front window to the fitness club. The vandals emptied fire extinguishers, four one-gallon paint cans, juice, food and started a small fire which activated the fire extinguishing system spewing water all over the club. In total, it is estimated that the fitness club sustained $200,000 worth of damage.
  
  Most commercial and residential insurance policies contain insurance coverage for acts of vandalism. Vandalism is often defined as "the willful and malicious damage to, or destruction of, the described property." Interestingly, most policies exclude the breakage of glass, but cover damage to property other than glass which occurs when burglars enter or exit a building. Furthermore, specific acts of vandalism may be excluded under some policies such as damage caused by changes in temperature resulting from opernings caused by vandalism or damage caused by an arson fire. Prior to settling its claim, LA Fitness would be well advised to retain a policyholder's attorney to review their coverage. - 7 - 10

• Meterologists Predict Active 2010 Hurricane Season
  Mar 22, 2010

  It is getting to be that time of year again - the hurricane season. In honor of the occassion, the Insurance Journal is reporting that meterologist, Joe Bastardi, of AccuWeather.com Hurricane Center is predicting a 2010 hurricane season with seven landfalls - two or three to be major landfalls in the U.S. In addition, Bastardi forecasts 16 to 18 tropical storms in total, 15 of which will be likely in the western Atlantic or Gulf of Mexico. According to Bastardi, the rapidly weakening El Nino, warmer ocean temperatures, weaking trade winds and higher humidity levels will all contribute to greater storm activity.

  - 8 - 10

• TWIA Stands By Work Product Privilege In Hurricane Ike Litigation
  Jan 11, 2010

  An interesting article appeared in the Southeast Texas Record on January 7, 2010. In Hurricane Ike litigation, TWIA has raised the work product privilege as an excuse to refuse to produce documents containing communications between its representatives in relation to probable Hurricane Ike litigation.

  Conversely, the attorney for the League City plaintiff asserts that TWIA can not raise the work product privilege to cover documents containing communications between TWIA's representatives prior to the time TWIA anticipated litigation in the case.

  In this case, TWIA asserts that it anticipated litigation prior to Hurricane Ike making landfall because of its experience handling prior Texas hurricanes.

  The work product privilege is a privilege that exists to protect communications between a party and its representatives and only applies to materials prepared, mental impressions developed, and communications made in anticipation of litigation or for trial. The primary purpose for the work product privilege is to protect the mental processes, conclusions and legal theories of the attorney and provide a privileged area so the attorney can analyze and prepare the case for trial.

  Texas Rule of Civil Procedure 192.5(a) states that to qualify as work product, materials must have been prepared or mental impressions developed in anticipation of litigation or trial - that is, after the occurrence or transaction on which the suit is based.

  In most first insurance party claim cases, the date of occurrence can not arise prior to the carrier's denial of coverage. Thus, I anticipate that the court will rule that all documents containing communications between TWIA's representatives in relation to probable Hurricane Ike litigation, but that occurred prior to the denial of insurance coverage will be ruled discoverable.

  - 9 - 10

• Texas consumer advocate wants ban on health insurers' blanket clauses
  Dec 17, 2009

  Texas consumer advocate wants ban on health insurers' blanket clauses

  
  By TERRENCE STUTZ / The Dallas Morning News
  
  AUSTIN - The state's insurance consumer advocate is seeking to eliminate the blanket authority of health and disability insurers to decide what their policies cover, a shift that could have a major impact on health insurance in Texas.

  Public Insurance Counsel Deeia Beck has asked the state's insurance commissioner to end long-standing provisions in most health plans, called "discretionary" clauses, that give insurers the right to interpret their policies and decide what benefits must be paid.

  "Consumers are now at the mercy of health insurers," Beck said.

  The health insurance industry strongly opposes such a change. Insurance Commissioner Mike Geeslin has held a hearing on the proposal and is considering whether to move forward.

  Twenty-two states have banned the practice, either through state law or new regulations. The National Association of Insurance Commissioners has recommended to its members that the practice be stopped.

  "It's hard to defend giving insurance companies this kind of authority, where they have full discretion to interpret ambiguities in their policies," Beck said Wednesday. "No one disputes that an insurance carrier has the first right to make a determination on their claims. But there is a problem in how those decisions are reviewed and whether companies should be allowed to resolve all ambiguities in their favor."

  Beck said disagreements typically arise over cancer drugs, mental illness coverage and home-based diabetes treatment. But insurers have the final say, and costs often figure into their decisions.

  "Typically, they hire their own in-house physicians or they contract with physicians - who are paid by the insurance carrier - to review the medical records and make a judgment on whether a claim should be paid. It is an inherently unfair process," she said.

  Consumers unhappy with their insurer's decision can go to court. But to overturn a decision, the consumer must prove the insurer acted unreasonably, a legal standard that strongly favors the insurer in most cases.

  That requirement stacks the deck in favor of insurance companies and allows them to reject claims without worry, Beck said.

  Eliminating discretionary clauses will remove that advantage and force insurers to be even-handed in deciding whether to pay medical and disability claims, she added.

  A spokeswoman for the health insurance industry took issue with Beck's arguments, contending that dropping the clauses from policies would be a serious mistake that would harm consumers.

  "It would lead to more litigation, higher costs for insurance and not be in the best interests of consumers," said Jennifer Ahrens Cawley, executive director of the Texas Association of Life and Health Insurers, which has urged Geeslin to reject the proposal.

  "More lawsuits will increase the cost of health plans," she added. "And it is medium and small-sized employers who will bear the brunt of those higher costs in their plans and who may be forced to offer reduced benefits or no benefits at all."

  Cawley said insurers already fall under government regulations, fiduciary rules and court precedents that require consumer protections.

  "The obligation is already there for the insurer to make these benefit determinations in a uniform, nonarbitrary fashion," she said.

  She dismissed the decisions of other states to ban discretionary clauses, saying, "Texas has always demonstrated a strong sense of consumer protection" in its insurance laws, such as requiring prompt payment of claims by insurance companies.

  There are no independent studies on what has happened to insurance rates in those states, but an industry-funded study estimated that removal of discretionary authority for insurers will ultimately cause a 3 percent to 4 percent spike in premiums.

  Ben Gonzalez, a spokesman for the Department of Insurance, said the commissioner has a Dec. 28 deadline to decide whether the agency will start writing rules to limit or ban discretionary clauses. If Geeslin opts not to begin rule-making, insurers will retain their unrestricted right to determine benefits.

  Consumer advocates see Geeslin, an appointee of Republican Gov. Rick Perry, as leaning toward the industry in his decisions. Health care and insurance, including car and homeowners, are expected to be major topics in next year's state campaigns.

  Some states have addressed the discretion issue by requiring independent, third-party reviews of benefits disputes. Although Geeslin could take similar action in Texas, he is not expected to do so even if he strips insurers of their blanket authority to decide what claims are covered.

  Several legislators, including Sen. Rodney Ellis, D-Houston, and Rep. Mark Shelton, R-Fort Worth, are backing Beck's recommendation, according to officials in Beck's office.

  Beck's office produced examples of the provisions that are included in health insurance policies sold in Texas. One states: "The company has sole authority to manage this policy, to administer claims, to interpret policy provisions and to resolve questions arising under this policy. Any decision the company make in the exercise of its authority shall be conclusive and binding."

  Another reads: "Benefits under this plan will be paid only if the plan administrator or its designee decides in its discretion that the applicant is entitled to them."

  Beck has received strong support from leading consumer groups, including AARP and Texas Watch.

  "Many of our members are worried about their insurance coverage being there when they need it," said Tim Morstad of AARP.

  "In the last decade or so there has been a dramatic increase in the number of cases where individuals have been denied claims under these provisions," he said.

  Morstad said it can be frustrating for consumers who have a hard time finding out exactly why they were turned down by their insurer. And their chances for success in a lawsuit are slim because of the favorable legal position that insurers hold.

  Earlier this month, a federal appeals court upheld a Montana law barring insurers from using discretionary clauses in their insurance policies. The law had been challenged by leading insurance companies.

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