Articles Posted in Hurricane Litigation

After Hurricane Ike, residents of Galveston and Bolivar Islands discovered they did not have the insurance their agent had told them they purchased. To recover, a claim must be brought against the agent.

Defense – Coverage Not Obtainable

Sometimes, the defendant in an action against an insurance agent or broker for failure to procure insurance coverage will attempt to avoid liability by showing that the client’s failure to obtain the desired coverage was not caused by any wrongdoing on the defendant’s part because the desired coverage was not obtainable from any source. Where such a claim is made, the defendant generally will bear the burden of proving it as an affirmative defense. Stevens v Wafer. The burden of proof is said to be placed on the defendant because an insurance agent or broker is in a better position than the client or the intended beneficiary to determine the availability of insurance coverage.
Continue Reading

After Hurricane Ike, residents of Galveston and Bolivar Islands discovered they did not have the insurance their agent had told them they purchased. To recover, a claim must be brought against the agent.

Defense – Contributory Negligence; Failure to Examine Policy
The Texas Supreme Court in Colonial Savings Association v. Taylor addressed the law on this point. Colonial involved a suit brought by an insured against a party that was deemed to have essentially assumed the role of an agent for the insured. The court stated that while some jurisdictions have held that an insured has a legal duty to read his policy, the prevailing view–joined by this State–is as follows: “[A]n insured who accepts a policy without dissent, is presumed to know its contents, but the presumption may be overcome by proof that ‘he did not know its contents when it was accepted, as by showing that when he received it he put it away without examination, or that he relied upon the knowledge of the insurer and supposed he had correctly drawn it.’
Continue Reading

After Hurricane Ike, residents of Galeveston and Bolivar Islands discovered they did not have the insurance their agent had told them they purchased. To recover, a claim must be brought against the agent.

Causation – Negligence

In an action against an insurance agent or broker for failure to procure insurance coverage brought under a negligence theory the plaintiff must show that the defendant’s negligence was the cause of a loss which the plaintiff sustained as a consequence of being without suitable coverage. The means of establishing causation may vary according to the nature of the plaintiff’s breach and other circumstances of each case. In many cases, it will be necessary to show that the desired coverage was available and thus would have been obtained if the defendant had been exercising reasonable skill, care, and diligence to procure it.
Otherwise stated, an insurance agent’s or broker’s failure to obtain the coverage expected by the client may not be the cause of a loss sustained due to lack of coverage if the coverage in question would not have been issued by any insurer under any relevant circumstances. Establishing causation may also require proof that the person who requested coverage had an insurable interest in the subject matter of the desired insurance. Proof that the plaintiff sustained a loss, or that some other event occurred, so that, under the terms of the policy which the defendant was to have procured, the plaintiff would have been entitled to benefits if the policy had been in effect may also be necessary.
Continue Reading

After Hurricane Ike, residents of Galveston and Bolivar Island discovered they did not have the insurance their agent had told them they purchased. To recover, a claim must be brought against the agent.

Failure to Procure Coverage as Requested by Client
In an action against an insurance agent or broker for failure to procure insurance coverage, the plaintiff will be able to establish the defendant’s breach of duty if it can be shown that the defendant failed to procure coverage as requested by the client. Failure to procure coverage may involve a failure to obtain any policy whatsoever, obtaining a policy which does not cover a particular risk for which the client desired coverage, or obtaining a policy which did not provide a sufficient amount of coverage to fully compensate the client in the event of loss.
Generally, an insurance agent or broker will be able to discharge his or her duties to a client by procuring coverage as requested or, alternatively, by advising the client within a reasonable time that the requested coverage has not been procured. This means that the defendant may not be liable where he or she makes reasonable efforts to procure coverage as requested and fails to do so, unless the plaintiff can also show that the defendant failed to advise the client that coverage had not been procured, or failed to adequately explain the limitations or exceptions contained in any policy which was obtained.
Continue Reading

On April 13-16, 2010, Tom W. Thornhill participated with the other lead members of the slab committee for the multi-district litigation and class action suits against Texas Windstorm Insurance Association (“TWIA”) to depose TWIA experts on causation issues. The defense of TWIA is that the damages to the homes on Galveston and Bolivar Islands are not covered. TWIA statistically calculated damages in the amount of 11.2% of the losses without looking at the homes based on faulty science which when explored in deposition showed fingerprints of mismanagement that will expose TWIA to punitive damages for bad faith conduct. The law in Texas allows recovery under the provisions of Section 541 & 542 in the Insurance Code and the Deceptive Trade Practices Act. TWIA insurance policy holders are encouraged to take notice of the statutory time period in which to file suit. Texas allows only two years within which to file suit. Thornhill Law Firm has formed a joint venture in Texas to handle these suits named, Thornhill, Shrader & Burdette, PLLC, and can be reached at 1-800-989-2707.

A reality of living on the Gulf Coast is the yearly threat of hurricane season. While many bypass us, the threat of a direct hit requires property owners to plan for the future, whose plans typically involves insurance policies. Insurance companies hold an important role in society, they are the ones we turn to when disaster strikes, as they represent themselves in large-scale advertising campaigns. Their job is to assess the chance of any given peril occurring, and determining a value a policyholder should pay for the right to receive a benefit should the covered event occur. Some perils carry such high rates of risk, private insurers are unwilling to write policies regarding that event. With some exceptions, flood and certain water-related events are typically not covered under an all perils insurance policy, or flood is excluded under an all risks policy.
Continue Reading

Rule 403 of the Federal Rules of Evidence states that “although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.” Fed.R.Evid. 403 (Emphasis added). The application of this rule has been hotly contested in current insurance litigation, with specific regard to the admissibility of videos documenting Hurricane Katrina conditions in a different geographic location from where the property damage at issue in the case occurred.
Continue Reading