Texas Drivers With Underinsured Motorists Cases Win Key Appeal

Auto Insurance PolicyMisrepresentation Claim Can Proceed Simultaneously with Underinsured Motorists Claim

On Friday the Houston Court of Appeals (1st District) gave the plaintiff’s bar a major victory by ruling that an uninsured motorist claim is not severable from the accompanying misrepresentation claim.

The decision allows a court to hear these claims in one case, rather than forcing the plaintiff to first try the uninsured motorist claim before the extra-contractual misrepresentation claim is heard by a jury. Although the decision applies in limited circumstances, it diverges from Texas appellate courts’ tendency to greatly favor insurance companies over Texas injury victims over the past 20 years in this age of “tort reform.”

Family Seeks Compensation in Fatal Car Crash

The plaintiffs In re Allstate County Mutual Insurance Company are Raymond and Stacy Briers. The Briers’ son Grant was tragically killed in an accident involving a single car owned and driven by his friend. The Briers filed a claim with Allstate under the underinsured motorist policy (UIM) issued to Mr. Briers’ employer. Allstate alleged that Mr. Brier and Grant were not considered “insureds” according to the policy’s language and so were not covered.

A UIM policy is intended to cover an insured in the event she or he is injured by a negligent driver with no or insufficient insurance coverage. The insured pays premiums each month for this extra coverage. Clearly, Mr. Briers did not make these payments to Allstate but believed that they were covered by the terms of the insurance policy.

The Briers filed a lawsuit against Allstate for breach of the UIM contract. In addition, the Briers claimed that Allstate acted in bad faith, engaged in unfair settlement practices and failed to properly investigate, evaluate and pay the claim in violation of the Texas Insurance Code.
The lawsuit also asserted that, if the Briers do not meet the definition of insured, Allstate and the insurance agent violated the Deceptive Trade Practices Act (DTPA) by misrepresenting the family members were covered under the UIM policy.

Insurance Company Employs Standard Defense Tactic

Allstate responded to the Briers’ lawsuit by moving the court to sever the extra-contractual claims. This would mean that the Briers would have to resolve the UIM case before the extra-contractual issues could move forward. The trial court disagreed with Allstate and the company appealed.

Courts have routinely sided with insurance companies on this issue. In this case, the appellate court ordered the trial court to sever and abate the bad faith, unfair settlement practices and delayed payment claims. 

The Texas Supreme Court may hear an appeal of this decision however, and it has been extremely favorable to insurance companies in the last 20 years.

However, the appellate court allowed the decision regarding the misrepresentation claim to stand, meaning the Briers do not have to bring the UIM claim before proceeding with the misrepresentation claim. 

Has Your Insurance Company Wrongly Denied Your Claim?

You pay premiums to your insurance company and you rightly expect it to abide by the terms of your contract. If your insurance company has denied your claim or is delaying settlement, Board Certified personal injury lawyer Bill Berenson can help you get the compensation you are entitled to receive. Call our Fort Worth office at 817-885-8000 or toll-free at 1-888-801-8585 or email us here to schedule your free case evaluation.

Related posts:

Uninsured and Underinsured Motorists Benefits: How Do They Work?

If Other Driver Has No Insurance, What Can I Do?


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