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69 Cards in this Set
- Front
- Back
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Types of Claims
1-5 1 |
1. Misrepresentation
2. Failing to acknowledge communication of claims 3. Failing to adopt standards for investigation 4. Failing to affirm/deny coverage after proof of loss submission 5. No GF in settlement |
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Types of Claims
6-10 2 |
6. Compelling insureds to institute litigation
7. Settle for less than written material 8. Attempt to settle claims on an application that has been altered w/out notice 9. Failing to inform of coverage upon which payment was made 10. Making known of appeal of arbitration to compel settlement |
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Types of Claims
11-15 3 |
11. Delaying claim by requiring insured to complete duplicate reports
12. Failure to settle promptly under 1 portion 13. Failure to give reasonable explanation for denial of claim 14. Advising no attorney 15. Misleading claimant on SOL |
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Types of Claims
16-19 4 |
16. Excess liability
17. Bad faith 18. Business interruption 19. Breach of implied covenant of GF and fair dealing |
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Causes of Actions
1-4 5 |
1. Negligence
2. Gross Negligence 3. Breach of Express Contract 4. Breach of Implied Contract |
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Causes of Actions
4-8 6 |
5. Intentional Torts
6. Statutory Violation 7. DTPA 8. Bad Faith |
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Cause of Action
Negligence - Elements 7 |
1. Duty: duty to defend, duty to indemnify, duty to settle
2. Breach of Duty 3. Causation (cause in fact & proximate cause) 4. Damages: probable, foreseeable and consequent of the negligent action |
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Cause of Action
Gross Negligence - Elements 8 |
1. Duty: view the extreme degree of risk OBJECTIVELY at time of occurrence considering probability/magnitude AND whether the actor had actual, SUBJECTIVELY awareness of the risk, but went ahead and proceed w/conscious indifference
2. Breach of duty 3. Causation (cause in fact & proximate cause) 4. Damages: probable, foreseeable and consequent of the negligent action - 3x exemplary damages but TX requires expert testimony |
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Cause of Action
Negligence vs. Gross Negligence 9 |
Difference in duty. Higher breach of duty in gross negligence.
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Cause of Action
Breach of Express Contract - Establish 10 |
1. "Contract" Application + Policy - a life insurance policy must prove that the policy or the policy and the application constitute entire K btwn parties
2. Oral - terms must be definite enough to provide evidence of K 3. Written |
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Cause of Action
Breach of Express Contract - Elements 11 |
1. Proof of Valid K
2. Material Breach of K - breach that goes to the very essence of the bargain 3. Causation (cause in fact & proximate cause) 4. Damages - probable, foreseeable and consequent of the breach |
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Cause of Action
Breach of Express Contract - What Makes Up a K 12 |
1. Offer
2. Sufficient Consideration 3. Acceptance 4. Mutual Consent 5. Execution of K 6. Delivery of K 7. Intent Mutuality |
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Cause of Action
Breach of Implied Contract - Fact 13 |
1. Implied K in fact exists - actions between parties imply there is a K
2. Implied K is materially breached 3. Breach was cause of the injuries (cause in fact & proximate cause) 4. Damages - probable, foreseeable and a consequent to the breach |
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Cause of Action
Breach of Implied Contract - Law 14 |
1. Implied K exists in law - a law exists which insurer is impliedly bound to when dealing w/insured
2. Implied K is materially breached 3. Breach was cause of the injuries (cause in fact & proximate cause) 4. Damages - that are probable, foreseeable and consequent to the breach |
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Cause of Action
Intentional Torts - Elements 15 |
1. The act causing anguish was done intentionally
2. The act was unreasonable 3. The actor should have recognized it as likely to result in emotional distress 4. Actions caused damages (cause in fact & proximate cause) 5. Proof of damages - probable, foreseeable and a consequnet of the intentional action |
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Cause of Action
Statutory Violations - Elements 16 |
1. There is a statute (541.060, 542.003, 542.004)
2. It is violated by the insurance company 3. Causation (cause in fact & proximate cause) 4. Proof of damages - probable, foreseeable and a consequent to violation) |
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Cause of Action
Statutory Violations - Unfair Practices Act 17 |
541.060 - Unfair Settlement Practices
(a) It is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to engage in the following unfair settlement practices with respect to a claim by an insured or beneficiary: (4) Failing within a reasonable time to: (A) Affirm or deny coverage of a claim to a policyholder; or (B) Submit a reservation of rights to a policyholder |
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Cause of Action
Statutory Violations - Unfair Settlement Act 18 |
542.003 - Unfair Claim Settlement Practices Prohibited
(a) An insurer engaging in business in this state may not engage in an unfair claim settlement practice. (b) Any of the following acts by an insurer constitutes unfair claim settlement practices: (1) Knowing misrepresenting to a claimant pertient facts or policy provisions relaint to coverage at issue: (2) Failing to acknowledge w/reasonable promptness pertinent communications relating to a claim arising under the insurer's policy; (3) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under the insurer's policies; (4) Not attempting in good faith to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear (5) Compelling a policyholder to institute a suit to recover an amount due under a policy by offering substantially less than the amt ultimately recovered in a suit brought by the policyholder; (6) Failing to maintain the information required by section 542.005; the complaints rule (7) Committing another act the commissioner determines by rule constitutes an unfair claim settlement practice. |
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Cause of Action
DTPA - Elements 19 |
1. There is a consumer
2. Consumer engaged in trade practices 3. There are deceptive trade practices act committed (541.060, 542.003, 542.004) 4. Deceptive trade acts produced or caused damages that are probable, foreseeable and a consequent of the act. |
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Cause of Action
Bad Faith - Elements 20 |
1. The insurer had no reasonable basis for making a bad faith action on the claim;
2. The insurer knew or should have known that fact; 3. Causation (cause in fact and proximate cause) 4. Damages are probable, foreseeable and a consequent to the act. |
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Insurer's Affirmative Defenses
1-5 21 |
1. Breach of Condition
2. Breach of Warranty 3. Comparative Negligence 4. SOL 5. No Insurable Interest |
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Insurer's Affirmative Defenses
6-10 22 |
6. No Assignment
7. No Coverage 8. Misrepresentation 9. Nondisclosure in Application 10. No Temporary Coverage |
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Insurer's Affirmative Defenses
11-15 23 |
11. No Delivery Policy
12. No Pecuniary "Loss" 13. No Objective "Bad Faith" 14. No Direct Action 15. No Third-Party Action |
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Insurer's Affirmative Defenses
16-18 24 |
16. No Private Cause of Action
17. Failure to State a Cognizable Claim 18. Breach of a Condition Precedent |
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Insurer's Affirmative Defenses
Breach of Condition - Elements 25 |
1. Existence of a condition - notice of suit clause, notice of loss clause,
2. Condition was breached by insured 3. Insured's breach directly or proximately caused the damages |
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Insurer's Affirmative Defenses
Breach of Warranty - Elements 26 |
1. Existence of Warranty - Mere representations are not warranties that would be capable of making coverage void or voidable; prove that there is a negotiated or bargained promise/warranty
2. Warranty was breached by insured by action or inaction 3. Insured's breach is responsible directly or proximately for injuries |
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Insurer's Affirmative Defenses
Types of Warranties 27 |
Affirmative Warranty - asserts the existence of a fact at the time the policy is entered into and appears on its face or is attached
Promissory Warranty - An absolute undertaking by the insured, contained in the policy or in a paper properly incorporated by reference, that certain facts or conclusions pertaining ot the risk shall continue, be done, or omitted Continuing Warranty - no liability shall lie after duration of policy after X number of days |
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Insurer's Affirmative Defenses
Warranties - Texas 28 |
1101.007 Statements of Insured
A life insurance policy must provide that, in the absence of fraud, a statement made by an insured is considered a representation and not a warranty. |
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Insurer's Affirmative Defenses
Comparative Negligence - Elements 29 |
1. Plf negligent toward own safety (see negligence COA)
2. Plf's action is a substantial factor in her own harm Texas - 50% or below plf' can still recover - Modified Recovery Rule |
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Insurer's Affirmative Defenses
Statute of Limitations - Elements 30 |
1. The time which the claim occasioned
2. That the pleading/complaint now is beyond the statutory period 3. The pleading/complaint is barred by the statute of limitations SOL: 2 yrs - prof negligence 2 yrs - personal injury 4 yrs - fraud 1 yr - libel/slander/defamation 2 yrs - injury to personal property 2 yrs - products laibility 4 yrs - contract |
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Insurer's Affirmative Defenses
No Insurable Interest - 5 Types 31 |
1. Legal title
2. Equitable title 3. Qualified property 4. Mere possession or right 5. Suffer destruction - loss of legal right |
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Insurer's Affirmative Defenses
No Insurable Interest - 5 Willy Types 32 |
1. Options agreement
2. Title 3. Factual expectancy 4. Pecuniary interests 5. Personal relationships |
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Insurer's Affirmative Defenses
No Insurable Interest - Business Interruptions Insurance 33 |
Lost profits and expectation profits can be evaluated and so you can buy business interruption insurance.
Some courts hold that there must be total suspension of operations in business. Some courts hold that they can still be in business and win business interruption. This is a very ambiguous term "business interruption" and the rule is that the courts do a case-by-case basis. |
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Insurer's Affirmative Defenses
No Insurable Interest - Constructive Trust 34 |
A create of equity which prevent unjust enrichment and in Texas can serves as an insurable interest.
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Insurer's Affirmative Defenses
No Insurable Interest - Destroyed Property 35 |
A contract for property that is demolished or destroyed does not negate the fact that one has an insurable interest in the property and the property has value as a matter of law.
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Insurer's Affirmative Defenses
No Insurable Interest - Stolen Property 36 |
General rule that owners of stolen property may not recover on his insurance policy.
Good Faith purchaser's rule have been concluded by some courts to have no insurable interests in stolen property and other cases hold that good faith purchasers have an insurable interest in stolen property. |
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Insurer's Affirmative Defenses
No Insurable Interest - Option 37 |
If the options was exercised and adopted before the peril, there is an insurable interest.
If the option was not exercised before the peril, no insurable interest. |
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Insurer's Affirmative Defenses
No Assignment 38 |
If no proper assignment to a third party bringing the claim, the insurance company can escape liability.
No full release and therefore liability still exists. |
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Insurer's Affirmative Defenses
No Coverage - Conditional Receipt 39 |
1. Agent: promise & receipt by GENERAL agent = no coverage
A. 4001.051(), 4001.052(b) - soliciting agents have no power to modify or bind and these can be used by insurance companies as affirmative defense B. Soliciting agent = power to given conditional receipt 2. Receipts language - inclusion of time period ot begin coverage 3. General agents in TX cannot represent an application as being a contract or binding insurance and agents cannot tell the consumer that the insurance company will deliver the policy on a certain date. |
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Insurer's Affirmative Defenses
No Coverage - Policy 40 |
The insurance company could say there is no coverage b/c you purchased only a specified risk policy and the causes of the loss was a cause outside of the insurance policy.
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Insurer's Affirmative Defenses
Misrepresentation - Proof 41 |
705.003 Policy Provisions: Misrep in Proof of Loss or Death.
1. Misrep fraudulently made 2. Misrep a fact material to the question of the insurer's liability under the policy, and 3. Misled the insurer and caused the insurer to waive or lose a valid defense to the policy. |
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Insurer's Affirmative Defenses
Misrepresentation - Application for Policy 42 |
705.004, 705.051 Misrep in Policy Application
1. Misrep was material to the risk; or 2. Misrep contributed to the contingency or event on which the policy became due and payable These are questions of fact. |
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Insurer's Affirmative Defenses
Misrepresentation - Elements 43 |
1. Def' made a mater representation that was false.
2. Def' knew the representation was false. 3. Def' made the representation recklessly as a positive assertion w/out any knowledge of its truth. 4. Def' intended to induce plf' to act upon the representation. 5. Plf' actually and justifiably relied on the representation. 6. Plf suffered injury 7. Cause in fact 8. Proximate Cuase 9. Damages |
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Insurer's Affirmative Defenses
Nondisclosure in Application - Elements 44 |
1. There was nondisclosed fact
2. Must prove the nondisclosure was material 3. The nondisclosure caused the damages or los of coverage (either in bringing about the peril that caused the loss (proximate cause); or that either of these two was material in causing the loss (direct cause)) |
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Insurer's Affirmative Defenses
No Temporary Coverage 45 |
Notice given to insured that while application is processed there is no temporary coverage
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Insurer's Affirmative Defenses
No Delivery of Policy 46 |
If policy was not actually delivered. Insurer can rebut insured's claim b/c it was never actually rec'd by insured.
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Insurer's Affirmative Defenses
No Pecuniary "Loss" 47 |
No actual or substantial loss is had by insured and therefore damages are unwarranted. Perhaps the insurer is at liability for a nominal fee? This keeps the burden of proving damages on insured to expound the damages with evidence
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Insurer's Affirmative Defenses
No Objective "Bad Faith" 48 |
Effective defense where insured's pleading/complaint alleges claims or causes of action for which bad faith is not an element or possibility
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Insurer's Affirmative Defenses
No Direct Action 49 |
No direct action is permitted by a 3rd party complaintant and the insurer, but a direct action is permitted between the insurer and 1st party insured
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Insurer's Affirmative Defenses
No Third Party Action 50 |
1. Insurance contract does not permit a third party action.
2. Third party action is based on liability activity not covered or excluded from liability contract. 3. Incorrect assignment issues. 4. Insurance carries have no duty towards 3rd party victims |
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Insurer's Affirmative Defenses
No Private Causes of Actions 51 |
Humphreys v. Forth Worth Lloyds -
Trial crt terminated action by a take-nothing summary judgment rendered on the ground that no private cause of action can be asserted for wrongful insurance claim settlement acts and practices. REVERSED by Crt Appeals - summary judgments may not be settled on failure to state a COA. |
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Insurer's Affirmative Defenses
Failure to State Cognizable Claims 52 |
Failure of pleadings to state claims can lead to
1. Motion to Dismiss 2. MSJ |
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Insurer's Affirmative Defenses
Breach of Condition Precedent 53 |
1. Medical Exam
2. Pay Insurance Premium 3. Complete Application 4. No Misrep./No conceal 5. Insurer must first determine insurability |
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Insured's Retorts
No Material Misrepresentation - Elements 54 |
1. There are no misrep facts
2. If any misrep facts, they were not material 3. Insurance company waived by instating policy 1101.007 - Statement of Insured - A life insurance policy must provide that, in the absence of fraud, a statement made by an insured is considered a representation and not a warranty. |
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Insured's Retorts
No Material Nondisclosure - Elements 55 |
1. There are not nondisclosed facts
2. If any nondisclosed facts, they are not material 3. Insurance company waived argument by instating policy |
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Insured's Retorts
Waiver - Elements 56 |
1. An express or implied waiver of a right
2. The waiver of the rt is voluntary 3. The waiver of the rt is intentional 4. The right has been relinquished 5. The rt is known and existing Focuses on conduct of insurer. Detrimental reliance is not required - Insurer may have waived their rights to certain defenses by accepting premiums under knowledge of certain facts. |
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Insured's Retorts
Estoppel - Elements 57 |
1. Insurance carrier makes representations or by his conduct
2. Misleads the insured 3. The insured is mislead to his/her detriment 4. The misleading or deceiving need not be intentional 5. The insured needs to reasonably rely to their detriment 6. This must occur in the forbearing suit |
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Insured's Retorts
Assignment - Elements 58 |
1. Assignments are contracts. The consideration is relinquihment of a legal right by the third party to sue the insurance company and the insured's consideration is giving away of their legal rights under the insurance contract.
Example - Assign me your rights mr. insured and I, mr. third party, will not sue you. |
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Insured's Retorts
Assignment - Full Release 59 |
When there has been a full release (Trinity v. Bleeker - must be full relase):
1. Consideration must be paid in full before the execution and delivery of the release 2. Full and true consideration must be made to other parties; and 3. Must be a party to the release |
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Insured's Retorts
Subrogation 60 |
Provision in property and liability (but no life) insurance policies whereby the insurance company acquires certain rights upon paying a claim of loss under the policy.
This section allows the insurer to take legal action against a third party responsible for losses to insured's property. In other words, if the claim has been paid, the insurer can sue the party responsible for teh damages for that money. The objective of this clause is to prevent the insured party from profiting from an insurance policy. |
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Insurer's Affirmative Defenses
Breach 61 |
Breach of condition, condition precedent, condition subsequent.
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Insurer's Affirmative Defenses
Agent employee of insurer 62 |
Insurance companies cannt argue that the agent was an employee of the insured.
4001.052 - Solicitor of Application for Insurance Considered Agent of Insurer 1. A person who solicits an application for life accident, or health insurance or property or casualty insurance is considered the agent of the insurer issuing a policy on the application and not the agent of the insured in any controversy between the insurer and the insured. 2. The agent may not alter or waive a term or condition of the application or policy. General Agent - cannot represent an application or contract to bind, modify or promise a certain policy coverage delivery date . Insurance companies are not liable for agent's intentional conduct (unless insurer implores the agent). |
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Actions
Injunctive Relief - Elements 63 |
1. COA against def'
2. A rt to relief sought 3. A wrongful act 4. Causing irreparable harm (cause in fact & proximate cause) 5. Imminent danger will continue 6. Inadequacy of economic remedy at law Granted by Crt sitting in equity. |
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Actions
Declaratory Relief - Elements 64 |
1. There is a justiciable controversy.
2. It exists between parties with adverse interest 3. Those seeking relief have a legal interest in the controversy; and 4. The issues involved are rip for decision UDJA In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of any appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration. |
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Actions
Declaratory Relief - 5 Theories of Interpretation 65 |
1. Plain Meaning
2. Traditional Rules of Contract (first two - insurer to win) 3. Reasonable Expectation 4. Adhesion 5. Ambiguity (last three - insured to win) |
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Actions
Recission - Elements 66 |
1. A representation made regarding the insurance contract
2. Falsity of that representation 3. Materiality of that representation 4. Intent to induce the other to act or refrain from acting 5. Justifiable relieance 6. Insurer must refund all the premiums paid under the policies at that time of the recission 705.104 - can rescind insurance k 705.005 - Notice to Insured of Misrep The rescinding party must give notice no more than 91 days after they discover the misrep that coverage under the policy is hereby revoked. |
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Actions
Reimbursement - Elements 67 |
Policies may disclaim an obligation to defend but provide for the advancement of defense costs subject to reimbursement, if not duty to defend is found.
1. Insured is paying insurer back 2. Typically not written in policy, rather it is a unilateral action by insurer to get costs back Reservation of rights letters given to insured's under tentative duty to defend are sometimes accompanied by reimbursement clauses if defense duty is found to be not an obligation. |
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Actions
Cancellation - Elements 68 |
1. Fraud, misrep
2. Cancellation clauses for certain actions taken by insured 3. Texas has adopted the minority position that intent to deceive is required for cancellation of an insurance policy on the ground of a misrep 4. Most policies will automatically cancel for failure to pay insurance premiums 5. Requires notice of cancellation of insurance coverage and k |
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Actions
Reservation of Rights Letter 69 |
Texas statute & common law require insured must be sent a reservation of rights notification before they go to court.
If not = bad faith against insurer Tort, DTPA and contract clauses of action for no letter |
