A person who accidentally injures another, or damages his/her property, could be sued for hundreds of thousands of dollars, maybe millions of dollars. Having an “umbrella” insurance policy could keep them from losing their homes, investments,  life’s savings and future income.

The term umbrella is used because it covers liability claims from all policies underneath it, such as auto and homeowner policies.

The question is: Do you need an umbrella?

Recent stories in the New York Times show how an umbrella policy would work. Say you crash into a Mercedes with a highly paid executive at the wheel. He is injured so badly, he cannot return to work. A jury awards him millions of dollars, and you have to pay it. The court takes your savings, your home (exempt in Texas), all other assets, and requires you to pay part of your salary for decades.

People who have an umbrella policy would be covered for the damages. It  protects their net worth over and above what other insurance does. And it pays legal costs for defending yourself against a law suit.

For people who have any sort of assets, like a home with a large amount of equity, umbrella insurance can be a key part of financial protection. But not many people carry it.

State Farm, the biggest home insurer in the country, says only about 12 percent of its policy holders buy umbrella coverage.

State Farm charges about $160 a year for a million dollars in coverage.

Insurance: Do you need an ‘umbrella’? is a post from: Accident & Injury Law in Texas

Allstate Corp. has filed a federal lawsuit against Countrywide Financial Corp. over $700 million in toxic mortgage-backed securities that the insurer bought beginning in 2005, only to see their value decline rapidly. The suit, filed last Monday in Manhattan federal court, targets Countrywide, its co-founder and longtime CEO Angelo Mozilo and other executives, as well as Bank of America Corp., which bought the mortgage giant in 2008.

Allstate maintains that beginning in 2003, Countrywide abandoned its, underwriting standards and misrepresented key information about the underlying mortgage loans that made up the securities it sold. The company, then the nation’s largest home loan originator, presented securities backed by the mortgages as safe investments to Allstate and others by Concealing relevant facts, the suit alleges.

Bank of America said it is still reviewing the complaint, “but this unfortunately appears to be a situation where a sophisticated investor is looking for someone to blame for a downturn in the economy and losses on an investment it made.”

Guess now we know why Allstate’s settlement offers are so bad – they don’t have any money.

Insurer Allstate files suit over Countrywide mortgage assets is a post from: Accident & Injury Law in Texas

The minimum amount of automobile coverage Texans must buy is going up January 1st.  The current law says that a driver must have a minimum of $25,000 for each injured person, $50,000 per accident, and $25,000 for property damage per accident (commonly referred to as a 25/50/25 coverage).  The new limits will be $30,000 for each injured person, $60,000 per accident, and $25,000 for property damage per accident.  Obviously, this is still not enough and you should always carry high uninsured/under-insured coverage.

Coverage must increase because liability limits no longer pay for all expenses after an accident, according to the Texas Department of Insurance.

State insurance regulators said the increased coverage shouldn’t amount to significantly larger insurance bills. Fifty percent of the vehicles in Texas (about 7.5 million) carry only minimum liability insurance while twenty percent carry no insurance at all. Minimum premiums should go up 2 to 3 percent.

Mandatory auto liability coverage to rise in new year is a post from: Accident & Injury Law in Texas

I’ve uploaded my first YouTube video and would appreciate your comments.

“The Ant & the Grasshopper – A Texas Tale” is Aesop’s Tale told with a Texas Twist.  Watch this short (3 minute) video and you may just discover something about Texas law you weren’t aware of.  The authors of this video feel a duty, as lawyers, to make the public aware of recent changes in the law that effect the citizens of Texas.

The Ant & the Grasshopper – a Texas Tale

Ant and Grasshopper Video is a post from: Accident & Injury Law in Texas

The Texas attorney general on Thursday ordered insurer the Travelers Cos. Inc. to stop running a television advertisement that he called deceptive.
In a news release announcing a cease and desist order, Attorney General Greg Abbott said that the Travelers ad improperly tells Texas homeowners that they should buy additional automobile insurance to prevent losing their homes.

“Texans are protected by robust homestead laws that insulate homeowners from the losses depicted in Travelers’ advertisements,” Abbott said in the release.

If Travelers continues to air the ad, the company will face legal action by the state, Abbott said.

Abbott’s action comes two days after Texas Watch, a consumer advocacy group, asked Abbott and Texas Insurance Commissioner Mike Geeslin to take action against the company.

State attorney general orders Travelers to stop airing TV ad is a post from: Accident & Injury Law in Texas

A television commercial advertising insurer the Travelers Cos. Inc. is deceptive and should be stopped, a Texas consumer advocacy group said Tuesday.

Texas Watch Executive Director Alex Winslow has written to both Texas Attorney General Greg Abbott and Texas Insurance Commissioner Mike Geeslin, seeking a cease and-desist order to keep the ad off the air in Texas.

In the advertisement, titled “Driving Your House,” a man is seen driving through the desert in what appears to be a wall-less house on wheels. The man gets into an accident, which spreads the house’s contents across the desert roadside.

As the homeowner-driver flies through the air — along with furniture and a cat — a voiceover says: “Without the right auto insurance, a crash might impact more than your car. Make sure you’re properly covered, so when you’re driving your car, you’re not risking your house.”

The ad concludes with the tagline: “Travelers. Take the scary out of life.”

Winslow said the message implies that if homeowners don’t carry adequate automobile insurance, then they could lose their homes. But the Texas Constitution has homestead protections that prevent the forced sale of a home in most circumstances, Winslow said.

“What’s particularly troubling about this ad is that it is preying on the fears that many people have about losing their home in our current economic crisis,” Winslow said. “Insurance companies shouldn’t be allowed to deceive their customers into buying more overpriced insurance.”

The state insurance department and attorney general each have the authority to demand that a company stop running an ad.

In 2005, Abbott issued a cease and desist order to the Allstate Corp. after the company ran an ad that featured a family that lost its home and savings because it didn’t carry enough automobile insurance. In a letter, Abbott’s office told Allstate that the ad violated the state’s Deceptive Trade Practices-Consumer Protection Act and the state’s insurance code.

Allstate pulled the ad, so no lawsuit was necessary, Kelley said.

Source: Austin American-Statesman

Traveler’s TV message runs afoul of state law, consumer group says is a post from: Accident & Injury Law in Texas

I recently wrote about how, if your at fault in an accident, your more likely to be sued depending on which insurance company you are covered with.

Earlier this week the Dallas Morning News ran a story about the worst insurance companies in Texas from a complaint standpoint.

The companies with the most justified complaints against them (i.e. ten worst companies) were:

1. Loya Insurance, 3.76 times as many complaints as the typical insurance company
2. Old American County Mutual, 3.42 times as many complaints
3. Nationwide Mutual, 1.91 times as many
4. Southern County Mutual, 1.9 times
5. Home State County Mutual, 1.67 times
6. Colonial County Mutual, 1.55 times
7. ACCC Insurance, 1.38 times
8. Allstate County Mutual, 1.37 times
9. Allstate Fire and Casualty, 1.34 times
10. Consumers County Mutual, 1.26 times

Complaints from Texas drivers included such practices as delays in processing claims, unsatisfactory offers or settlements, denial of claims and liability disputes.

Click here for information on filing a complaint against an insurance company.

Why insurance companies get a bad rap is a post from: Accident & Injury Law in Texas

Ask any personal injury trial attorney in Austin (not necessarily those guys who advertise on T.V. but don’t actually file suit or try cases) and you’ll find that an overwhelming number of lawsuits are filed against two particular insurance companies.

When you buy auto insurance, you’re supposed to be buying peace of mind.  But, there’s a built-in problem—your goal is to have the insurance company settle and pay any accident claim in which you were at fault, but the insurance company’s goal is to take in as much money as possible while paying out as little as possible.  When someone is making a claim against your policy, you fall on the “pay out as little as possible” side of the business.

So what happens is the insurance company tries to negotiate a quick, low settlement with the claimant.  If the person making the claim is representing themselves or if they hire an attorney who is known to settle quickly and not fight for top dollar (believe it or not, I have had one of the TV lawyers tell me that one insurance company told him they didn’t believe his threats of filing a lawsuit because he had never filed one before—and that was after handling hundreds, if not thousands, of claims).

But if the person making the claim against you is smart enough to hire an experienced accident injury lawyer, you may be on the receiving end of a lawsuit if you don’t have the right insurance company.

What is the right insurance company? The right one is one who will settle the claim for a fair value without forcing you into litigation.  The wrong company will force you to be served with a suit (possibly at work), then they will chose an attorney for you (though your policy will almost always allow you to chose an attorney), the attorney and them will convince you that they are doing the right thing and to let them handle everything (though the judgment, if it goes to trial) will be on your record, force you to take a day off of work for you deposition to be taken, and force you to take several days off of work to go to a trial you know you will lose.

My own personal survey of several of my peers and some mediators as well as reviews of the cases that I have filed suit on shows that if you have Allstate or Farmers insurance, you’re at a greater risk of being sued than with other insurance companies because they are the stingiest insurers.

I see ratings from time to time saying this insurance company or that is the best, but I’ve never seen ones for the worst.  Maybe I should start a survey to ask people who were at fault for an accident what insurance company they have and whether they were sued or it settled before suit was filed?

Are You Buying Insurance or a Lawsuit? is a post from: Accident & Injury Law in Texas

The Texas Department of Insurance officially proposed a rule Tuesday that would ban the use of certain policy clauses that make it easier for insurance companies to deny benefits to some policyholders.

The move is the first step in a potential ban on so-called discretionary clauses — which often exist in disability, life, accident and health policies.

Discretionary clauses give insurance companies the sole authority to interpret the terms of their policies. In other words, the clauses effectively give companies the authority to decide who gets paid and who doesn’t.

In a filing to propose the rule change, the Insurance Department said: “Discretionary clauses are unjust, encourage misrepresentation, and are de- ceptive because they mislead consumers regarding terms of the coverage.”

Deeia Beck, who represents consumers in insurance issues for the state, asked Insurance Commissioner Mike Geeslin to ban the clauses in October.

And in March, Geeslin made an informal posting of the pro posed rule change to gauge public sentiment. Now, he has taken the next step by formally proposing the change.

The deadline for written comments to the department is June 28, and there will be a public hearing on July 12.

“This is the next step in getting a permanent rule in place,” Beck said. “This is an excellent development to help rid the state of these unfair clauses.”

The insurance industry objected to the proposed change in March.
Jared Wolfe, head of the Texas Association of Health Plans, said the push for a ban is driven by plaintiffs’ lawyers – and shoddy evidence.

Almost two dozen other states have taken steps to reel in discretionary clauses.

State seeks ban on insurance clauses is a post from: Accident & Injury Law in Texas

Discretionary clauses, which are the subject of a recent public debate between insurers and consumer advocates, give insurance companies the authority to interpret the terms of their policies. They also provide the legal  cover to win most lawsuits in which policyholders sue over unpaid claims.

In other words, the clauses effectively give companies the authority to decide who gets paid and who doesn’t.

Insurers say the clauses are necessary to keep premiums low and to help them fight off frivolous lawsuits.

But Deeia Beck, the state’s public insurance counsel, has asked Insurance Commissioner Mike Geeslin to ban the clauses. Geeslin has solicited preliminary comments from the public and the insurance industry and will decide whether to formally recommend a rule change, which would trigger a formal public comment period before a decision is made.

“The use of these types of , clauses is inherently unfair. to consumers,” Beck said. “These clauses allow insurers to make patently unfair decisions, and consumers will have very little judicial recourse to have those decisions overturned.”

Beck has chosen to follow the lead of almost two dozen other states that have taken steps to reel in discretionary clauses, which are most comonly found in long-term disability policies, though Beck said some health care policies contain them, too. She said the new federal health care law would have no effect on discretionary clauses.

Not surprisingly, the insurance industry is fighting back.

Jared Wolfe, head of the Texas Association of Health Plans, said the push for a ban is driven by plaintiffs’ lawyers and shoddy evidence.

The insurance industry also has questioned the commissioner’s authority to ban the clauses.

Beck has responded to the industry’s claims of spiking premiums by pointing to a 2005 industry study, by Milliman Inc., a consulting and actuarial firm.

The study said that the prohibition of discretionary clauses would lead to a cost increase of 3 to 4 percent in disability policies, and that may be on the high side.

Beck added that the insurance industry has had several years to show that banning the clauses in other states has led to high premiums and increased litigation, but they haven’t produced any evidence to demonstrate their claims.

If Beck and other advocates manage to persuade Geeslin to make a policy change, it could take awhile before policies in Texas cease to contain discretionary clauses.

If other states’ experiences are any indication, the fight will end up in court.

Michigan and Montana, which have banned the clauses, were sued by insurance companies. Both states, however, eventually won appeals after lengthy court fights.

Even if a ban were to lead to a lawsuit, Beck said, pursuing it is still the right thing to do for the countless number of people negatively affected by discretionary clauses.

You can also read our Questions and Answers about discretionary clauses.

Texas considering ban on insurance policies’ discretionary clauses is a post from: Accident & Injury Law in Texas