Introduction: The Texas Department of Insurance (“TDI”) has adopted rules amending the Consumer Bill of Rights for personal automobile and homeowners’ insurance.1 See 28 TAC §5.9971(b). Insurers must begin providing the new Bill of Rights to insureds by November 15, 2021. The Bill of Rights is a summary of a policyholder’s rights and is not a part of a policyholder’s policy. Additionally, Texas Senate Bill 1376 has been enacted to exempt 18 kinds of commercial insurance policies from rate and form filing requirements. This new legislation applies on or after September 1, 2021, to policies delivered, issued for delivery, or renewed. In addition, Texas Senate Bill 965 amends rate filing requirements for residential property and personal automobile insurers with low market shares and applies on or after to January 1, 2022, to delivered, issued or renewed policies.
Continue Reading Texas Amended Consumer/Homeowners Bill of Rights and Other Recent Legislation

The Policy: Plaintiffs, Frymire Home Services, Inc. and Whitfield Capital LLC (collectively “Plaintiffs”), purchased a commercial policy for their office building in Dallas, Texas from Defendant Ohio Security Insurance Company (“OSIC”). The policy explicitly covered “windstorm and hail” losses but excluded “cosmetic” damage to the roof as well as the standard insurer defense for non-payment—“wear and tear.”
Continue Reading “Wear and Tear” or “Wind and Hail” or Both: Fifth Circuit Certifies Questions to Texas Supreme Court Regarding the Doctrine of Concurrent Causation

INTRODUCTION: Appraisal provisions have been a feature of insurance policies in Texas for well over a century.1 Indeed, in the Texas Supreme Court’s 2009 opinion of State Farm Lloyds v. Johnson, the court noted that it has only addressed insurance appraisal provisions a total of five times between 1888 and 2002.2 Since Johnson, insurance appraisal law has grown substantially and now has claimed a front-row seat in Texas property insurance coverage litigation. The Randel case, discussed below, is the most recent appraisal opinion.
Continue Reading Texas Appraisal Law Update

Recently, the Houston Merlin team has encountered several cases that turn on notice to policyholders, or rather, the lack thereof, when an insurer makes “material changes” to a policy renewal. A hypothetical example of this situation might be if a policyholder has a homeowners’ policy that did not exclude cosmetic damage to the policyholder’s roof and the next year, the renewal policy, unbeknownst to the policyholder, contains a cosmetic damage exclusion. Thinking the “renewal” policy was the same as the prior policy, except for coverage dates, the policyholder accepts it and pays his premium. Along comes the typical Texas hail/windstorm, and the policyholder’s metal roof suffers hundreds of unsightly dings. Policyholder files a claim with his insurance company only to find out that his current renewal policy has a new endorsement excluding what the insurance industry labels as “cosmetic” damage to his roof. His insurer denies the claim based on the “new” cosmetic damage exclusion in his renewal policy. Policyholder contacts Merlin Law Group for help. Given these facts, the information below regarding Texas law and renewal policies may be helpful to this hypothetical policyholder, and now Merlin client, and his case.
Continue Reading Upon Renewal of a Policy, Insurers Must Give Policyholders Advance Notice of “Material Changes”

The case found closest to the fact pattern above is Ironwood Building II. Ltd. v. Axis Surplus Insurance Company.1 Read further to find out who prevails in the end—the insured or the insurer.
Continue Reading In Texas, Who Prevails When There Is: 1 Damaged Property Caused By 2 Weather Events, And 2 Damage Claims Filed Under 2 Different Policies From 2 Different Carriers?

It’s that season again. Here come the hurricanes, here come the strong winds and rains. Will your house and beautiful trees survive the onslaught? It is a question that we who live along the Gulf Coast ask ourselves at the beginning of every hurricane season. And along with that question, comes the next one—if a tree falls will my homeowners insurance policy cover it? Like many legal questions, the answer is “it depends.”
Continue Reading Will Your Homeowner’s Insurance Cover That Fallen Tree?

With the pandemic, many have been forced to work from home to minimize exposure and slow the spread of the virus. Home offices have now become work headquarters and laptops or desk computers, printers, web cams, keyboards, headsets, iPads, and tablets are now essential tools to use when you show up to work every day—even if work is located at the kitchen table in slippers and PJs.

With the abrupt switch to home-based work, probably not much time, if any, has been given to the following thoughts:
Continue Reading If Your Home Office Is Now Your Work Headquarters, Will Your Homeowners Insurance Policy Cover You?

Commissioner’s Bulletins issued by the Texas Department of Insurance (“TDI”) do not have the force of law of a statute, but they do express and declare TDI’s interpretation or position on certain issues and existing laws. These bulletins also contain recommendations and help insurers and consumers understand how the business of insurance should be conducted in Texas. A review of the most recent Commissioner’s Bulletin B-0010-21 issued on March 9, 2021, provides a good example of a bulletin’s purpose.
Continue Reading Texas Department of Insurance Commissioner’s Bulletins Re: Severe Winter Weather Claims

Courts across the country have split on the key COVID-19 coverage question of whether a policyholder’s inability to fully operate its business caused by COVID-19 restrictions would satisfy the policy’s business interruption coverage requirement that the “loss” had to be a result from a “suspension of operations” caused by “direct physical loss of or damage to covered property.”
Continue Reading Multi-District Litigation Policyholders Win a Business Interruption Coverage Battle Over “Direct Physical Loss”

The answer to the first question in the title is “yes”—insureds have a duty to read their insurance policy.1 The use of the term “duty” implies a legal responsibility imposed by law but from where does this duty derive? It’s certainly not in any insurance policy I have ever read. The closest answer to that question may be that in Texas, the duty for an insured to read the insurance policy has developed as a presumption.
Continue Reading In Texas, Do Insureds Have A Duty To Read Their Policy And, If So, Is That Duty Absolute?