What duty does your insurance company have to defend you when you have an accident?.

The Fifth Circuit made a recent ruling with regard to the duty to defend in Guideone Specialty Mut. Ins. Co. v. Missionary Church of Disciples of Jesus Christ, 2012 U.S. App. LEXIS 14611 (5th Cir. Tex. July 17, 2012). The common automobile policy that you purchase usually includes what is referred to as a duty to defend.  Simply put, your insurance company will pay for your legal defense, should you get sued for causing an accident. Home Owners Mgmt. v. Mid-Continent Cas. Co., No. 3:04CV2061 (N.D.Tex.2005).

In the Guideone case, members of the Missionary Church of Disciples of Jesus Christ headed to San Antonio, Texas from Dallas so that one of them could see a relative.  Once they arrived in San Antonio, they noticed that one of their prayer centers was unsightly.  The members spent the next day cleaning up the prayer center.   At lunch time, three of the members ventured to a local restaurant.  To get to the restaurant, they used a van owned by the head of Texas’s branch of the Church.  The church member driving the van did not have a driver’s license.  The church members would end up running a red light and striking the Plaintiff’s vehicle. 

The Plaintiff allegedly sustained significant injuries, including, but not limited to, a closed head injury, concussion, and factures to her ribs, spine, left clavicle, coccyx, and lung contusions. Plaintiff sued, not only driver, but also the church. Plaintiff claimed that the church was negligent with regard to its ownership, control and operation of the van, and that the Church had negligently entrusted the van to Meyer.  [On a side note, in Texas, permitting someone who does not have a driver’s license, to use your car, will be viewed as negligent entrustment. Arias v. Aguilar, 515 S.W.2d 313, 318 (Tex.App.—Corpus Christi 1974, no writ).]

The Church’s insurance policy set forth that it covered cars owned by the church and cars that the Church did not own, but that were used for Church business.  Further, the policy covered volunteers, such as the driver, who operated said vehicles.

The insurance company argued that it had no duty to defend or indemnify the Church (indemnification is basically the term for when the insurance company pays for the damages its insured caused).  The duty to defend is broader than the duty to indemnify. 

The court looked to the petition (lawsuit) filed against the Church and the insurance policy to determine whether the insurance company did have to defend the Church.  The lawsuit alleged that the members of the church, including the driver, went to San Antonio “to make the Church’s house habitable;” that the driver was acting “with the express/implied permission of the Church,” and the driver was “an employee of the Church.” The Plaintiff’s allegations made it look like the van was being used for Church business.  It was these allegations, whether or not they were true, as made by the Plaintiff, which triggered the insurance company’s duty to defend as defined in the insurance policy.

In short, whether or not the insurance company has a duty to defend you will depend on what your policy says and what allegations are made against you in the Plaintiff’s petition. Based on my experience working as a trial attorney inside of an insurance company, I can tell you that in most cases, your personal automobile insurance policy will provide you with a defense. However, I still recommend that you know what your policy says.  Read it on your own, with your agent, or contact an attorney if necessary. 

If you have any questions, please feel free to submit a comment, or contact me at a.defreitas@lawyer.com.

Does your insurance cover every type of accident?.

Simply because you have insurance, does not mean that the insurance company will pay.  An insurance company may deny your claim and set forth that the policy does not provide coverage.

On July 19, 2012, the U.S. Fifth Circuit Court brought forth a ruling upholding Hartford Life and Accidental Insurance Company’s denial of widow’s claim on her deceased husband’s accidental-death insurance policy. See Likens v. Hartford Life & Accident Ins. Co., 2012 U.S. App. LEXIS 14839 (5th Cir. Tex. July 19, 2012) Hartford denied the widow’s claim under the policy’s alcohol exclusion, arguing that the deceased husband’s death was caused by his own legal intoxication. 

The deceased husband had been driven home by a bartender after a night out.  The deceased decided to smoke a cigarette prior to entering the house. When the widow went to check on him again, the deceased was found at the foot of his front porch, without any signs of a pulse.  The hospital indicated that the deceased had suffered a heart attack and fractured vertebrae in his spine.  Life support was withdrawn several days later.  The treating physician determined that death was caused by an “anoxic brain injury secondary to cardiopulmonary arrest.”  However, the Houston Medical Examiner’s office determined that the deceased died of complications following a fracture in his spine and alcoholism. The conclusion was that the deceased died because of injuries he sustained during a fall.

The Fifth Circuit ruled that even though intoxication was not the only cause of death, it did not have to be, to trigger the exclusion as written in the accidental-death insurance agreement that was purchased from the Hartford.  As such, the widow was unable to obtain any payments from the accidental-death insurance policy, even though the couple had paid for the policy.

This case is but another sad reminder, that you need to know what your insurance policy actually says.  Either read your insurance policies on your own, with your insurance agent, or contact an attorney who can tell you what your policies cover.

If you have any questions, please feel free to add in a comment or contact me at a.defreitas@lawyer.com.

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