Breaking News: Amy Stewart Explains Big Texas Insurance Ruling

By Amy Stewart Law

In April 2017, the Supreme Court of Texas issued one of the biggest insurance rulings in years, and our own Amy Elizabeth Stewart sat down for an extensive interview with the national legal publication Law360 to help explain the court’s decision. 

In USAA Texas Lloyd’s v. Menchaca, the Texas high court cleared up years of legal confusion by ruling that policyholders can recover benefits as actual damages if such benefits were lost due to an insurer’s violation of the Texas Insurance Code. The Supreme Court also established five rules that lower courts must observe when deciding cases over policy breaches and Insurance Code violations.

“It sets the record straight on the scope of recovery under the Insurance Code, and it puts an end to the notion that the Insurance Code was narrowly intended to only address a situation where the insured has some injury that’s different from being deprived of its rights under the policy,” Ms. Stewart told Law360.

Under the ruling, policyholders have a new and powerful tool since some courts had previously found that insurers couldn’t be held liable for lost benefits unless they had breached the policy terms, regardless of whether they had violated the Insurance Code. Now, insurers that violate the Insurance Code could face three times as much in damages in some cases.

For additional information, you can read Ms. Stewart’s entire interview in “Texas Ruling Could Mean Bigger Paydays for Policyholders” on the Law360 website (subscription required).