Tuesday, December 13, 2016

Motion to Sever and Abate Bad Faith Claims Against Carrier from Agent Malpractice Claims

Originally published by Patrick McGinnis.

I recently defeated a motion to sever and abate breach of contract from extra-contractual claims filed by a carrier. I thought it would be good to blog a refresher on this issue. My client (“Insured”) owns a home in Houston. Insured was a long-time customer of a local agent and the carrier he was licensed to sell for. Insured had a separate auto and homeowner’s policy such that premiums were paid separately. Both premiums were automatically drafted from insured’s bank card monthly. In December 2015, the card was stolen. Insured replaced her card, but forgot to inform agent and carrier. In January 2016, insured starting getting calls from agent and notices from carrier. Insured went to agent’s office and gave agent new card information. Unknown to insured, the agent attached the new card information to the automobile policy premium, but failed to do so for the homeowner’s policy. Therefore, when the insured saw notices from the carrier about her…

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