Hunton Insurance Recovery Blog

Law360 sought the perspective of Walter Andrews, head of Hunton & Williams LLP’s insurance coverage practice, when collecting its list of cases to watch in 2017. Andrews identified a case pending with the Texas Supreme Court – USAA Texas Lloyds Co. v. Menchaca, which we reported on in October.  As Andrews explained to Law360, “If the Texas Supreme Court comes down in the policyholder’s favor here, it would provide a substantial weapon for policyholders’ arsenals, as far as what they have to [use against] insurers that don’t reasonably investigate claims. That would create a real incentive for insurance companies to timely and reasonably investigate claims.”

As a reminder about the case, Gail Menchaca filed a claim with her homeowners insurer USAA for damage sustained in Hurricane Ike. USAA determined that the claim was covered, but did not exceed her deductible and, thus, refused to make payment under the policy. Ms. Menchaca, whose loss estimates exceeded the deductible, sued for breach of contract and violation of the Texas Insurance Code. The jury found that USAA had not breached the policy, but, nevertheless, was liable for failure to conduct a reasonable investigation of her claim – a decision affirmed by the Texas Court of Appeals. The case was argued to the Texas Supreme Court in October, and awaits a decision.

Subscribe to our blog for updates on the status of this and other cases.