If you just experienced a catastrophic property loss, the last thing you want to worry about is the amount of coverage your policy provides. If your house is completely wiped by something covered under your policy, you expect to receive the limits of your policy. You expect that the policy limit will be enough to repair and replace all that you lost. But what if the limits aren’t enough? What then? In Bryce v. Unitrin Preferred Insurance Company,1 the Texas Court of Appeals out of Austin, Texas, dealt with this issue.
In Bryce, a fire destroyed the insureds’ home in Georgetown, Texas. When the fire occurred, the Bryces’ home was insured by Unitrin Preferred Insurance Company under a “replacement cost” policy, intended to cover the cost, up to policy limits, of reconstructing the home after a loss. Because of the fire, Unitrin paid the Bryces their full policy limits of $474,000 for the dwelling and $284,400 for the contents of the home. The actual replacement cost, however, of both the dwelling and the personal property far exceeded the policy limits.
The insured sued Unitrin and their insurance agent alleging causes of action for negligence and violations of the insurance code, and seeking damages in the amounts necessary to fully rebuild the home and replace their personal property. The insureds’ experts estimated that the replacement cost of the home was approximately $1.7 million and that the replacement cost of their personal property was approximately $864,000. The Bryces claimed their home was grossly underinsured because Unitrin and EEB negligently set inadequate policy limits and failed to disclose to the Bryces their insurance coverage would not cover the full replacement cost of the home and its contents.
At the trial level, the jury returned a verdict that the Bryces’ negligence alone proximately caused their home to be underinsured. The jury further found that neither Unitrin nor EEB committed unfair or deceptive acts in violation of the insurance code. The trial court entered judgment that the Bryces take nothing on their claims. The Bryces appealed.
On appeal, the appeals court affirmed the trial court’s judgment noting the jury’s determination that the Bryces’ negligence alone proximately caused their home to be underinsured was supported by factually sufficient evidence. The appellate court also found the jury’s determination that neither Unitrin nor EEB made any misrepresentations as to the replacement cost of the Bryces’ home in violation of the insurance code was supported by factually sufficient evidence.
This case serves as a reminder that at the end of the day you, the property owner, are ultimately responsible for ensuring your property is adequately covered by your insurance policy. Sure, there may be occasions when an agent or insurance company uses underhanded tactics that hurt you, but as shown in Bryce, if the evidence does not convince a jury that wrongdoing occurred, you’ll be left holding the bag. I encourage all of your to review your policy and property to make sure that you’re fully protected!
