Texas Insurance Law Newsbrief - April 15, 2025
A CREDIT DING IS NOT STANDING
In Siantou v. Nzure Ins. Servz., Inc., (2025 U.S. Dist. LEXIS 68763 (S.D. Tex. April 9, 2025) Mr. Siantou purchased a Safeco homeowner’s insurance policy with NSure as his insurance agent, in January of 2022. However, a couple months later, a service provider change resulted in Mr. Siantou’s payments not being sent to Safeco.
Safeco never sent Mr. Siantou any notice of his delinquency, and after several months of nonpayment, Safeco cancelled his policy. Subsequently, Mr. Siantou’s homeowner’s insurance escrow account was sent to collections, which affected his credit. He filed a lawsuit against NSure for promissory estoppel, breach of fiduciary duty, violation of the Texas Deceptive Trade Practices Act, and negligence. NSure moved to dismiss his lawsuit for failing to state a claim for which relief could be granted.
NSure primarily argued that Mr. Siantou did not suffer actual monetary damage, and damage to his credit was not recognizable harm, or not one directly resulting from the alleged failure to place a policy. The Western District of Texas federal court said that Mr. Siantou did suffer an injury in fact in the form of a ding to his credit, but overall, his credit rating was impacted by so many factors outside of NSure’s control that he did not sufficiently have standing to bring the lawsuit. However, the Court allowed Mr. Siantou the opportunity to re-plead his lawsuit to attempt to correct this issue.
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INSURERS MAY ACCEPT RESPONSIBILITY FOR AGENTS UNDER SECTION 542A DESPITE SOME ALLEGED CAUSES OF CLAIM OUTSIDE OF SECTION 542A
Despite a couple’s claims that their damages resulted from causes that were outside of the Texas Insurance Code’s causes for which an insurer may accept an agent’s responsibility, this week a Texas federal court allowed a lawsuit to proceeed after a dismissal of the agent under the Act.
In Herrara v. Amguard Ins. Co. (2025 U.S. Dist. LEXIS 68567 (N.D. Tex. April 10 , 2025), Oscar and Jessica Herrera alleged their property was damaged by an electrical surge. And that AmGuard did not fully or timely pay their claim, so they filed suit in state court in Texas against AmGuard and its filed adjuster, Jeremy Roberts, who was non-diverse to the Herreras. AmGuard accepted full responsibility for Roberts’ actions pursuance to Section 541A of the Texas Insurance Code, then removed the case to federal court, alleging that Roberts was improperly joined.
The Herraras argued that Section 542A only applies to claims made for damages caused by forces of nature, by plain language of the statute, whereas theirs was caused by an electrical surge. However, the court noted that there were multiple sources in the record that attributed the damage to hail and wind. The Herreras also argued that Roberts needed to move for dismissal himself and not AmGuard, but the Court held that it was obligated to review its subject matter jurisdiction over the case on its own, regardless of which parties or any parties requested such review. The Court accordingly retained federal jurisdiction over the matter.
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