Insurance/UM/UIM

★ [UM/UIM] Must Texas auto policies include UM/UIM coverage?

Yes, unless a named insured rejects UM/UIM coverage in writing.

★ [UM/UIM] What does UIM coverage protect against?

Damages legally recoverable from an at-fault driver whose liability coverage is insufficient.

[UM/UIM] When is a vehicle “underinsured” under Texas law?

Its collectible liability limits are less than the insured’s UIM limit after applicable claim payments.

[UM/UIM] Can an insolvent liability insurer make a vehicle “uninsured”?

Yes. Texas law treats certain insured vehicles as uninsured when the liability insurer cannot pay due to insolvency.

[UM/UIM] Unknown hit-and-run driver: what special requirement applies?

Actual physical contact must occur between the unknown vehicle and the insured/person or property.

[UM/UIM] Who bears the burden in a dispute over whether a vehicle was uninsured?

The UM/UIM insurer.

★ [UM/UIM] What does “legally entitled to recover” require?

Proof of the other motorist’s liability and the damages the insured is legally entitled to recover.

★ [UM/UIM] Basic Texas UIM payment formula?

Recoverable damages minus amounts recovered or recoverable from the at-fault driver’s insurer, capped by UIM limits.

[UM/UIM] Can UIM recovery exceed the policy’s UIM limit?

No. The policy limit remains the maximum UIM payment.

[UM/UIM] Where may a Texas UM/UIM coverage action generally be brought?

County of the insured’s residence at the accident or county where the accident occurred.

[UM/UIM] What subrogation right does the UM/UIM carrier receive after payment?

To the extent paid, it is entitled to settlement/judgment proceeds from legally responsible persons.

★ [UM/UIM] Does settling without the carrier’s consent automatically forfeit UM/UIM coverage?

No. A consent-to-settlement breach defeats coverage only if the insurer is actually prejudiced.

★ [BRAINARD] When does a Texas UIM carrier’s contractual duty to pay arise?

After a judgment establishes the tortfeasor’s liability, damages, and underinsured status.

★ [BRAINARD] Does demanding UIM benefits itself trigger a contractual duty to pay?

No. Neither a demand nor filing suit alone creates the duty; the required judgment does.

★ [BRAINARD] Must the insured sue the tortfeasor to establish UIM entitlement?

No. The insured may settle with the tortfeasor and establish the tort predicates in a direct action against the carrier.

★ [BRAINARD] Before the predicate judgment, is the UIM action a matured breach-of-contract claim?

No. It is on the insurance contract, but no breach exists until the payment obligation is triggered.

★ [IRWIN] What procedural vehicle may establish UIM entitlement before breach?

A declaratory-judgment action may establish the insured’s rights and the UIM coverage predicates.

★ [IRWIN] Are attorney’s fees potentially available in the UIM declaratory action?

Yes. Under the UDJA, reasonable and necessary fees may be awarded when equitable and just.

[IRWIN] Are Chapter 38 contract fees available before a UIM breach has matured?

No. Brainard bars Chapter 38 fees before a just amount is owed and breach has matured.

★ [UM/UIM] What issues may the UIM carrier contest in the initial “car-crash” trial?

The other driver’s liability, causation, the insured’s damages, and UIM status/offset issues.

★ [UM/UIM] Effect of settlement with the tortfeasor on UIM recovery?

The carrier receives the statutory offset for amounts recovered or recoverable from the tortfeasor’s insurer.

[UM/UIM] If damages do not exceed the recoverable liability coverage, are UIM benefits owed?

No. UIM fills the uncompensated gap; there is no UIM amount if the liability coverage covers the damages.

★ [2025 STATE FARM] What normally happens first in a UIM suit with extracontractual claims?

An initial car-crash/coverage proceeding determines tort liability, damages, and entitlement to UIM benefits.

★ [2025 STATE FARM] What happens to UIM extracontractual claims while entitlement is being determined?

They ordinarily must be abated while the predicate UIM/UDJA claims are pending.

[2025 STATE FARM] Is extracontractual discovery proper before UIM entitlement is established?

Generally no. Discovery aimed at the abated extracontractual claims should be deferred.

[2025 STATE FARM] When may a UIM carrier quash its corporate-representative deposition?

When it lacks personal knowledge, produces relevant nonprivileged materials, and supports proportionality objections with evidence.

[UM/UIM] Must extracontractual claims always wait until all appeals of the UIM judgment end?

No. A trial-court judgment can permit the extracontractual phase to proceed despite a pending appeal.

★ [STOWERS] What is the core purpose of the Stowers doctrine?

To protect an insured from an excess judgment caused by the liability insurer’s negligent failure to accept a reasonable settlement.

★ [STOWERS] Is Stowers a first-party or third-party doctrine?

Third-party. It concerns a liability insurer’s handling of a claim against its insured.

★ [STOWERS] What are the three Stowers prerequisites?

Covered claim + demand within policy limits + terms an ordinarily prudent insurer would accept given excess-judgment risk.

★ [STOWERS] What must a Stowers demand generally offer regarding the insured?

A full release of the insured in exchange for the demanded payment.

[STOWERS] Must a Stowers demand state an exact dollar figure?

A stated sum is typical, but a demand for the policy limits may satisfy the amount requirement.

★ [STOWERS] Does an above-limits demand trigger Stowers?

No. A demand above the applicable policy limits does not trigger the Stowers duty.

★ [STOWERS] What standard governs the insurer’s response to a valid Stowers demand?

Ordinary prudence: how an ordinarily prudent insurer would act considering likelihood and degree of excess exposure.

[STOWERS] Must the insurer receive a reasonable opportunity to evaluate the demand?

Yes. The demand must allow a reasonable time under the circumstances for evaluation and response.

★ [STOWERS] Is there a general Stowers duty to initiate settlement without a demand?

No. Stowers liability ordinarily requires a qualifying settlement demand.

[STOWERS] Can Stowers arise when the third-party claim is outside policy coverage?

No. Coverage of the third-party claim is a threshold prerequisite.

★ [STOWERS] What exposure makes a Stowers demand significant?

The likelihood and degree of the insured’s potential exposure to an excess judgment.

★ [STOWERS] Remedy for negligent rejection of a proper demand causing excess judgment?

The insurer may be liable for the entire judgment, including the amount exceeding policy limits.

[STOWERS] Who owns the Stowers cause of action?

The insured; Stowers repairs harm to the insured from the insurer’s mishandling of the defense/settlement.

[STOWERS] May an insured assign a Stowers claim?

Yes, an insured may assign the claim, commonly after an excess judgment or settlement arrangement.

[STOWERS] Can an insurer reasonably settle one claimant and exhaust limits despite other claims?

Potentially yes. A reasonable settlement with one claimant does not itself create Stowers liability to others.

★ [BAD FAITH] Texas common-law bad-faith liability standard?

Insurer denied/delayed payment when it knew or should have known coverage/liability was reasonably clear.

★ [INS. CODE] Key §541.060 settlement-duty rule?

Insurer must attempt a prompt, fair, equitable settlement when its liability has become reasonably clear.

[INS. CODE] What explanation must an insurer provide after denying or compromising a claim?

A prompt reasonable explanation based on the policy, facts, and applicable law.

[INS. CODE] What investigation-related conduct is prohibited?

Refusing to pay a claim without conducting a reasonable investigation.

★ [MENCHACA] General rule if the insured has no right to policy benefits?

The insured ordinarily cannot recover those policy benefits as damages for an Insurance Code violation.

★ [MENCHACA] When may policy benefits be recovered as Insurance Code actual damages?

When the insured has a right to benefits and a statutory violation causes the loss of those benefits.

[MENCHACA] What is the “benefits-lost” rule?

Benefits may be recoverable if the insurer’s statutory violation itself caused the insured to lose a contractual right to them.

★ [MENCHACA] What is the independent-injury rule?

A truly independent injury caused by a statutory violation may support damages even without entitlement to policy benefits.

★ [MENCHACA] What is the no-recovery rule?

No policy right + no independent injury = no damages for the statutory violation.

[INS. CODE] What damages may Chapter 541 allow for a knowing violation?

Actual damages; if knowingly committed, the factfinder may award up to three times actual damages, plus statutory fee remedies.

[INS. CODE] Chapter 541 presuit notice deadline?

Written notice generally must be given at least 61 days before suit.

[INS. CODE] What must Chapter 541 presuit notice state?

The specific complaint and the amount of actual damages and expenses, including reasonably incurred attorney’s fees.