Court Opinion

ID: 9775353
Source: CourtListenerOpinion
Date Created: 2023-08-29 18:55:01.064986+00
Date Added: 2024-06-11T07:32:25.332154
License: Public Domain

STONE, Justice,
dissenting.
I respectfully dissent. While the majority opinion correctly states that the statutory provisions governing uninsured/underinsured motorist coverage and the case law liberally construing these statutes, the opinion does not adhere to the basic premise underlying all insurance matters—insurance policies are simply contracts, and are to be construed *360accordingly to fundamental rules of contract construction. In the instant case, application of fundamental rules of contract construction lead to the conclusion that appellants do have uninsured/underinsured motorists coverage (UM/UIM).
At the time that appellants applied for insurance, State Farm used a separate form for applicants to select or reject UM/UIM coverage. The form provided information regarding such coverage, and incorporated the written rejection into the policy with language that the insured acknowledged that the “coverage selection or rejection shall be applicable to the policy insurance for which I am applying....” However, appellants were never given this form to sign. Rather, each appellant was given a TAIP application, and it is this “rejection” of UM/UIM coverage found in the TAIP application that State Farm relies upon in claiming appellants rejected coverage.
State Farm’s reliance on the TAIP application as a rejection of UM/UIM coverage is misplaced for the simple reason that the TAIP application was never made part of the insurance policies issued to appellants. The application states in large bold type: “THIS APPLICATION DOES NOT CONSTITUTE A BINDER OF INSURANCE.” Likewise, the insurance policies do not incorporate the TAIP application. The policy specifically consists of “the Declarations page, any endorsements listed therein, and the policy booklet specified under the Policy Form Number shown.” A written rejection is not contained in any of these items. Thus, State Farm erroneously relies upon a document that is not part of the insurance policy to determine the contractual rights of the parties.
The provisions of an insurance contract define the rights of the insured and the insurer. State Farm Fire & Casualty Co. v. Griffin, 888 S.W.2d 150, 156 (Tex.App.-Houston [1st Dist.] 1994, no writ). In determining the intent of the parties to a contract the court is guided by the four corners of the contract, absent any allegations of ambiguity. National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). Unless the application is incorporated into the policy, it is not part of the policy and is not used in determining the rights of the parties under the policy. Fredonia State Bank v. General American Life Ins. Co., 881 S.W.2d 279, 287-88 (Tex. 1994). Thus, statements made in the application cannot be used by the insurer to avoid coverage unless the application has been incorporated into the policy. Id. at 288.
As recognized by the majority, the Insurance Code requires that every Texas automobile liability insurance policy contain UM/ UIM coverage unless the insured “shall reject the coverage in writing.” Tex. Ins. Code Ann. arts. 5.06-1(1), 5.06-3(a)(Vernon 1981); Stracener v. USAA, 777 S.W.2d 378, 381 (Tex. 1989). Applying the general rules of contract construction, there is no written rejection of coverage within the issued policy. Therefore, I would hold that UM/UIM coverage is provided pursuant to Tex. Ins. Code Ann. arts. 5.06-1(1), 5.06-3(a)(Vernon 1981).