In Century Surety Co. v. EC & SM Guerra, LLC, 5:23-CV-01215-XR-RBF, 2025 WL 2602288 (W.D. Tex. Aug. 21, 2025) aff’2025 WL 2598375 (Sept. 5, 2025), the US District Court docket for the Western District of Texas reaffirmed the Justice of the Peace’s report and advice holding that as a result of the insured obtained a coverage with its requested limits, Century didn’t breach the insurance coverage contract. The Court docket additional held that Century had no obligation to advise the insured of the adequacy of the protection for the insured property.
Factual Background
The insured operates a baby growth heart in San Antonio, Texas, and procured a renewal coverage with the insurer, protecting its property with a constructing restrict of $635,220, plus further protection for enterprise private property and particles elimination. In 2022, after a fireplace broken the insured’s property, Century paid out the total coverage limits for the construction, particles elimination, and enterprise private property. Dissatisfied with the payout, the insured initiated authorized motion asserting fraud and breach of contract arguing that the protection was inadequate to exchange the broken property and looking for further funds for different coverages akin to signage, elevated value of compliance, digital knowledge, and beneficial papers. Century responded by submitting a declaratory judgment motion, looking for a ruling that it owed the insured no additional funds underneath the coverage. The circumstances have been consolidated.
Evaluation
The Court docket discovered that the insured’s fraud claims failed as a result of Century offered the precise insurance coverage coverage the insured requested, together with the said protection limits which appeared on each the applying and the coverage paperwork. The insured was charged with data of the coverage’s phrases, and the Court docket discovered no obligation for Century to reveal further details about protection. The Court docket equally rejected the insured’s argument that it relied upon opposite statements of limits of legal responsibility as a result of the categorical phrases of the applying and coverage have been clear. The Court docket adopted the tenet that an insured get together is charged with data of its personal insurance coverage coverage, admonishing towards reliance on verbal statements contradicting written agreements.
The Court docket agreed with Century that it paid the total coverage limits, precluding the insured’s further restoration for signage, beneficial papers, and digital knowledge. Because of this, the insured was not entitled to additional fee underneath the coverage. The Court docket granted abstract judgment in favor of Century and declared that Century had fulfilled its obligations and owed no additional funds to the insured.
Conclusion
This case highlights the significance of clear, written documentation of the protection limits and phrases requested by an insured. Right here, Century prevailed as a result of it may present that the insured requested and knowingly accepted the protection limits it proposed. Additional, the Court docket reaffirmed that underneath Texas regulation, an insurer isn’t typically required to advise policyholders if their chosen protection limits are satisfactory because the insured is liable for understanding and deciding on the suitable protection. By guaranteeing policyholders perceive their protection and documenting all transactions, insurance coverage corporations can decrease disputes and prevail in litigation.
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