Texas Insurance Code 2602.255 – Claims Not Covered
Terms Used In Texas Insurance Code 2602.255
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
The following are not covered claims:
(1) an amount due a reinsurer, title insurance company, insurance pool, or underwriting association as a subrogation recovery or otherwise;
(2) a supplementary payment obligation incurred before a determination is made under this chapter that a title insurance company or agent is impaired, including:
(A) adjustment fees or expenses;
(B) attorney’s fees or expenses;
(C) court costs;
(D) interest;
(E) enhanced damages, sought as a recovery against the insured, the impaired title insurance company or agent, or the association, that arise under Chapter 541 of this code or Subchapter E, Chapter 17, Business & Commerce Code, or a similar law of another state; and
(F) bond premiums;
(3) a shortage of trust funds or in an escrow account resulting from the insolvency of a financial institution;
(4) exemplary, extracontractual, or bad faith damages awarded against an insured or title insurance company by a court judgment;
(5) a claim under Section 2602.252 by a claimant who has a lien against the real property that was the subject of the transaction from which the claim arises, unless the lien is held to be invalid as a matter of law;
(6) a claim under Section 2602.251, 2602.252, or 2602.253 by a claimant who caused or substantially contributed to the claimant’s loss by the claimant’s action or omission, as determined by the association or the association’s agent; and
(7) a claim filed with the association after the claim filing deadline for an impaired title insurance company or agent.