The Elephant in the Room: Why You Can’t Mention Liability Insurance in Most Texas Personal Injury Trials

The Elephant in the Room: Why You Can’t Mention Liability Insurance in Most Texas Personal Injury TrialsMany personal injury claims made in Texas involve liability insurance. These include car accidentstrucking accidentsdaycare injury claims, and negligent security claims. In most Texas personal injury trials, the law forbids insurance from being mentioned at trial. This includes situations where the insurance company is defending the lawsuit, negotiating to settle the claim, and will ultimately be responsible for paying any judgment or settlement. This prohibition against mentioning insurance during trial significantly impacts how insurance companies evaluate personal injury claims in Texas and the amount of money they decide to offer to settle those claims without going to court.

What Is an Insurance Company’s Duty to Defend and Duty to Indemnify?

In Texas, to sue a third person or company for a personal injury claim, the lawsuit must be filed against the third person or company that allegedly caused the injury, not their liability insurer. For example, if Driver 1 caused a car accident injuring Driver 2, if Driver 2 wanted to file a lawsuit to recover their damages from the accident, they would need to file suit against Driver 1, not Driver 1’s insurance company. Similarly, if a company is at fault for causing an injury and the injured person wants to file a lawsuit to recover compensation, under Texas law the lawsuit should be filed against the company, not the company’s insurance.

If the insured informs their insurance company after being served with the lawsuit and requests that the insurance company provide a defense to the lawsuit, under most Texas liability insurance policies the insurance company is required to:

  • provide a lawyer to their insured to defend the lawsuit and pay the legal fees of defending the lawsuit, (the duty to defend the insured under the policy) and
  • pay the amount of any final judgment or agreed settlement in the lawsuit (the duty to indemnify the insured for the amount of any judgment or settlement under the policy).

Insurance Companies Often Play a Significant Role in Strategic Decisions of How to Defend Personal Injury Lawsuits

In many personal injury cases the insurance company defending the lawsuit will have significant input into case strategy and decision-making. Typically, each claim on which a lawsuit has been filed will have a primary insurance adjuster continuously handling the file while the lawsuit is pending. The adjuster and defense attorney will usually communicate and coordinate the strategy for defending the case. Usually, this involves the attorney writing periodic reports to the adjuster updating them on things that have occurred in the case approximately every 4-6 weeks or whenever significant things happen in the case. Likewise, the defense attorney and insurance adjuster will often coordinate on evaluating case value and determining how much to offer to settle the case. Sometimes, the adjuster will even go so far as to direct the defense attorney to file certain motions or make certain arguments to the court.

If a lawsuit with significant injuries or damages goes to trial, it is common that one or even several insurance adjusters will personally come to court to observe the proceedings and update their case evaluations based on events that happen as the trial progresses. Often, the insurance adjusters in attendance at trial and the attorneys representing the injured party will continue their ongoing settlement negotiations in the courtroom during breaks out of the presence of the jury. Despite their involvement in nearly every aspect of the case from beginning to end.

Texas Rule of Evidence 411 Prohibits Mentioning Liability Insurance During Trial

Civil trial in Texas, including personal injury trials, are governed by the Rules of Evidence. These rules control what can or cannot be said or shown during trial to a jury. The general purpose of the Rules of Evidence is to assure that the evidence presented in court during a trial is authentic, reliable, and relevant to the issues being disputed at trial. Many of the Rules of Evidence relate to proving that specific types of documents such as business records or photographs are authentic and genuine. Texas Rule of Evidence 411 deals specifically with the issue of when liability insurance can and cannot be mentioned in court during trial. Rule 411 states the following:

Rule 411. Liability Insurance. Evidence that a person was or was not insured against liability is not admissible to prove whether the person acted negligently or otherwise wrongfully. But the court may admit this evidence for another purpose, such as proving a witness’s bias or prejudice or, if disputed, proving agency, ownership, or control.

The effect of Rule 411 is that in most personal injury trials, if the defendant has liability insurance that fact cannot be mentioned in front of the jury, and doing so even accidentally will very likely draw a strong rebuke from the judge and possibly even harsher punishments and consequences.

The end result of this is that in every personal injury case where a person or business is alleged to be at fault for causing the injury, the person or business is named as the defendant and the entire trial proceeds from beginning to end without any mention of insurance.

Why Do the Rules of Evidence Forbid Mentioning Liability Insurance in Texas During Most Trials?

Many people are surprised to learn that insurance is not allowed to be mentioned during trial because this seems counterintuitive to many of us. The court system and the process of a jury trial are supposed to be institutions of justice that allow us as a society to sift through conflicting evidence and information to reveal the truth. The process of initial jury selection is even called voir dire, which literally means to speak the truth.

In light of all this, why do the Rules of Evidence prohibit mentioning liability insurance at trial? The simple answer is because insurance companies are some of the largest, wealthiest, most powerful, and well-connected companies in Texas and the United States, and often influence law and government policy to promote their interests. The general conventional thinking is that that juries will typically award higher damages if they know they will ultimately be paid by insurance, rather than individual defendants, so preventing insurance from being mentioned reduces the judgment amounts insurers have to pay, with lower payouts leading to higher insurance profits.

Are There Other Ways Texas Rule of Evidence 411 Helps Insurance Companies?

Rule 411 helps insurance companies by allowing them to hide their involvement in defending personal injury lawsuits and their responsibility to pay the amount of any judgment issued. Because insurance cannot be discussed during a personal injury trial in Texas, the jury deciding the case will not get to hear about the revolving door of changing adjusters, litigation delay tactics, low-ball settlement offers, and other similar conduct by the insurance company. Often, the insurance company’s actions are the reason why it is even necessary to go to trial, but unfortunately, under current Texas law a jury will not get to hear about them in most personal injury cases. Rule 411’s prohibition against mentioning insurance also forces the plaintiff to stay silent about the stress, suffering, and anguish caused by the insurance company’s actions.

Can You Mention Insurance During a Texas Personal Injury Trial if You Are Suing Your Own Insurance Company?

Generally speaking, the answer to this question is yes. Usually this situation will come up most often when someone is suing their own auto insurance company for refusing to pay the full and fair amount of damages for an Uninsured/Underinsured Motorist claim or a property claim. An insurance company has a direct legal obligation to its insured(s) under the contract terms of the insurance policy. Any claim by someone that their own insurance is wrongfully denying or underpaying their claim should be brought against the insurance company directly under Texas law. Because the insurance company would be a named defendant in the lawsuit, Rule 411 would not apply to these types of situations and there would be no prohibition on mentioning insurance at trial during those instances.

Are There Any Other Exceptions Where Texas Law Allows Liability Insurance to Be Mentioned During Trial?

Yes, although they rarely come up, as they are exceptions to the general rule for a reason. One of the exceptions is found in Rule 411 itself, which states that evidence of liability insurance can be admissible for proving disputed matters such as agency, ownership, or control. An example of this would be a situation where there is a dispute whether a defendant owns a car involved in an accident. If the defendant bought insurance for the car a week before the wreck, the evidence of liability insurance could potentially be admissible at trial for the issue of whether the defendant owned or controlled the vehicle.

Another exception that sometimes comes up is the evidentiary rule of “opening the door.” In a personal injury lawsuit, the prohibition against mentioning insurance is generally believed to be helpful to the defendant and bad for the plaintiff, as the conventional thinking is that juries will typically award higher damages if they know they will ultimately be paid by insurance, rather than the individual defendant. Accordingly, if liability insurance is mentioned during a personal injury trial, the consequences can be very different depending on who mentioned it and how. As we said earlier, if the person who improperly mentions insurance is someone from the plaintiff’s side of the case, this will most likely draw a strong rebuke and admonition from the judge and could even result in a mistrial.

Conversely, if during the same trial liability insurance is improperly mentioned by the defendant or someone on their side of the case, they will most likely not be rebuked or admonished by the judge, though the consequences for their case could be significant. As it’s used in relation to the Rules of Evidence and trial testimony, “opening the door” generally means that after a judge specifically instructed the parties not to mention something in front of the jury – in this case insurance – the parties or someone from their team did so anyway. Because the jury has already heard insurance being mentioned, depending on the specific facts and circumstances, the “door” to discussing insurance which was supposed to remain closed has been opened in front of the jury, and depending on what has already happened and how the judge rules, further discussion of insurance may be fair game going forward for the rest of a trial once the door has been opened.

Another way in which defendants or their trial team can sometimes open the door to discussions of insurance is by implying or explicitly stating that the judgment from the trial would have to be paid by the defendant, rather than their insurance company. These types of statements are false and improper under the law. Depending on the specific facts and circumstances, if the defendant or their trial team engage in these kinds of tactics, they risk having the judge rule that they opened the door to discussing insurance by making an improper and false representation to the jury about who would ultimately be responsible for paying the judgment from the lawsuit, with the only way to correct this improper action being to allow the jury to hear the relevant information about insurance. In this scenario, the false statements to the jury about who would ultimately be paying the judgment opened the “door” to being able to discuss insurance in order to correct the initial misinformation.

What Should I Do if I’ve Been Injured and May Need to Make a Personal Injury Claim?

Texas personal injury law is complicated. If you’ve been injured due to someone else’s fault, it’s important to have the right attorneys by your side to help you navigate the complexities of the Texas legal system and work to obtain justice and receive full and fair compensation for your damages.

Our experienced personal injury lawyers at The Kishinevsky Law Firm have helped injured clients in the greater Houston area and throughout the State of Texas to successfully obtain full and fair compensation for their damages. If you’ve been injured in a car accident, truck accident, work accident, or any other situation where someone else caused your injury, contact our office today to schedule a free consultation to discuss your situation and find out how we may be able to help.