In Farmers Texas Cty. Mut. Ins. Co. v. Zuniga, 548 S.W.3d 646 (Tex. App. 2017), the Court found that the specific language of an automobile liability policy’s insuring agreement precluded coverage for punitive damages in the first instance. The language in the insuring clause provided the insurance company would “pay damages for bodily injuries” arising from the use of an automobile. According to the Texas Court, the “pay damages for bodily injuries” language limited the scope of the insuring clause such that punitive damages were not within the original grant of coverage. The insureds attempted to argue that because the Farmers policy did not contain an express punitive damage exclusion, that punitive damages were covered. However, the Court rejected this argument, finding that the language of the insuring agreement created and circumscribed the scope of coverage. Under the language of the insuring agreement, Farmers agreed to pay damages “for” bodily injury and not any damages that were “because of” bodily injury. Punitive damages were not damages awarded “for bodily injury” but were damages awarded “because of” bodily injury.
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