Dallas Fort Worth Insurance Lawyer Blog

A lot of homeowners insurance policies in Texas have "appraisal" clauses written into them. So whether you live in Weatherford, Texas, or in Grand Prairie, Arlington, Fort Worth or Dallas, if you have homeowners insurance you need to be aware of these appraisal paragraphs.
An appraisal paragraph is of benefit to the insurance company. That is why they put it into the insurance policy. When the homeowner and the insurance company cannot reach an agreement on the amount of money that should be paid on a claim, the insurance company will try to invoke the appraisal clause in the insurance contract. Appraisal happens when the insurance company knows they owe the homeowner money, but there is a dispute as to how much money is owed.
The United States District Court, Southern Division, recently handled a case where the issue was whether the homeowner properly defeated the insurance company trying to invoke the appraisal process. The style of the case is, Hector Sanchez v. Property and Casualty Insurance Company of Hartford and Irene Bernardo. The courts' opinion was handed down on January 27, 2010.
In this case Sanchez made a claim for benefits on October 26, 2008. This was after Hurricane Ike struck Harris County, Texas, on September 12, 2008. The next day Property and Casualty Insurance Company of Hartford (Hartford) sent adjuster Irene Barnardo out to inspect the Sanchez home. Bernardo concluded that Sanchez had suffered a loss, but that the loss was only $150, an amount below Sanchez's deductible of $5,850.
In a letter dated October 29, 2008, Hartford refused to make a payment on his claim. Sanchez called to complain the next day. Six months later, Sanchez called Hartford complaining about their handling of the claim and then filed a lawsuit on April 29, 2009, which Hartford received on May 12, 2009.
When making a claim for insurance benefits the Texas Insurance Code, Section 541.154 provides that a person must give a 60 day written notice to the insurance company before filing a lawsuit.
Hartford, successfully had the case removed to Federal Court on June 5, 2009 and filed an answer to the lawsuit on June 29, 2009. Two months later, on August 3, 2009, Hartford filed a motion with the Court having the case abated for 60 days so that the time required for notice could be observed. The case was unsuccessfully mediated in September. Then on October 15, 2009, Hartford sent Sanchez correspondence seeking to invoke the appraisal clause in the insurance policy.
The bad thing for policy holders is that most appraisal clauses have requirements in them similar the Sanchez appraisal clause. It required Sanchez to: 1) pay for his own appraiser and, 2) bear the other expenses of the appraisal and umpire equally with the insurance company.
Without getting into more details of this case and the law associated with it, Sanchez prevailed, and did not have to submit to the appraisal process. The bottom line to his victory were the arguements his lawsuit attorney was able to make regarding the time frame that had past without Hartford invoking its right to the appraisal process.
An experienced Insurance Law Attorney would understand how this process works. It is important for a policy holder to get an attorney involved early in this process to more assure the policy holder will not get cheated by having to submit to the appraisal process.

Lots of insurance policies are issued with arbitration agreements written into them. Almost never, will the person taking out the insurance policy be aware of, or ask about an arbitration agreement being part of the insurance policy. Residents of Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or any any city or town in Texas can be adversely affected by these arbitration clauses in the insurance policy.
Lake Texoma Highport, LLC, v. Certain Underwriters at Lloyd's of London, et. al., is a recent case discussing arbitration clauses in insurance policy's. This case was decided on December 28, 2009, and is good reading to try and understand the way courts look at arbitration clauses.
Lake Texoma Highport, LLC ("Highport") owns a marina. In early 2005 and early 2006 and in 2007 Highport instructed defendant Houstoun, Woodward, Eason, Gentle, Tomforde and Anderson, Inc. d/b/a Insurance Alliance ("Insurance Alliance") to locate a property insurance policy. Insurance Alliance provided Highport with a property insurance agreement from defendant Certain Underwriters at Lloyd's of London ("Lloyd's"). Highport suffered damages and filed a claim under the policy. Highport then learned for the first time that CRC Insurance Services, Inc ("CRC") and Bowood Partners, Limited ("Bowood") were active participants in procurment of the insurance policy.
Highport settled against Lloyd's. CRC filed a motion with the court to compel arbitration based upon an agreement between CRC and Insurance Alliance that contained an arbitration clause.
The court discussed how the Federal Arbitration Act ("FAA") expresses a strong national policy favoring arbitration of disputes, and all doubts concerning the arbitration of claims should be resolved in favor of arbitration. The FAA, leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.
In deciding whether or not to order the litigants to arbitration, the Court must address two questions. First, whether there is a valid agreement to arbitrate, and second, whether the dispute in question falls within the scope of the arbitration agreement.
After stating the above, the Court then began to analyse the situational facts in this case to determine what was appropriate. In the end the parties were ordered to arbitration. A reading of the case gives insight into how courts apply the laws related to arbitration agreements to the particular fact pattern in a case.
The case is a good read for trying to understand how these types of case are decided. If someone finds themselves in a situation where they discover they have an arbitration agreement in their insurance policy, the natural question would be, "What difference does it make in my situation?" For a discussion of this, an Experienced Insurance Law Attorney should be consulted.