Appraisal In Insurance Texas Insurance Disputes

A lot of insurance contracts have written into them an appraisal clause or paragraph. Whether you bought the policy in Grand Prairie, Arlington, Dallas, Fort Worth, or out in Weatherford, Texas, you could be forced to submit to an appraisal process if the insurance company insists on enforcing that portion of the insurance contract.
A recent case, JM Walker, LLC v. Acadia Insurance Company, is an example of how these situations are sometimes handle. Each case would be different depending on the wording of the appraisal provision in the contract and the facts of the case.
In this case, Walker was the owner of five building in North Richland Hills, Texas. The roofs of the building suffered damage from a hailstorm. Walker submitted a claim to Acadia, but Acadia denied coverage after its adjuster determined that the roofs did not need to be replaced and that the damage that did exist, was less than the $5,000 deductible that applied in the case.
Walker contested the adjusters findings and Acadia invoked its contractual right to appraisal. Walker then filed a lawsuit, but the Judge compelled the parties to submit to the appraisal process.
The umpire in the appraisal process found on behalf of Walker and found the cost of repair to be $423,053.96. Acadia paid the amount.
Walker filed an appeal in the United States Fifth Circuit, which is the case written about here. Walker wanted more money for his damages, plus was seeking monies for the “bad faith” conduct of Acadia and their handling of the claim.
The Court in its decision stated that under Texas law, “appaisal awards made pursuant to the provisions of an insurance contract are binding and enforceable, and every reasonable presumption will be indulged to sustain an appraisal award.” The Court wrote that an otherwise binding appraisal may be disregarded in three situations: “(1) when the award was made without authority; (2) when the award was made as a result of fraud, accident, or mistake; or (3) when the award was not in compliance with the requirements of the policy.”
Walker argued all three points and was shot down on all three points. The case is a good place to look to get an idea of how the courts look at these appraisal processes and how they are handled.