Appraisal Clauses In Policies

Either the insurance company or the insured has a right to demand an appraisal in lots of property insurance contracts.  The Waco Court of Appeals issued an opinion recently that discusses these appraisal clauses.  The case is styled, In Re GuideOne Mutual Insurance Company.

This case is a writ of mandamus complaining of the trial court’s refusal order appraisal to proceed as allowed in the insurance contract.

Appraisal clauses, commonly found in homeowners, automobile, and property policies in Texas, provide a means to resolve disputes about the amount of loss for a covered claim.  These clause are generally enforceable, absent illegality or waiver.

Trial courts have no discretion to ignore a valid appraisal clause and abuses it’s discretion by not enforcing it when requested by one of the parties.

In this case, D.S. Patel sued GuideOne based on Patel’s contention that he sustained damages that were underpaid by GuideOne.

Patel argued the appraisal clause had been waived.  However, the insurance contract contains a non-waiver provision.  Patel argues the on-waiver provision is unilateral.

In making its decision, this Court stated:

We agree with the reasoning of the Amarillo Court.  We cannot ignore the
language of the insurance contract between the parties in this case.  The policy provides that its terms can only be waived by endorsement issued by GuideOne and made a part of the policy.  There is no indication in this record that an endorsement waiving the appraisal clause was issued and made a part of the policy.  Also, Patel does not argue the non-waiver clause is invalid.  Patel essentially argues that we should modify the language in the contract.  We decline the invitation to rewrite the agreement of the parties.  We hold the non-waiver clause is valid.  Further, because the non-waiver clause is valid, and based on the undisputed facts in this case, any issue of waiver of the appraisal clause
argued by Patel in the trial court is immaterial.  Thus, the trial court abused its discretion in refusing to grant GuideOne’s motion to compel appraisal, and GuideOne’s sole issue is sustained.