Most property insurance policies contain appraisal clauses. These clauses define a process for appraising the value of the damaged property, if the parties cannot agree. Common provisions call for each party to choose an appraiser. Those appraisers then choose a neutral third appraiser, called the umpire. If the parties or their appraisers cannot agree on an umpire, either party may petition a court to appoint one. Once the appraisers and umpire are chosen, they value the loss. If all do not agree on the value, the decision of any two will control. A 1938, Waco Court of Appeals opinion describes the process saying the intent is to give the insurer and insured a simple, speedy, and fair means of deciding disputed value. This opinion is styled, Fire Association of Philadelphia v. Ballard.
The San Antonio Court of Appeals in a 1994 opinion styled, Providence Lloyds Insurance Company v. Crystal City, says that when the two appraisers do not agree, the umpire does not simply choose between them. It is the duty of the umpire to ascertain and determine, in the exercise of his own judgment and as the result of his own investigation, the values of the disputed items.
The 14th Court of Appeals tells us in a 1974 opinion styled, Standard Fire Insurance Co. v. Smith, that either party may seek specific enforcement of the appraisal clause, and the court will abate any pending lawsuit and compel the parties to submit to the appraisal process. In 1979, the same court said in, Standard Fire Insurance Co. v. Fraiman, that in addition, an insured may recover consequential damages sustained as a result of the insurer’s failure to comply with the appraisal clause.