Insurance Claims And Statute Of Limitations

Insurance lawyers need to read this November 2023, opinion from the Southern District of Texas, McAllen Division.  It is styled, Bertha Salinas v. State Farm Lloyds.
The relevant facts are undisputed,  Bertha sued State Farm for denying her claim against her homeowners policy due to a weather event on July 26, 2020.  State Farm paid some sums of money on the claim but did not pay what Bertha alleges she was owed.  On April 16, 2021, State Farm sent a letter explaining it was denying further payment on the claim.  Upon receipt of the letter, Bertha invoked the appraisal provision under the policy.  State Farm participated in the appraisal but did so under a reservation of rights.  In the appraisal process an umpire ultimately ruled against State Farm on March 30, 2023.  The attorney for Bertha sent a written inquiry about payment of the appraisal.  On June 30, 2023, State Farm stated they would not be paying the appraisal award.  State Farm argued about problems with the appraisal.  Bertha filed suit on July 18, 2023.
State Farm moved for summary judgment on the case due to the statute of limitations having run on two years after their April 16, 2021, thus, the filing date of July 18, 2023, was too late.
Bertha argued that when State Farm participated in the Appraisal process that the statute of limitations was extended.  This position ignores that State Farm participated in the process under a reservation of rights.
The Court granted summary judgment in favor of State Farm.  Almost all homeowner policies have appraisal provisions in them.  This case is a must read for attorneys handling claims where the appraisal process in invoked.
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