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Texas Hail Damage Claims Settled By Appraisal

Posted by Joe Brennan | Posted in Appraisal Umpire, Homeowners Insurance, Independent Appraiser, Insurance Advice, Insurance Claims Help, Insurance Dispute | Posted on 07-23-2010


Hail Damage Texas CourtsTexas courts are protecting policyholders who disagree with their insurance company when it comes to fairly settling insurance claims (in this case roof hail damage claims). It’s bad enough to have insurance claim damage to your property, the last thing one needs is to have to become a professional wrestler to obtain what is rightfully theirs. Well, the Texas courts agree.

Most insurance policies in Texas (TX) have an appraisal clause that allows the parties of the contract to resolve a dispute on the “amount of loss.” In short, the amount required to fully complete the repairs caused by a covered event. For instance; a policyholder could be forced to hire an independent appraiser to enter into the appraisal process to protect their interests.

A recent Texas (TX) case between JM Walker, LLC and Acadia Insurance Company, revealed how an independent appraiser, through the appraisal process, protected a policyholder from highly costly mistakes made by the insurance company. Mistakes so grossly underestimated, that it could have cost the policyholder “hundreds of thousands of dollars!” Each appraisal and claim can be a bit different by how the appraisal clause is worded in the policy. Also, by the type of damage that occurred and even by all the facts pertaining to the loss. However, this rarely used clause can provide a fair shake.

In this situation, JM Walker owned five buildings in North Richland Hills, Texas (TX). A hailstorm caused damages to the roofs of the five buildings. Walker submitted a claim to his insurance company, Acadia. However, at first Acadia denied the claim after their adjuster determined that the roofs did not need to be fully replaced, and that the damage that was caused by the hail, did not reach the $5,000 deductible that applied to the policy.

Walker disagreed with that analysis and the adjuster’s findings. Acadia then invoked its contractual right to appraisal. Walker tried to take the matter to court by filing a lawsuit, but the Judge compelled the parties to agree to the appraisal process. It is not unusual for the courts to suggest this, as most policies require that all policy provisions be exhausted before entering litigation.

The appraisal process includes two independent appraisers (one hired by each party) and an appraisal umpire. If the independent appraisers cannot agree on an amount of loss they can submit their differences to the umpire. The umpire in this appraisal process found on behalf of JM Walker and produced an award for the amount of loss at $423,053.96. Appraisal awards are binding, therefore, Acadia paid the amount. (You may recall that their first offer was $0, because they determined the loss to be below the $5,000 deductible.)

JM Walker tried filing an appeal to the United States Fifth Circuit. It was Walker’s belief that he was entitled to more hail damage proceeds and was also seeking additional money for what he believed was “bad faith” actions by Acadia with their miss handling of the claim.

In this appeal, the Court ruled that under Texas law, “appraisal 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 also ruled that a binding appraisal can only be overturned in only 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 on all three of these points and was overruled by the court on all three. This case is a good resource for how the courts look at the appraisal process in Texas. Overall, in my opinion, the Independent Appraiser and the Appraisal Process protected and worked for JM Walker. As a result of the work by the Independent Appraiser and the Appraisal Process, Walker received $418,053.96 over what his insurance company was willing to pay for his loss.

In the event you find yourself within a roof hail damage claim dispute in Texas, call upon an Independent Appraiser for assistance in the insurance appraisal process. Insurance Appraisal Services is what we do. Feel free to call Insurance Claims Group, Inc. at 919-669-9111 to have all your insurance appraisal questions answered.

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(C) Joe Brennan is President and owner/operator of Insurance Claims Group, Inc., a national independent adjusting, appraisal, and umpiring firm. We will answer your claim questions FREE as part of our FREE Insurance Advice and Insurance Claim Consulting Services.

Insurance Claims Group, Inc.
Joe Brennan
Ph: 919-669-9111
Fx: 919-573-9595

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