Clear Appraisal Awards: Texas Windstorm Ins. Assoc. v. Dickinson Independent School Dist.
Recently, the Court of Appeals of Texas addressed the issue of whether an appraisal award in itself constitutes sufficient evidence to establish a carrier’s coverage liability. The case, arising out of contested property damage resulting from Hurricane Ike, confirms the importance of clear, detailed appraisal awards. In reliance on Supreme Court of Texas’s decision in State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009), the court reiterated that only courts can decide issues of coverage, including whether a specific cause of loss is covered.
“Texas courts hold that appraisal awards made under the provisions of an insurance contract are binding and enforceable, and courts indulge every reasonable presumption to sustain an appraisal award.” However, when contesting coverage on causation grounds, if a party is offering an appraisal award that lacks clear detail as to causation, the court holds that a boilerplate award in itself is insufficient for a party to meet its burden of proof. Thus, when there are questions of coverage during an appraisal, the parties must assure that the appraisers issue an award containing satisfactory details about the type and cause of damages.