A latest Texas resolution serves as a warning to policyholders and public adjusters about counting on the appraisal course of to revive insurance coverage claims lengthy after an preliminary denial. In Pool v. State Farm Lloyds, 1 the courtroom granted abstract judgment in favor of State Farm, ruling that all the policyholder’s claims have been barred by the statute of limitations, regardless of a post-appraisal denial letter that the plaintiff argued ought to have restarted the clock.
The dispute arose from a home-owner’s declare for storm harm allegedly sustained on June 15, 2020. Plaintiff Randell Pool submitted a declare to State Farm in March 2021. Following an inspection, State Farm issued a denial letter on March 16, 2021, stating that no lined harm had been discovered. Greater than a 12 months later, Pool invoked the coverage’s appraisal provision, and the method in the end resulted in an appraisal award issued on November 9, 2022. When State Farm reviewed the appraisal, it once more declined fee in a letter dated December 12, 2022, asserting that the award included gadgets not lined by the coverage.
Pool filed go well with on February 13, 2024, asserting claims for breach of contract, violations of the Texas Insurance coverage Code, breach of the responsibility of fine religion and honest dealing, and declaratory reduction. He argued that the claims have been well timed as a result of they accrued upon receipt of the December 12, 2022, denial, which adopted the issuance of the appraisal award. Pool contended that this denial was based mostly on new data and ought to be handled as a brand new accrual date for limitations functions.
State Farm moved for abstract judgment, arguing that each one causes of motion accrued on March 16, 2021, when it initially denied the declare, and subsequently, the lawsuit was premature. The courtroom agreed.
The courtroom emphasised that below Texas regulation, causes of motion for breach of contract and associated extracontractual claims accrue on the date an insurer denies a declare, not when it later reaffirms its place following appraisal. The courtroom discovered that the March 2021 letter was an outright denial and that nothing in State Farm’s subsequent conduct, together with participation within the appraisal course of, amounted to a withdrawal or alteration of that denial.
The courtroom rejected Pool’s argument that the December 2022 denial constituted a separate or new declare denial based mostly on the appraisal findings. As a substitute, it concluded that the appraisal merely quantified loss and didn’t current new grounds for protection. State Farm’s December letter, within the courtroom’s view, was a reiteration of its authentic protection resolution. The courtroom additional defined that below Texas precedent, the appraisal course of doesn’t prolong or toll the statute of limitations, even when the insurer voluntarily participates in it after an preliminary denial.
Policyholders and public adjusters should perceive that appraisal doesn’t essentially delay or reset authorized deadlines for submitting go well with. It is determined by the precise state’s case regulation. As soon as a declare is denied in writing, the clock begins ticking, and the failure to file go well with throughout the relevant limitations interval can bar all claims in some states, even when appraisal later takes place.
Whereas appraisal is a precious contractual device to resolve disputes over the quantity of loss, it might not reopen the door to litigation. For policyholders and their representatives, this resolution is a reminder to maneuver swiftly after a denial, no matter whether or not an appraisal demand is made later. Ready too lengthy, even with good cause, can imply shedding the proper to deliver a declare solely. Public adjusters also needs to be cautious of working towards regulation when offering recommendation or explaining the implications of demanding appraisal.
This isn’t the primary time I’ve raised this problem in Texas. In “When Does the Statute of Limitations Run After a Texas Appraisal?” I made the next warning:
Value determinations are a typical various methodology to litigation for resolving property insurance coverage disputes. Nonetheless, the time to file go well with varies from state to state, even when an appraisal is invoked. Policyholders ought to be conscious that although an appraisal is invoked, some states nonetheless permit the time to deliver go well with to run regardless of the continuing appraisal. Statutes of limitation when an appraisal is concerned could be a complicated and infrequently ignored facet of a declare with disastrous outcomes if the difficulty isn’t legally analyzed.
Thought For The Day
“Your future is created by what you do at present, not tomorrow.”
– Robert Kiyosaki
1 Pool v. State Farm Lloyds, No. 6:24-cv-00154 (W.D. Tex. July 15, 2025). See additionally, Plaintiff’s Response to State Farm’s Movement for Abstract Judgment, and Defendant’s Reply in Help of its Movement for Abstract Judgment.