Tucked into many of your insurance policies, you will find an appraisal provision which likely provides that if the insured and the insurer cannot agree to the amount of damage, either party can submit the dispute to appraisal. As discussed in my previous posts, appraisal is supposed to provide an inexpensive and efficient manner of resolving insurance disputes. However, even after an appraisal award has been rendered, the underlying dispute is not necessarily extinguished. After an appraisal award has been rendered, either party can attempt to overturn it in court. But what does it take to overturn the appraisal award?
In Breshears v. State Farm Lloyds, 155 S.W.3d 340 (Tex.App.—Corpus Christi 2004, pet. denied), the Texas Court of Appeals in Corpus Christi explained:
An appraisal award made pursuant to an insurance policy is binding and enforceable unless the insured proves that the award was unauthorized or the result of fraud, accident, or mistake.
The Court added the following caveat:
Every reasonable presumption will be indulged to sustain an appraisal decision.
In Breshears the Court concluded that there was “no evidence suggesting any fraud, accident, or mistake” and upheld the appraisal award.
So as long as an appraisal award was authorized by both parties – which it usually is – and not the result of fraud, accident, or mistake, Texas courts will uphold an appraisal award. In my experience, it is very difficult to overturn an appraisal award, so it is imperative that you and your attorney work to make sure that the appraisal process complies with the insurance policy and Texas law.