A Houston appeals court recently directed a trial court to vacate its ruling denying an insurer’s motion to compel an appraisal in a claim arising from damages to the claimant’s residence and personal property allegedly resulting from Hurricane Harvey. In re QBE Specialty Ins. Co., No. 01-19-00164, 2020 WL 6140180 (Tex. App.—Houston [1st Dist.] Oct. 20, 2020). The central dispute in in re QBE involved whether the insurer had waived its right to invoke appraisal and, if not, whether the claimant had established he would nevertheless be prejudiced by the appraisal process. After a visiting judge granted the insurer’s motion to compel, the presiding judge granted the claimant’s motion to reconsider and denied the insurer’s motion to compel.

On appeal, the Court first noted that the party challenging an appraisal on the basis of waiver must show the parties reached an impasse. Due to the fact that the insurer, in prior correspondence to the claimant, repeatedly asked for additional information to evaluate the claim, and the carrier never denied the claim nor ignored the claimant or his attorney, the appellate court held no such impasse was reached in this case. Therefore, the carrier did not waive its right to invoke appraisal.

With regard to the claimant’s argument that he would nevertheless be prejudiced by the appraisal process, the Court emphasized that the policy allowed either party to invoke appraisal, both parties still had the opportunity to do so, and, although the carrier advised the claimant it was closing the claim because the estimate provided by its engineer was less than the claimant’s deductible, the carrier never denied the claim or failed to make a coverage decision. The Court therefore held that the claimant would not be prejudiced by the appraisal process.

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