“The function of an umpire who is to act in matters of difference only is not to coincide with one or the other of the appraisers, but he is to make his award independently of such estimates.” Fisch v. Transcontinental Ins., 365 S.W.2d 186, 190 (Tex.Civ.App. — Houston 1962, writ ref’d n.r.e.). Many appraisers believe that… Continue reading Section 3: Must the Umpire Choose One Appraiser’s Estimate?
Author: Thomas W. Hamrick, Attorney at Law, Senior Counsel
I currently serve as Senior Counsel to a highly recognized multistate law firm with offices in four states. I have more than 35 years of experience representing clients on both sides of the docket, with a practice focused on first-party property insurance coverage and appraisal issues.
Section 3: Overhead and Profit
“Overhead and profit . . . is an integral part of many claims and we believe it should be within the appraisers and umpires discretion in the determination of the actual value of the loss to consider contractors overhead and profit.” Putich, Mark, Fire Insurance Exchange, Texas Farmers Insurance, Co. “Re: TX Appraisal.” Letter to Texas Department of Insurance.… Continue reading Section 3: Overhead and Profit
Section 3: Why You Don’t Have to Use Xactimate.
“These provisions require that estimates should be reasonable and not necessarily the product of a particular style, system or vendor exclusive of other reasonable alternatives. For example, insurers should not routinely eliminate from consideration certain estimate practices, concepts, and tools that may be used in estimating damages for a covered loss.” Texas Dep’t of Insurance,… Continue reading Section 3: Why You Don’t Have to Use Xactimate.
Section 3: Must Appraisers Always Consider Causation?
[Trick Question] “An appraisal clause binds the parties to have the extent or amount of loss determined in a particular way.” State Farm Lloyds v. Johnson, 290 S.W.3d 886, 888 (Tex. 2009). See Farmers’ New Endorsement The answer, as always, depends upon on the terms of the policy’s appraisal clause. For example, Section 8e of Farmers’… Continue reading Section 3: Must Appraisers Always Consider Causation?
Section 3: New Versus Old Hail/Wind Damage
“An appraisal is for damages caused by a specific occurrence, not every repair a home might need. When asked to assess hail damage, appraisers look only at damage caused by hail; they do not consider leaky faucets or remodeling the kitchen.” State Farm Lloyds v. Johnson, 290 S.W.3d 886, 888, 893 (Tex. 2009). When Different Causes… Continue reading Section 3: New Versus Old Hail/Wind Damage
Section 3: Asking a Judge to Appoint an Umpire–an Informal Process.
Most homeowner’s policies contain appraisal language providing for judicial appointment of umpires. However, “selection of an umpire by a judge in accordance with the terms of [an insurance policy] does not require the filing of a lawsuit or invoking the subject matter jurisdiction of a court.” Texas Mun. League Joint Self-insurance Fund v. Hous. Auth. of… Continue reading Section 3: Asking a Judge to Appoint an Umpire–an Informal Process.
Section 3: Direct Physical Damage
“The central meaning of [physical injury] as it is used in everyday English — the image it would conjure up in the mind of a person unschooled in the subtleties of insurance law — is of a harmful change in appearance, shape, composition, or some other physical dimension of the ‘injured’ person or thing.” U.S. Metals,… Continue reading Section 3: Direct Physical Damage
Section 3: Does Like Kind and Quality Include More Expensive?
“Mex-Tex’s roofing contractor and its expert at trial both testified that the old and new roofs were comparable. The only evidence to the contrary was the difference in cost. In these circumstances, the trial court could find that Republic breached the policy by refusing to pay the cost of the new roof.” Republic Underwriters ins. v.… Continue reading Section 3: Does Like Kind and Quality Include More Expensive?
Section 3: Depreciation of Overhead and Profit
“GCOP (general contractor overhead and profit) and sales tax are considered ‘replacement costs because they are factored into policy limits and contractors’ bids. Because GCOP, sales tax, repair costs, and property value together represent the total replacement cost value, it follows naturally that GCOP, sales tax, repair costs, and property value ought to be depreciated… Continue reading Section 3: Depreciation of Overhead and Profit
Section 3: Onsite Inspection — Is it Required?
“There is no explicit requirement that the appraisers and umpire inspect the property or read the policy, and many do not.” State Farm Lloyds v. Johnson, 290 S.W.3d, 886, 890 (2009), footnote 23, citing Br. of Tex. Windstorm Ins. Ass’n As Amicus Curiae Supporting Pet’rs at 8 In footnote 23, the Johnson court recognizes that appraisers and umpires can… Continue reading Section 3: Onsite Inspection — Is it Required?
Coffee with Tom 