Case Law Library

Landmark insurance rulings across Texas, Oklahoma & Colorado — in plain English.

A curated reference of the decisions and statutes that shape first-party property insurance claims in the three states we work with most. This is educational material, not legal advice — for a specific dispute, consult a licensed attorney in your state.

Appraisal: Statutory vs. Contractual

Appraisal is the contractual mechanism most property policies use to resolve disputes over the amount of loss. It is not the same thing in every state — and the details (who bears the umpire's fees, when it is proper to invoke) drive real dollars.

Texas

Contractual

Texas has no general statute mandating appraisal. The right to invoke appraisal comes entirely from the appraisal clause in the policy itself. Courts strongly favor enforcement of that clause and will typically abate a lawsuit until appraisal is complete when either party timely demands it.

Who pays the umpire

Under the standard appraisal clause, each party pays its own appraiser. The umpire's fee and any expenses of the appraisal itself are split equally between the insured and the carrier — 50/50.

Own appraiser & fees

Each side bears the cost of its own appraiser, its own experts, and its own attorneys. Qualified appraisers in Texas are typically retained on an hourly basis (commonly around $250/hour) against an up-front retainer — appraisers do not work on a percentage of any award or recovery. There is no fee-shifting inside the appraisal process itself.

Invoking while still bidding

In Texas, invoking appraisal 'while the claim is still being bid' is generally premature — the clause requires an actual disagreement on the amount of loss. Best practice is to complete a documented scope, exchange estimates, and only then invoke appraisal once the disagreement is real and quantified. Invoking too early can be challenged as improper, and invoking too late (after unreasonable delay or after suit is deep into litigation) can be waived.

Oklahoma

Contractual

Oklahoma's appraisal right is contractual, arising from the appraisal clause in the policy. Oklahoma courts enforce the clause when properly invoked and generally stay proceedings pending appraisal. There is no separate statute forcing appraisal, but Oklahoma's Unfair Claims Settlement Practices Act (36 O.S. § 1250.1 et seq.) still governs the carrier's conduct throughout.

Who pays the umpire

Same standard as Texas under the typical policy: each party pays its own appraiser, and the umpire's fee plus common appraisal expenses are shared 50/50.

Own appraiser & fees

Each side pays its own appraiser, experts, and lawyers. Appraisers in Oklahoma are engaged on an hourly rate (commonly around $250/hour) with a retainer — never a contingency or percentage of the award. Bad-faith and statutory claims can shift attorney fees later, but not the appraisal costs themselves.

Invoking while still bidding

As in Texas, appraisal in Oklahoma requires a real disagreement on the amount of loss. Invoking while a carrier's adjuster is still actively bidding the file (before a written estimate, denial, or lowball offer) is usually premature. Get the carrier's number in writing first — that number is what a panel needs to price against.

Colorado

Statutory + Contractual

Colorado's appraisal right primarily flows from the policy's appraisal clause. Colorado layers on strong statutory protections through C.R.S. §§ 10-3-1115 and 10-3-1116, which impose double damages plus attorney fees for unreasonable delay or denial — separate from and independent of the appraisal process. The statutory clock keeps running even while an appraisal is pending.

Who pays the umpire

Under the standard clause used in Colorado policies, each party pays its own appraiser and the umpire's fee is split equally. Some Colorado-specific policy forms modify this — read the appraisal clause on your declarations page carefully.

Own appraiser & fees

Each side pays its own appraiser and counsel inside the appraisal. Colorado appraisers are retained on an hourly basis (commonly around $250/hour) against a retainer — appraiser compensation is never tied to a percentage of the award. A successful §§ 10-3-1115/1116 claim can recover attorney fees and costs on top, but that is a separate court action, not an appraisal remedy.

Invoking while still bidding

Colorado follows the same rule: appraisal requires a real disagreement on amount. Because §§ 10-3-1115/1116 penalize unreasonable delay, timing matters both ways — invoking appraisal too early can be premature, but sitting on an unreasonable lowball too long is exactly what the statute is written to punish. The right move is usually to document the disagreement, put the carrier on written notice, and then invoke.

Universal principles that apply in all three states

Appraisal decides the amount of loss, not coverage. Whether a peril is covered, whether an exclusion applies, or whether the insured breached a condition stays with the court.
Causation questions tied to the extent of damage from a covered peril (how much of the roof is wind vs. wear) can fall within the appraisal panel's authority. Pure causation (whether the covered peril occurred at all) does not.
The standard clause splits umpire fees 50/50. Each side pays its own appraiser — appraisers are retained hourly (commonly around $250/hour) with a retainer, not on a percentage of the award. Neither side's attorney fees are recoverable inside appraisal.
Timing matters. Invoking too early — before a real, documented disagreement on amount — can be premature. Waiting too long, especially after suit is filed and litigated, can be treated as waiver.
NFIP flood claims are different. Standard Flood Insurance Policies (44 C.F.R. Pt. 61, App. A(1)) contain an appraisal clause, but strict federal proof-of-loss and suit-limitation rules mean appraisal cannot cure a defective NFIP claim. See our blog post on NFIP flood policies.

Texas

Texas Supreme Court decisions and statutes that shape first-party property insurance claims.

Bad Faith / Chapter 5412018

USAA Texas Lloyd's Co. v. Menchaca

545 S.W.3d 479 (Tex. 2018)

Holding

Set out the five rules governing the relationship between a breach-of-contract claim on a policy and statutory bad-faith claims. As a general rule, an insured cannot recover statutory damages without establishing a right to policy benefits, subject to a narrow independent-injury exception.

Why it matters to you

Nail down the underlying coverage and amount-of-loss issues first — the statutory bad-faith case usually stands or falls with the policy claim.

Prompt Payment of Claims Act (Ch. 542)2019

Barbara Technologies Corp. v. State Farm Lloyds

589 S.W.3d 806 (Tex. 2019)

Holding

Payment of an appraisal award does not automatically defeat a Prompt Payment of Claims Act (TPPCA) claim. TPPCA liability depends on whether the carrier was ultimately liable and whether it met the statutory deadlines.

Why it matters to you

Keep a clean timeline of every carrier communication and payment. Missed statutory deadlines carry interest and attorney's fees even after appraisal.

Appraisal Award / Contract Claims2019

Ortiz v. State Farm Lloyds

589 S.W.3d 127 (Tex. 2019)

Holding

A carrier's timely payment of a binding appraisal award generally forecloses a breach-of-contract claim tied to the same underpayment and can defeat certain bad-faith theories based only on the amount underpaid.

Why it matters to you

Appraisal is the right tool for amount-of-loss disputes. It is the wrong tool for coverage disputes, fraud allegations, and conduct-based bad-faith claims.

Concurrent Causation2015

JAW The Pointe, L.L.C. v. Lexington Insurance Co.

460 S.W.3d 597 (Tex. 2015)

Holding

Where a covered peril and an excluded peril combine to cause a single loss, the insured bears the burden of segregating the damage attributable to the covered cause.

Why it matters to you

Hurricane, hail, and wind claims are frequently reduced under 'wear and tear' or 'flood' exclusions. A detailed, line-item scope is what separates covered from excluded damage.

Pre-Suit Notice / Weather Claims2017

Texas House Bill 1774 (codified at Tex. Ins. Code ch. 542A)

Tex. Ins. Code ch. 542A (eff. 2017)

Holding

For first-party claims arising from forces of nature, a policyholder must send a written pre-suit notice at least 61 days before filing suit, specifying the acts complained of, the amount alleged to be owed, and attorney's fees incurred to date.

Why it matters to you

Skipping or shortchanging the 542A notice can cost the policyholder a portion of statutory attorney's fees. Get a first-party attorney involved before sending it.

Scope of Appraisal2009

State Farm Lloyds v. Johnson

290 S.W.3d 886 (Tex. 2009)

Holding

Appraisal is proper for disputes over the 'amount of loss,' which includes causation questions tied to the extent of damage from a covered peril. It is not proper for pure coverage disputes.

Why it matters to you

Even causation questions (how much damage was caused by wind vs. wear) can fall within appraisal — an important tool when the fight is really about scope.

Oklahoma

Oklahoma is a strong first-party bad-faith jurisdiction. These are the cases and statutes that define the carrier's duties.

Bad Faith (First-Party)1977

Christian v. American Home Assurance Co.

577 P.2d 899 (Okla. 1977)

Holding

Oklahoma recognized a first-party tort cause of action for an insurer's breach of the implied duty of good faith and fair dealing. An insurer that unreasonably delays or denies payment of a valid claim may be liable for tort damages beyond the policy limits.

Why it matters to you

Oklahoma is a strong bad-faith state. Document every carrier delay, lowball, or unreasonable denial — it can support tort damages on top of the policy benefits.

Bad Faith Standard1991

Buzzard v. Farmers Insurance Co.

824 P.2d 1105 (Okla. 1991)

Holding

Clarified the standard for bad faith: the insurer's conduct must be evaluated against what a reasonable insurer would have done under the same circumstances. A legitimate dispute over coverage or amount is not, by itself, bad faith.

Why it matters to you

The fight is over reasonableness — a well-documented estimate, engineer report, and claim file are the best evidence that the carrier's position was not reasonable.

Bad Faith / Investigation Duty2009

Ball v. Wilshire Insurance Co.

221 P.3d 717 (Okla. 2009)

Holding

An insurer's duty of good faith includes conducting a reasonable investigation of the claim. Failing to investigate adequately before denying or underpaying can itself constitute bad faith.

Why it matters to you

If the carrier's adjuster spent 20 minutes on your roof and denied the claim, that shallow investigation is itself evidence.

Claims Handling StatuteStatute

Oklahoma Unfair Claims Settlement Practices Act

36 Okla. Stat. § 1250.1 et seq.

Holding

Sets the standards insurers must follow when handling claims — including timely acknowledgment, prompt investigation, and reasonable explanations for denials or offers.

Why it matters to you

Violations of the Act commonly support bad-faith claims. Keep a dated log of every communication with the carrier.

Colorado

Colorado combines common-law bad faith with a powerful statutory remedy (double damages plus attorney fees) for unreasonable delay or denial.

Bad Faith Damages2004

Goodson v. American Standard Insurance Co.

89 P.3d 409 (Colo. 2004)

Holding

A first-party insured may recover non-economic damages (such as emotional distress) for an insurer's bad-faith breach of the duty of good faith and fair dealing — without proving physical injury.

Why it matters to you

Colorado allows recovery beyond the policy benefits when the carrier's conduct crosses the line. Preserve evidence of the impact the delay or denial had on the household.

Statutory Bad Faith / Unreasonable Delay2008

C.R.S. §§ 10-3-1115 and 10-3-1116

Colo. Rev. Stat. §§ 10-3-1115, -1116

Holding

An insurer may not unreasonably delay or deny payment of a covered benefit. A first-party claimant whose benefits were unreasonably delayed or denied is entitled to recover two times the covered benefit, plus reasonable attorney fees and court costs.

Why it matters to you

This is one of the most powerful policyholder statutes in the country. Even without common-law bad faith, an unreasonable delay can trigger double damages plus fees.

Statutory + Common-Law Bad Faith2011

Kisselman v. American Family Mutual Insurance Co.

292 P.3d 964 (Colo. App. 2011)

Holding

Confirmed that the statutory claim under §§ 10-3-1115/1116 is separate from — and can be pursued alongside — a common-law bad-faith claim, with independent standards and remedies.

Why it matters to you

In Colorado, both theories should typically be pled together. They have different proof burdens and different remedies.

Reasonableness Standard2004

American Family Mutual Insurance Co. v. Allen

102 P.3d 333 (Colo. 2004)

Holding

The reasonableness of an insurer's conduct is judged by industry standards — expert testimony from qualified claims professionals is often required to establish what a reasonable insurer would have done.

Why it matters to you

A licensed public adjuster's documentation and industry-standard estimate are often the foundation the case is built on.

Claims Handling StatuteStatute

Colorado Unfair Claims — Deceptive Practices Act

Colo. Rev. Stat. § 10-3-1104(1)(h)

Holding

Enumerates unfair claim settlement practices — including misrepresenting policy provisions, failing to acknowledge communications promptly, and failing to adopt reasonable standards for prompt investigation.

Why it matters to you

Track every deadline the carrier misses and every representation they make about your policy. These are the building blocks of a §§ 1115/1116 case.

Disclaimer: The summaries above are provided for general educational purposes only and are not legal advice. Case law evolves and application depends on the specific facts of your claim. For legal advice, consult a licensed attorney in the relevant state. Good Faith Claims is a licensed public adjusting firm and does not practice law.