Reported / Citable
Background
Larry and Kellie Hemingway claimed that hail and wind damaged their home in December 2023. Their insurer, American Economy Insurance Company, initially found no storm-related damage. After the Hemingways invoked appraisal in April 2025, an appraisal award set actual cash value at $32,753.77 and replacement cost value at $51,549.11.
American paid $25,753.77 after applying the policy’s $7,000 deductible, and paid statutory interest through December 3, 2025. The Hemingways sued American and Safeco Insurance, asserting contract and extra-contractual claims. They alleged that American failed to pay recoverable depreciation and paid the award too late.
The Court’s Holding
Judge David Hittner granted American’s summary-judgment motion in full and dismissed all claims. Safeco was dismissed because the summary-judgment record showed it was a trade name, not the insurer, and had no contractual relationship with the Hemingways.
The court held that American did not breach the policy. Recoverable depreciation was payable only after repairs or replacement, and the Hemingways offered no evidence that repairs or replacement had occurred. The policy required payment within five business days after American notified the insureds that it would pay; American gave notice and issued payment on December 3, 2025. The court also rejected the extra-contractual claims because the Hemingways established neither a right to additional policy benefits nor an injury independent of the alleged denial or underpayment of benefits.
Key Takeaways
- Under the policy, recoverable depreciation was not due until the insureds repaired or replaced the damaged property.
- An appraisal award determines the amount of loss, not necessarily whether or when the insurer must pay additional policy benefits.
- Without a breach of policy benefits or an independent injury, the insureds’ Texas extra-contractual claims could not proceed.
Why It Matters
The decision applies Texas appraisal and insurance-coverage principles to distinguish an appraisal valuation from an insurer’s contractual payment obligations. It also underscores that conclusory allegations of harm flowing from a claim denial do not establish the independent injury needed to sustain extra-contractual claims when policy benefits are not owed.