Insurance Law

Appraisal Award Binding – Payment of Appraisal Award Satisfies Policy Promise to Indemnify

In an opinion expressing the brevity required of a decision on an issue of insurance law that is patently obvious, the Missouri Court of Appeal decided in James-Miller v. American Family Mutual Insurance, — S.W.3d —-, 2015 Mo. App. LEXIS 609 (Mo.App. E.D., 6/9/2015), [enhanced version available to subscribers], that an appraisal award is binding on the parties to a first party property insurance policy.

Appellant Lisa James–Miller (“James–Miller”) appealed from the judgment of the trial court entered in favor of Respondent American Family Mutual Insurance Company (“American Family”) on her petition for insurance coverage.

Following a bench trial, the trial court found that any loss sustained by James–Miller was properly determined by the appraisal process set forth in James-Miller’s American Family homeowner’s insurance policy. The trial court additionally held that even if the appraisal process was not binding, James–Miller failed to prove that American Family failed to pay any amounts due under her policy.

On appeal, James–Miller argues that the trial court erred in: (1) finding that the appraisal process was binding; (2) refusing to impose a discovery sanction precluding Chris Powers, American Family’s designated appraiser, from testifying at trial; and (3) finding in favor of American Family because the decision is against the weight of the evidence.

The appellate court concluded that no error of law appears and that an extended opinion reciting the detailed facts and restating the principles of law applicable to this case would serve no jurisprudential purpose.


Appraisal has been a condition of first party property policies for more than a century. They were created as a device to allow resolution of disputes over the quantum of a loss when an insurer and the insured do not agree. The insured submitted to appraisal, an award was issued and the insured paid the award. As a result the insured had no case.

    By Barry Zalma, Attorney and Consultant

Reprinted with Permission from Zalma on Insurance, (c) 2015, Barry Zalma.

Barry Zalma, Esq., CFE, is a California attorney who limits his practice to consultation regarding insurance coverage, insurance claims handling, insurance bad faith and fraud and acting as a mediator or arbitrator on insurance disputes. Mr. Zalma serves as a consultant and expert almost equally for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. He recently published the e-books, "Zalma on Rescission in California - 2013"; "Random Thoughts on Insurance" containing posts from this blog; "Zalma on Insurance;" "Murder and Insurance Don't Mix;" “Heads I Win, Tails You Lose — 2011,” “Zalma on Diminution in Value Damages,” “Arson for Profit” and “Zalma on California Claims Regulations,” and others that are available at Zalma Books.

Mr. Zalma can be contacted at or, and you can access his free "Zalma on Insurance Fraud" newsletter at Zalma’s Insurance Fraud Letter.

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