Does Appraisal Stop the Statute of Limitations Clock? Court Dismisses Policyholder’s Lawsuit as Time-Barred Despite Post-Appraisal Denial

A recent Texas decision serves as a warning to policyholders and public adjusters about relying on the appraisal process to revive insurance claims long after an initial denial. In Pool v. State Farm Lloyds, ¹ the court granted summary judgment in favor of State Farm, ruling that all of the policyholder’s claims were barred by the statute of limitations, despite a post-appraisal denial letter that the plaintiff argued should have restarted the clock.

The dispute arose from a homeowner’s claim for storm damage allegedly sustained on June 15, 2020. Plaintiff Randell Pool submitted a claim to State Farm in March 2021. Following an inspection, State Farm issued a denial letter on March 16, 2021, stating that no covered damage had been found. More than a year later, Pool invoked the policy’s appraisal provision, and the process ultimately resulted in an appraisal award issued on November 9, 2022. When State Farm reviewed the appraisal, it again declined payment in a letter dated December 12, 2022, asserting that the award included items not covered by the policy.

Pool filed suit on February 13, 2024, asserting claims for breach of contract, violations of the Texas Insurance Code, breach of the duty of good faith and fair dealing, and declaratory relief. He argued that the claims were timely because they accrued upon receipt of the December 12, 2022, denial, which followed the issuance of the appraisal award. Pool contended that this denial was based on new information and should be treated as a new accrual date for limitations purposes.

State Farm moved for summary judgment, arguing that all causes of action accrued on March 16, 2021, when it initially denied the claim, and therefore, the lawsuit was untimely. The court agreed.

The court emphasized that under Texas law, causes of action for breach of contract and related extracontractual claims accrue on the date an insurer denies a claim, not when it later reaffirms its position following appraisal. The court found that the March 2021 letter was an outright denial and that nothing in State Farm’s subsequent conduct, including participation in the appraisal process, amounted to a withdrawal or alteration of that denial.

The court rejected Pool’s argument that the December 2022 denial constituted a separate or new claim denial based on the appraisal findings. Instead, it concluded that the appraisal merely quantified loss and did not present new grounds for coverage. State Farm’s December letter, in the court’s view, was a reiteration of its original coverage decision. The court further explained that under Texas precedent, the appraisal process does not extend or toll the statute of limitations, even when the insurer voluntarily participates in it after an initial denial.

Policyholders and public adjusters must understand that appraisal does not necessarily delay or reset legal deadlines for filing suit. It depends on the specific state’s case law. Once a claim is denied in writing, the clock starts ticking, and the failure to file suit within the applicable limitations period can bar all claims in some states, even if appraisal later takes place.

While appraisal is a valuable contractual tool to resolve disputes over the amount of loss, it may not reopen the door to litigation. For policyholders and their representatives, this decision is a reminder to move swiftly after a denial, regardless of whether an appraisal demand is made later. Waiting too long, even with good reason, can mean losing the right to bring a claim entirely. Public adjusters should also be wary of practicing law when providing advice or explaining the implications of demanding appraisal.

This is not the first time I have raised this issue in Texas. In “When Does the Statute of Limitations Run After a Texas Appraisal?” I made the following warning:

Appraisals are a common alternative method to litigation for resolving property insurance disputes. Still, the time to file suit varies from state to state, even when an appraisal is invoked. Policyholders should be aware that even though an appraisal is invoked, some states still allow the time to bring suit to run despite the ongoing appraisal. Statutes of limitation when an appraisal is involved can be a complex and often overlooked aspect of a claim with disastrous results if the issue is not legally analyzed.

Thought For The Day 

“Your future is created by what you do today, not tomorrow.”
– Robert Kiyosaki

¹ Pool v. State Farm Lloyds, No. 6:24-cv-00154 (W.D. Tex. July 15, 2025). See also, Plaintiff’s Response to State Farm’s Motion for Summary Judgment, and Defendant’s Reply in Support of its Motion for Summary Judgment.