What Happens When an Appraiser Fails to Provide a Position?

by Justin Petty, Petty Details

In the last several issues, the hot topic has clearly been appraisal. That’s not by accident.

With the recent changes to Appraisal Clause law – thanks in large part to the efforts of my predecessor and the original expert, Robert McDorman – it’s been a natural time to focus on how appraisal is supposed to work and how those changes may impact the process going forward.

With all of that attention on appraisal, we’ve spent a lot of time talking about structure, timelines and language. But one issue that continues to come up in real-world claims is much more practical, and it’s the subject of the question for this month.

Before getting into that, it’s worth pointing out that both shops and vehicle owners can help avoid some of these issues on the front end. When the Right to Appraisal is invoked, it should be done clearly and completely. The elements of the loss being disputed – whether that’s towing, storage, repair methodology or valuation – should be identified as early as possible. The more clearly the scope is defined at the time of invocation, the harder it is for either appraiser to later claim something “isn’t part of appraisal.”

That doesn’t prevent every problem – but it does eliminate a lot of the ambiguity that leads to situations like the one that spawned this month’s question:

Question – Dallas/Fort Worth Area:

One of our customers asked us about a problem they’re having in a total loss appraisal. There were initial disagreements about whether the vehicle was repairable, which caused delays, and now there are several thousand dollars in storage and related charges at the repair facility.

The insurance company’s appraiser is refusing to address those charges at all, saying they are “not part of appraisal,” and won’t provide a position. Can the umpire just decide it? And what are they supposed to do when the other appraiser won’t participate?

Let’s start with the truth – this isn’t a disagreement.

What’s being described here is a refusal to perform the appraisal function. That distinction matters, because the entire appraisal process depends on two appraisers evaluating the same loss and submitting their differences to an umpire. If one appraiser refuses to address an item like storage charges, then there is no disagreement on that issue. There is only one appraiser doing their job.

That’s not an appraisal – it’s a breakdown in the process.

This is where a lot of people misunderstand the role of the umpire. The umpire is not there to step in and “figure it out” when one side doesn’t participate. Their authority is limited. In Fisch v. Transcontinental, the court made it clear that an umpire only has authority when there is a defined disagreement that has been submitted for resolution. When that didn’t happen, the award was invalid because the umpire had no authority to act.

So, the idea that an umpire can simply decide an issue when one appraiser refuses to engage is incorrect. If there’s no competing position, there’s nothing for the umpire to resolve.

Now, to be fair, most of these situations start as scope arguments. You’ll hear things like “storage isn’t part of appraisal” or “towing isn’t part of appraisal.” This article isn’t intended to fully define the scope of appraisal – that’s a much larger discussion – but for purposes of this issue, one principle applies: if an item is being claimed as part of the loss and one appraiser evaluates it, the other appraiser doesn’t get to ignore it. They can agree, disagree or provide their own valuation. Refusing to address it is not a position – it’s non-participation.

From a practical standpoint, the participating appraiser needs to handle this correctly:

1. Lock the issue down early. Identify the specific item (such as storage charges), and request the other appraiser’s position in writing.

2. Define your position clearly. Complete your evaluation – your storage value is $X – and clearly note that the opposing appraiser has refused to provide a value.

3. Document the refusal. This becomes critical later, as it establishes that the process failed due to non-participation, not disagreement.

4. Do not force it to the umpire. Without a defined difference, there is no valid submission. Pushing it forward risks creating an award that won’t hold up.

5. Recognize the breakdown. At some point, you have to call it what it is – the appraisal process has failed due to one side’s refusal to participate.

I had attorney Mike Shoemaker take a deeper look at this issue, and his analysis adds an important layer that appraisers and shops need to understand.

As he explained it to me:

“When an appraiser refuses to address part of the loss, so long as the ‘loss’ is covered by the insurance policy’s appraisal section, that’s not a scope dispute – it’s a failure to comply with the appraisal section. Appraisal requires participation in determining the amount of loss. Ignoring part of the claim prevents the process from functioning the way it was intended. From a legal standpoint, that kind of non-participation can expose the non-participating party to breach of contract and Texas Insurance Code sanctions. The problem is, for smaller disputes, there isn’t always an efficient way for the insured to enforce that obligation, which is why these situations tend to linger.”

Shoemaker also pointed out something that doesn’t get talked about enough: the gap between theory and reality. While the law provides remedies, not every claim is large enough to justify hiring an attorney. That leaves a portion of policyholders effectively stuck when the process breaks down. This problem can be addressed by the Texas legislature and the Texas Department of Insurance. Self-help language can be written to solve the problem.

That ties back into where we are today.

We’ve recently seen meaningful progress in this area with new Appraisal Clause legislation. That didn’t happen by accident. It was the result of a lot of work (thanks again to Robert McDorman). Part of the intent behind those changes was to bring more structure and clarity to the process.

As those changes begin to take hold, we may see fewer situations like this – or we may see new variations of the same issue. It’s simply too early to tell. What we do know is that the core principles of appraisal haven’t changed, and non-participation is still a problem regardless of how the clause is written.

At the end of the day, the responsibility doesn’t fall on the umpire to fix a broken process, and it doesn’t fall on the participating appraiser to carry both sides. It falls on the party who appointed the appraiser. If a carrier’s appraiser refuses to participate, that is a failure by the carrier to comply with the Appraisal Clause. And that shifts the issue out of appraisal and into legal enforcement, whether that’s breach of contract, bad faith or other remedies available under Texas law.

What Does the Vehicle Owner Do If No Attorney Will Take the Case?

This is the part no one likes to talk about – but it’s real.

A lot of these claims are not large enough to attract an attorney, even when the issue is legitimate. Storage, towing and similar charges can add up quickly, but they don’t always justify the cost of litigation. That leaves the vehicle owner dealing with a process that has already failed.

So, what can they do?

•  File a complaint with the Texas Department of Insurance (TDI). If the carrier is not complying with the Appraisal Clause, that can raise regulatory concerns.

•  Submit a formal written demand to the carrier. Clearly outline that the appraisal failed due to non-participation and request resolution.

•  Consider small claims (Justice Court). For disputes within jurisdictional limits, this is often the most practical path and does not require an attorney.

•  Continue documenting everything. If the matter escalates later, that record becomes critical.

It’s not a perfect solution – but it is a path forward.

And in many cases, simply demonstrating that the issue is being documented and elevated can change how the carrier responds.

The takeaway here is simple. Refusing to address part of the loss is not a valid appraisal position. An umpire cannot decide issues that were never properly submitted. Silence is not a disagreement – it’s non-participation. And when that happens, you don’t have an appraisal problem anymore; you have a compliance problem.

Appraisal works when both appraisers actually participate. When one side refuses, the process doesn’t stall because of disagreement – it stalls because someone chose not to engage.

Of course, the above comments are general in nature and are not intended to substitute for consultation with an attorney. TXA

Want more? Check out the April 2026 issue of Texas Automotive!