The Houston [14th] Court of Appeals has held that an insurer that pays an appraisal award under a homeowner’s policy cannot also be liable for damages for extracontractual claims, absent an independent injury.
Mary Brimer v. State Farm Lloyds (No. 14-24-00239-CV; February 19, 2026) arose from a dispute between a homeowner and her insured over storm damage to her roof. After Plaintiff submitted a claim, the insurer inspected the property and responded that the covered portion of the claim did not meet her deductible. Plaintiff requested reinspection, which found no additional covered damage. The insurer closed the claim. Nearly 18 months later, Plaintiff invoked an appraisal under the policy and submitted a $22,926.61 estimate from a new roofing contractor. State Farm reviewed the estimate but disagreed that the damage had been done by a hailstorm. Plaintiff re-invoked appraisal and the parties designated their respective appraisers. The umpire and one appraiser issued an appraisal award of $23,907.17 for the replacement value of Plaintiff’s roof and interior damage.
The insurer, however, stuck to its guns on the coverage issue and again determined that Plaintiff’s loss didn’t exceed her deductible. After unsuccessfully demanding payment of the award, Plaintiff filed suit. Defendant, while still denying coverage, subsequently paid Plaintiff the appraisal award less her deductible. It also paid an estimated prompt-payment penalty of $4,954.82, with the caveat that the payment did not constitute an admission of a violation of the Texas Prompt Payment of Claims Act. Defendant moved for summary judgment on the basis that it had issued payment for the appraisal award and paid any potential interest. The trial court granted the motion. Plaintiff appealed.
In an opinion by Justice Hart, the court of appeals affirmed. Plaintiff asserted that Defendant’s untimely payment of the appraisal award did not bar her causes of action for breach of contract, common law bad faith, and statutory (Ch. 541) bad faith claims. Defendant countered that Plaintiff’s claims were barred under Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). Plaintiff responded that Ortiz didn’t apply because Defendant’s payment was untimely. The court, however, “[did] not see a limitation in Ortiz specifying that its holding is premised on whether the insurer’s payment of an appraisal award is timely. Courts have applied Ortiz even when the insurer pays the pre-suit appraisal award months after suit has been filed” (citations omitted). The trial court thus properly granted summary judgment to Defendant on Plaintiff’s breach-of-contract claim.
As to Plaintiff’s extrcontractual claims, the court held that the trial court acted properly as well. “Under Texas law,” the court observed, an insured cannot prevail on her extracontractual claims unless she can satisfy either the entitlement-to-benefits rule of the ‘independent-injury rule’” (citations omitted). Plaintiff failed to present evidence of an independent injury but argued that the entitlement-to-benefits rule allowed her to recover extracontractual damages despite Defendant’s payment of the award. Looking to In re. Am. Risk Ins. No. 01-25-00575-CV, 2025 WL 3275144 (Tex. App.—Houston [1st Dist.] Nov. 25, 2025, orig. proceeding), the court held recovery of both benefits under the policy and damages constituted an impermissible double recovery. “When an insured, like [Plaintiff],” the court concluded, “ has been paid all of the policy benefits to which she [is] entitled, she cannot proceed on her extracontractual claims under the entitlement-to-benefit rule.” The court affirmed the judgment of the trial court.
