Lloyd’s underwriters get back into a Texas hail damage suit after being blocked from enforcing appraisal and accepting liability for their adjusters.
In a win that will matter to insurers managing property claims litigation in Texas, the Thirteenth Court of Appeals ruled on July 11, 2025, that Certain Underwriters at Lloyd’s, London had the right to intervene in a lawsuit brought by two of its insureds. The court said the trial court should not have excluded the insurer from a dispute where it had both accepted responsibility for its agents and sought to enforce the policy’s appraisal process.
The case stems from a hailstorm that damaged the home of Jesus and Cynthia Santoyo. They filed a property damage claim under their policy, but Lloyd’s ultimately found the damage minimal and determined it fell below the policy’s deductible. The Santoyos disagreed and hired counsel. On March 19, 2024, they sent a pre-suit demand to Lloyd’s.
Lloyd’s responded by declaring an impasse on the disputed amount of loss on March 27, 2024, and invoked the policy’s appraisal clause. Then, on May 8, 2024, Lloyd’s formally notified the Santoyos that it was electing to assume liability for its agents – American Claims Management, Inc. (ACM) and Judah Hale Hays – under section 542A.006 of the Texas Insurance Code. That statute lets an insurer take full responsibility for its agents’ actions before suit is filed.
Later that same day, the Santoyos sued ACM and Hays, accusing them of mishandling their claim and violating Texas law. They did not sue Lloyd’s, and in an amended petition, clarified that they were pursuing only tort claims – not breach of contract or any claim for policy benefits.
Lloyd’s filed a plea in intervention on July 8, 2024, saying it had a direct interest in the case. It also moved to compel appraisal and to pause the litigation. The trial court struck the insurer’s intervention and denied the appraisal motion on Aug. 5, 2024. After the court of appeals first ruled that Lloyd’s had been denied proper notice and a hearing, the trial court reconsidered and again denied the intervention in January 2025.
This time, the appellate court sided with Lloyd’s. It found the insurer had a legitimate stake in the case. Because Lloyd’s had accepted liability for ACM and Hays, any judgment against them could land directly on the insurer. And since the right to demand appraisal belonged to Lloyd’s – not the adjusters – its presence was necessary for that process to proceed.
Even though the Santoyos said they weren’t asking for policy payouts, their claims were tied to how the damage was evaluated and the claim handled – issues closely tied to the policy and the insurer’s role. The court concluded that Lloyd’s should be allowed to intervene, and doing so wouldn’t overly complicate the case.
The trial court was ordered to reverse its denial and let Lloyd’s in. If it fails to do so, the appellate court will issue a writ.
For insurers working Texas property claims, the takeaway is clear: when you've accepted responsibility under section 542A.006 and your policy rights - like appraisal - are directly involved, courts can’t automatically exclude you. You have a legal stake and a right to participate.
