Homeowner Wins Bid to Have Appraiser Assess Hail Damage

By Don R. Sampen, published, Chicago Daily Law Bulletin, June 17, 2025

The 2nd District Appellate Court recently held that while an appraisal under a property insurance policy is not typically used to resolve coverage issues, an appraisal may nonetheless include “some questions of causation” in determining the replacement cost of damaged property.

The case is Xiang Zhao v. State Farm Fire & Casualty Co., 2025 IL App (2d) 240723 (May 12).

Zhao’s residence in Vernon Hills was damaged by a hailstorm in 2023. She submitted a claim to her insurer, State Farm, which determined the value of the loss was $12,677. Zhao disagreed with the assessment and obtained a second estimate for $133,817, which included damage to a broader scope of items than found by State Farm.

Zhao then invoked her right to an appraisal under the policy. State Farm refused, taking the position that the differences in estimates had to do with a dispute over policy coverage, not the amount of loss.

The policy set up a procedure for the selection of appraisers and, in the event of a disagreement, the selection of a disinterested umpire. It further provided that an appraisal was available only to determine the amount of the loss of each item in dispute and would not address questions of coverage.

Zhao filed suit in 2024 to compel an appraisal, and State Farm responded with an affirmative defense stating that repair items she wished to include in the appraisal were not caused by wind or hail. Zhao then moved for judgment on the pleadings, which the trial court allowed, and State Farm took this appeal.

In an opinion by Justice Robert D. McLaren, the 2nd District affirmed. He began by noting the parties’ disagreement over what constitutes “coverage.” According to McLaren, Zhao’s entire house was “covered” by the policy, at least under the legal definition of “coverage.” While a dispute existed whether the damage to some of the items for which Zhao sought payment, such as windows, was caused by wind and hail, as opposed to normal wear and tear, such a dispute does not involve coverage. Rather, that is a question of the amount of loss.

McLaren relied in part on an unreported 5th District case — Shelter Mutual Insurance Co. v. Morrow, 2023 IL App (5th) 230249-U — which involved similar facts involving storm damage to a residence. The court there held that the dispute involved, not coverage, but the amount of the loss, and the amount of loss is a matter that falls under the appraisal clause of the policy. He found that case to be in accord with other Illinois decisions.

McLaren went on to find that Illinois law is clear that a court may compel compliance with an appraisal clause to resolve disputes relating to the “amount of loss.” And while questions of law and coverage are to be decided by a court, resolving some questions of causation will be necessarily included in the appraisal process.

State Farm also raised a late-notice issue going to Zhao’s notification of the storm damage. McLaren found that the appraisal should nonetheless proceed, and that that should be resolved if the case continued beyond the appraisal.

The 2nd District therefore affirmed the decision of the trial court.

Key Point

According to this court, some issues of causation under a property insurance policy involve the amount of loss, rather than coverage, and may be resolved by the appraisal process.