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Debate heats up over bill curbing enforceability of insurance appraisal clauses
Summary
HB2351 would treat post-enactment insurance appraisal/arbitration clauses as offers to arbitrate rather than mandatory, enforceable clauses; consumer advocates said the change corrects a drafting omission and protects policyholders, while insurers and arbitration proponents warned it could increase costs and reduce efficient dispute resolution.
The committee heard HB2351, a bill amending the Uniform Arbitration Act to treat arbitration or appraisal clauses in insurance contracts entered or renewed after July 1, 2025 as an offer—rather than an irrevocable, enforceable obligation. Adviser Jason Thompson framed the change as an exception to the general rule that arbitration agreements in records are enforceable.
Proponents included Joe Molina of the Kansas Bar Association, who said the bill restores language recommended by the Judicial Council and corrects a drafting omission; "we forgot to put it back," Molina said when describing the legislative history. Consumers who testified described long, expensive appraisal processes that produced awards insurers later refused to honor. Tamara Anwar recounted storm damage and an insurer offer of $7,081.13 that she said was far below needed repairs; she told the committee the appraisal route became protracted and costly and ultimately required litigation.
Consumer attorney Russ Hazelwood argued appraisal processes were written for insurers and can impose costs and unfair outcomes on policyholders. "It's heads I win, tails you lose," he said, citing neighboring states that disallow forced appraisal in insurance policies.
Opponents, including Zach Chaffee McClure representing property-casualty insurers, argued arbitration and appraisal reduce burdens on courts and can be fair and efficient; he said binding arbitration can produce enforceable awards and faster resolution in many disputes. Committee members questioned whether the bill’s language is sufficiently precise (for example, whether it applies to all categories of insurance) and asked for statutory definitions; proponents and others pointed to KSA references for contract definitions.
The committee received extensive written opponent and proponent testimony and had follow-up questions about the scope of "contract of insurance" definitions. The hearing was closed for the day with no committee vote taken.
