Appraisal coverage language is altering, and extra case legislation is being developed at a quicker fee than ever. These points and classes shall be analyzed with the Insurance coverage Appraisal and Umpire Affiliation (IAUA), which shall be internet hosting an academic and certification convention on February 19-20 on the StreamSong Golf Resort. I shall be debating insurance coverage protection legal professional Illon Kantro from Berk, Service provider & Sims slightly than my frequent and formidable nemesis Steve Badger.
An Order issued final week denying a Movement to Compel Appraisal caught my consideration. 1 The usual insurance coverage appraisal language requires a decide to nominate an umpire when the events can not agree. Most IAUA conferences warn about events racing to the courthouse and unilaterally deciding on an umpire. The Allstate coverage language had the next language, which is a comparatively new technique of choosing an umpire if the appraisers disagree:
The appraisers will choose a reliable and neutral umpire. If the appraisers are unable to agree upon an umpire then an umpire shall be appointed within the following method:
a) You or we are going to request the American Arbitration Affiliation (AAA) to pick an umpire at:
American Arbitration Affiliation
Case Submitting Providers
Attn: Allstate Texas Appraisal
1101 Laurel Oak Street Ste 100
Voorhees, New Jersey 08043
E mail: [email protected]
(with material as “Allstate Texas Appraisal”)b) Provided that AAA advises you and us in writing that it can not appoint an umpire could we then collectively request a decide of a district courtroom within the judicial district the place the residence premises is positioned to pick an umpire. A decide of a district courtroom doesn’t embrace a commissioner or a decide of a county courtroom at legislation, or a justice courtroom, a municipal courtroom, a probate courtroom, or of a commissioner’s courtroom.
This can be a new appraisal course of during which I’ve by no means participated or have information. On condition that Allstate has written it, my concern is that Allstate is attempting to stack the deck by having an American Arbitration Affiliation (AAA) umpire chosen slightly than events deciding on one by a neighborhood decide. However that may be a private concern primarily based upon expertise with Allstate and never primarily based upon any present information of how Allstate set this up with the AAA. I might admire suggestions from these with better information or expertise. I even invite feedback from Allstate about their causes and motives for utilizing the AAA.
Allstate argued the next factors, amongst many, why the declare dispute shouldn’t be despatched to appraisal:
By demanding appraisal and submitting her Movement to Compel Appraisal and Abatement, Plaintiff is trying to keep away from addressing the overarching and severe protection points on this case, the seemingly duplicative injury claimed in opposition to Allstate for long-term water/leak injury. Plaintiff’s Movement ignores the important thing coverage requirement that the events should ‘fail to agree on the quantity of loss’ earlier than both occasion can invoke appraisal.
The impact of an appraisal provision is to estop one occasion from contesting the difficulty of damages in a swimsuit on the insurance coverage contract, leaving solely the query of legal responsibility for the courtroom.
Allstate particularly requested Plaintiff to offer paperwork from the prior seven (7) water injury claims evidencing repairs to the property earlier than additional pursuing appraisal for the present water injury declare.
The one info Allstate has at this level is that Plaintiff reported a water injury declare for the seventh time inside the previous 4 years, that has since been repaired, with none assist as to who repaired it, when it was accomplished, and the way a lot mentioned repairs value, made by Plaintiff on the identical handle. As a result of Plaintiff has failed to offer the requested documentation, Allstate intends to difficulty subpoenas for this info from the insurance coverage corporations listed within the chart above.
The courtroom agreed with Allstate, discovering that the matter was not ripe for appraisal:
Plaintiff filed a declare on Might 23, 2023 for leaking/busted pipes at her property that was insured by Defendant. The declare alleged that 4 rooms within the property sustained water injury, however that the pipes have been already mounted. That very same day, Allstate acknowledged Plaintiff’s declare and requested a accomplished Proof of Loss assertion, estimates for alleged damages, and receipts for repairs already made. Over a number of months following the preliminary declare, the one actions Plaintiff took have been to file one other declare with a brand new loss date, and a letter of illustration. As of the date of this Order, the Court docket has not been made conscious that Plaintiff has ever responded to Defendant’s requests.
As a substitute, Plaintiff seeks to compel appraisal and abate the swimsuit as a result of ‘[c]ompletion of appraisal in accordance with Defendant’s coverage is a situation precedent to submitting swimsuit on the insurance coverage contract.’ In keeping with Defendant, nonetheless, cooperation with the insurer, too, is a situation precedent….
Plaintiff’s movement fails to offer any justification or clarification for her failure to conform together with her contractual obligation that operates as a situation precedent to the appraisal provision she is in search of to implement. Plaintiff’s Movement to Compel Appraisal and [for] Abatement is DENIED with out prejudice and this swimsuit is ABATED till Plaintiff supplies proof that she has complied with the Coverage’s necessities for the enforcement of the appraisal provision.
The sensible lesson from the ruling is that appraisal is just not acceptable if the policyholder has not complied with cheap and well timed requests for info and paperwork by the insurance coverage firm. Allstate’s ready counsel from Thompson Coe laid out varied info and dates concerning the related want for the requested info and the policyholder’s full failure to offer any info earlier than demanding appraisal.
StreamSong is a brand new resort in west central Florida with a tremendous golf course. I hope to see you there so we are able to be taught extra concerning the ever-changing panorama of appraisal.
Thought For The Day
“The most important communication downside is we don’t pay attention to grasp. We take heed to reply.”
—Stephen R. Covey
1 Roland v. Allstate Automobile & Prop. Ins. Co., No. 4:24-cv-01710 (S.D. Tex. Jan. 31, 2025).