When Can A Policyholder Demand An Appraisal?
In Florida insurance law, an appraisal provides a means of resolving a dispute between the insurer and the policyholder regarding the amount of a covered loss. Appraisal is not meant to resolve whether a claim is insurable to begin with. Rather, it provides a way to arbitrate the question of how much the insurer owes to the policyholder.
Florida Court Rules Appraisal “Premature” Since Condo Association Failed to Document Its Claims
The key to appraisal is that it requires a genuine disagreement between the parties. This might seem obvious, but there have been a number of Florida cases where courts have found that appraisal is “premature” as the parties have not engaged in a “meaningful exchange of information” to demonstrate that a dispute exists.
Just recently, the Florida Third District Court of Appeals addressed this subject. In Certain Underwriters at Lloyd’s, et al. v. Lago Grande 5-D Condominium Association, Inc., a condominium association filed a claim with its insurer for damages sustained to the association’s buildings during Hurricane Irma in September 2017. The insurer acknowledged coverage for a portion of the claim and paid the association approximately $137,000.
Several months later, the association sued the insurer for alleged underpayment. The association also moved to compel appraisal, as required by the terms of the insurance policy. A judge granted the appraisal motion, prompting the insurer’s appeal.
The Third District sided with the insurer, agreeing that appraisal was premature. The appellate court noted the association had been “silent” following the initial partial payment of its claim. The association simply waited 10 months and then filed a lawsuit. At no point, however, did the association make any attempt to present its own estimates of the hurricane damage or the costs of making repairs to its property. Indeed, even after filing its lawsuit, the association failed to present any such evidence to the trial judge.
As the Third District explained, appraisal is only triggered under Florida law after there has been a “meaningful exchange sufficient to establish a disagreement regarding the value of property or the amount of the loss.” The association’s decision to remain silent for months after receiving the insurer’s payment did not, in and of itself, establish a “genuine disagreement” existed. Put another way, a policyholder cannot simply complain the insurer did not pay them enough. The policyholder must show its work and actually present proof establishing what they think they are owed. As such, the association here was not entitled to demand an appraisal at this time.
Speak with a Florida Insurance Lawyer Today
Insurance policies are legal contracts that impose duties and responsibilities on both parties. So if you are involved in a potential insurance dispute, it is important that you understand these duties and comply with all of your legal obligations. Otherwise, you might find yourself in trouble should litigation arise.