Appraisal coverage language is altering, and extra case legislation is being developed at a sooner 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 quite 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 methodology 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’ll request the American Arbitration Affiliation (AAA) to pick out an umpire at:
American Arbitration Affiliation
Case Submitting Providers
Attn: Allstate Texas Appraisal
1101 Laurel Oak Street Ste 100
Voorhees, New Jersey 08043
Electronic 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 situated to pick out 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.
It is a new appraisal course of wherein I’ve by no means participated or have data. On condition that Allstate has written it, my concern is that Allstate is making an attempt to stack the deck by having an American Arbitration Affiliation (AAA) umpire chosen quite than events deciding on one by an area decide. However that could be a private concern based mostly upon expertise with Allstate and never based mostly upon any present data of how Allstate set this up with the AAA. I’d admire suggestions from these with higher data 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 harm claimed towards Allstate for long-term water/leak harm. Plaintiff’s Movement ignores the important thing coverage requirement that the events should ‘fail to agree on the quantity of loss’ earlier than both social gathering can invoke appraisal.
The impact of an appraisal provision is to estop one social gathering 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 harm claims evidencing repairs to the property earlier than additional pursuing appraisal for the present water harm declare.
The one data Allstate has at this level is that Plaintiff reported a water harm 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 executed, 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 subject subpoenas for this data 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 Could 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 harm, however that the pipes had 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 had 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 Courtroom 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 line with Defendant, nevertheless, cooperation with the insurer, too, is a situation precedent….
Plaintiff’s movement fails to offer any justification or rationalization for her failure to conform along with her contractual obligation that operates as a situation precedent to the appraisal provision she is looking for to implement. Plaintiff’s Movement to Compel Appraisal and [for] Abatement is DENIED with out prejudice and this swimsuit is ABATED till Plaintiff offers 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 just isn’t applicable if the policyholder has not complied with affordable and well timed requests for data and paperwork by the insurance coverage firm. Allstate’s ready counsel from Thompson Coe laid out numerous info and dates concerning the related want for the requested data and the policyholder’s full failure to offer any data earlier than demanding appraisal.
StreamSong is a brand new resort in west central Florida with an incredible golf course. I hope to see you there so we will 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 hearken to reply.”
—Stephen R. Covey
1 Roland v. Allstate Automobile & Prop. Ins. Co., No. 4:24-cv-01710 (S.D. Tex. Jan. 31, 2025).
