Appraisal coverage language is altering, and extra case legislation is being developed at a quicker fee than ever. These points and classes will likely be analyzed with the Insurance coverage Appraisal and Umpire Affiliation (IAUA), which will likely be internet hosting an academic and certification convention on February 19-20 on the StreamSong Golf Resort. I will likely be debating insurance coverage protection lawyer 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 choose to nominate an umpire when the events can’t 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 will likely 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 Companies
Attn: Allstate Texas Appraisal
1101 Laurel Oak Street Ste 100
Voorhees, New Jersey 08043
Electronic mail: casefiling@adr.org
(with subject material as “Allstate Texas Appraisal”)b) Provided that AAA advises you and us in writing that it can’t appoint an umpire might we then collectively request a choose of a district court docket within the judicial district the place the residence premises is situated to pick an umpire. A choose of a district court docket doesn’t embrace a commissioner or a choose of a county court docket at legislation, or a justice court docket, a municipal court docket, a probate court docket, or of a commissioner’s court docket.
It is a new appraisal course of through which 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 choose. 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 recognize suggestions from these with better 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 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 problem of damages in a go well with on the insurance coverage contract, leaving solely the query of legal responsibility for the court docket.
Allstate particularly requested Plaintiff to supply 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 data 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 executed, and the way a lot mentioned repairs value, made by Plaintiff on the identical deal with. As a result of Plaintiff has failed to supply the requested documentation, Allstate intends to challenge subpoenas for this data from the insurance coverage firms listed within the chart above.
The court docket 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 injury, however that the pipes had been already fastened. 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 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 go well with as a result of ‘[c]ompletion of appraisal in accordance with Defendant’s coverage is a situation precedent to submitting go well with on the insurance coverage contract.’ In keeping with Defendant, nevertheless, cooperation with the insurer, too, is a situation precedent….
Plaintiff’s movement fails to supply 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 searching for to implement. Plaintiff’s Movement to Compel Appraisal and [for] Abatement is DENIED with out prejudice and this go well with 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 affordable and well timed requests for data and paperwork by the insurance coverage firm. Allstate’s in a position counsel from Thompson Coe laid out numerous details and dates relating to the related want for the requested data and the policyholder’s full failure to supply 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 are able to be taught extra concerning the ever-changing panorama of appraisal.
Thought For The Day
“The most important communication drawback is we don’t hear 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).
