Case Law Wednesdays – What is Appraisal?

When reviewing an insurance policy, you might come across an appraisal clause that usually states that appraisal is mandatory when properly demanded by the insurance company or the insured after property damage. Appraisal is a method of determining the amount the insurance company should provide for loss to your property. This appraisal clause can be raised by the insurance company or the insured.

After appraisal is demanded, each side must choose an independent appraiser. The two appraisers will then set the amount that they believe the insurance company should pay for the loss. This determination will be binding on both the insurer, the insurance company, and the insured.

In Safepoint Ins. Co. v. Gomez [1], the insured sued Safepoint after his property sustained damages due to an overflowing toilet. Safepoint investigated the loss and sent payment to the insured for the damages. However, the insured demanded additional payment because the payment was not enough to cover the loss. Safepoint then sent a letter invoking appraisal for the claim and the insured agreed.

The appraisal clause in the insured’s policy stated that if the impartial appraisers did not agree, they would submit their differences to an umpire. Thus, when the parties could not agree, an umpire was selected by the appraisers. Although the appraisal process was occurring, Safepoint requested a variety of documents from the insured, stating that it was the insured’s post loss obligation to provide these documents.

The Court stated that when an insurance company invokes appraisal, it waives their post loss obligations. Therefore, the insured does not have to comply with the request to satisfy post loss obligations after appraisal has begun because appraisal exists to determine the amount of the loss.

If you would like to discuss demanding appraisal or your post loss obligations, schedule a consultation with the experienced attorneys at Alvarez Law Group today. Call us at (786) 620-2820 or email to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. *

[1] Safepoint Ins. Co. v. Eduardo Gomez, No. 3D18-1366 (Fla. 3d DCA Jan. 16, 2019)

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