Case Law Wednesdays – When can an Insurance Company Invoke Appraisal?

Circumstances may arise during your insurance claim when your insurance company decides to invoke appraisal. Appraisal is typically mandatory when properly demanded by the insurance company or the insured after property damage. However, appraisal is not arbitration, instead it is a method for determining the amount the insurance company should provide for loss to your property. This means that an Insurance Company may not invoke appraisal if it has already denied coverage for the claim. Appraisal can be invoked by the insurance company to determine the total amount of the loss to the property, after the insurance company has determined that coverage for the loss exist.

In First Protective Insurance v. Jose and Stefania Colucciello [1], the insureds filed a claim with their insurance company, First Protective Insurance, after their property sustained damages due to Hurricane Irma. First Protective investigated the loss and paid the insureds over $100,000 for both interior damage and mold damage to the property. However, First Protective failed to pay for certain exterior damages to the home. The insureds thus filed suit against First Protective. In turn, First Protective asked the court to dismiss the lawsuit and compel appraisal.

The insureds argued that appraisal was not appropriate because First Protective had denied coverage for the exterior damage to the property. On the other hand, First Protective disagreed and argued that there was no dispute over the coverage that the Insurance Company was providing, instead it was a disagreement on how much should be paid for the loss, which could be determined with appraisal.

The court agreed with First Protective because the insureds submitted one claim with First Protective due to water intrusion from Hurricane Irma. Therefore, all the damage, including the exterior, fell into the one Hurricane Irma claim that they had filed. The court determined that the only issue left to resolve was the amount of loss because First Protective had already agreed that coverage existed for the property damage due to Hurricane Irma. Thus, the amount of loss could be determined through appraisal.

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] First Protective Insurance v. Jose and Stefania Colucciello, No. 5D19-31 (Fla. 5th DCA July 12, 2019)

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