Should A Court Or An Umpire Decide What Caused A Loss in Appraisal? Depends On If Partial Coverage Was Granted.
PEOPLE’S TRUST INSURANCE COMPANY, Appellant, v. ANDREA TRACEY and JAMES TRACEY, Appellees.
First, lets explore different appraisal clause language by different carriers. Most carriers have moved toward language requiring both the insurer and the insured agree to go to appraisal. Other appraisal clauses that have common language that states,
“Appraisal. If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, disinterested appraiser. Each shall notify the other of the appraiser’s identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraisal and the compensation of the umpire shall be paid equally by you and us.
When properly invoked participation in the appraisal process is mandatory and the amount of loss determined by the panel is binding. This is also true in most cases when both parties properly agree to the appraisal process.
PEOPLE’S TRUST INSURANCE COMPANY, Appellant, v. ANDREA TRACEY and JAMES TRACEY, Appellees.
In this case Mr. and Mrs. Tracey submitted an insurance claim alleging that a tornado was the cause of loss to their roof and interior damages.
This case prior to the courts involvement, partial coverage was granted by the carrier providing language to the insured after their investigation stating,
” THERE IS COVERAGE UNDER THE POLICY FOR THIS LOSS AS A WHOLE; HOWEVER, THE SCOPE OF DAMAGES COVERED BY YOUR POLICY INCLUDES ONLY THE INTERIOR DAMAGES BUT DOES NOT INCLUDE YOUR ROOF.
We have completed our investigation of your claim, and based upon what we were provided and what you reported, and additionally, based upon our claim investigation, there is generally coverage for your loss as a whole. However, and more specifically, our investigation revealed that the roof leak you reported stemmed from age-related wear and tear and deterioration; general mechanical breakdown or latent defect; and/or faulty, inadequate or defective maintenance of the roofing system – none of which are covered causes of loss. Therefore, in our opinion, the scope of covered damages would not include your roofing system because those damages were caused by uncovered or excluded causes, but would provide coverage for resulting ensuing damages to the interior of your home. Therefore, we believe our obligation is to repair only those damages to the interior of the home. If you are not in agreement with that assessment, the question of whether the scope of repairs should include the roof, can be resolved in appraisal.”
The insured successfully argued that the cause of the damage to the roof was a question of coverage and, therefore, solely within the purview of the court. They did not want their claim to be decided in Appraisal that would be binding.
The trial court agreed with the insureds and denied People’s Trust motion to compel appraisal, without prejudice. The appellate court, however, reversed and remanded the case back to the trial court to compel the appraisal.
What does this mean to an insured with many possible circumstances prior to going to appraisal? If you are considering going to appraisal or a carrier has invoked appraisal you should immediately discuss this with a Licensed Public Adjuster or Legal Counsel. Contact Us! Experienced Public Adjusters
If you want more information on this case please use the information below to research this courts non-final order from the Circuit Court for the Fifteenth Judicial Court.
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
PEOPLE’S TRUST INSURANCE COMPANY,
Appellant,
v.
ANDREA TRACEY and JAMES TRACEY,
Appellees.
No. 4D17-3945
[July 25, 2018]
Appeal of non-final order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Jeffrey Dana Gillen, Judge; L.T. Case
No. 502017CA005429XXXXMB.
Raoul G. Cantero, Ryan A. Ulloa and Iesha S. Nunes of White & Case
LLP, Miami, and Jonathan Sabghir and Brett R. Frankel, Deerfield Beach,
for appellant.
Juan Ramirez Jr., of ADR Miami LLC, Coral Gables and Albe
Not final until disposition of timely filed motion for rehearing.