Alternative Dispute Resolution in Insurance Disputes: Interplay between Mediation and Florida Appraisal Process

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

When an insured disputes the amount of loss with a Florida insurance company after a plumbing problem, fire, vandalism or other peril, there are a number of alternate dispute resolution options that may be undertaken prior to a lawsuit.  These ADR options include the Florida insurance appraisal process and mediation.  These remedies differ substantially though failure to comply with the statutory requirement of one can impact a party’s rights under the other ADR process.  

Although not every Florida property insurance policy includes an appraisal clause, many policies allow either party to invoke the appraisal process rights prior to a breach of contract lawsuit.  Once a disagreement over the amount of loss has arisen, either party can demand that the amount of the loss be determined by appraisal.  Each party will have a fixed number of days to inform the other side of the identity of their appraiser.  The insurance company appraiser and policyholder appraiser will jointly select an impartial referee/umpire, if they cannot agree on the amount of the loss.  If the appraisers cannot agree on the umpire, this issue may be submitted to a court, which will make the selection.  If the appraisers cannot agree on the value of the loss, the loss generally will be set based on agreement between the umpire and either appraiser.  Again, it is important to keep in mind that this overview of the appraisal process may vary depending on the terms of the policy.

Sometimes insurance companies fail to comply with the statutory requirement that they notify an insured of mediation rights.  This failure to provide notice can prejudice the policyholder because mediation can be faster and less expensive than the Florida insurance claims appraisal process.  Further, mediation is not binding on the parties, so an insured who is dissatisfied with the outcome of mediation can immediately proceed to file a lawsuit.  The procedures and requirements for insurance dispute mediation in Florida are set forth in Florida Statute § 627.7015.  Although the mediation process might not result in a resolution of a property damage insurance dispute, the information obtained can be valuable during a subsequent appraisal process or lawsuit.

Because the mediation process has distinct benefits over the appraisal process for a policyholder, the insurance company is required to notify an insured of the right to mediation under Florida Statutes 627.7915(7).  If the insurance carrier fails to provide statutory notice to the insured, the insurer may waive the right to insist the insured participate in a contractual insurance appraisal process prior to filing a breach of contract lawsuit.  While Admin. R. 69J-166.031(4)(a)(1) requires this notice to be provided within five days, the Third District has ruled that failure to comply with this administrative deadline does not result in a forfeiture of an insurance company’s right to invoke the Florida insurance appraisal process.  See Subirats v. Fidelity Nat. Property, 106 So.3d 997 (Fla. 3d DCA 2013). However, if the insurance company does not provide notice at all to a policyholder, the insured may file a lawsuit without participating in a contractual appraisal process.

If you have other questions about mediation, the appraisal process or lawsuits when embroiled in a dispute in your insurance company, we invite you to contact us to learn about your rights and remedies. 

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at jp@yourattorneys.com.

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