The appraisal process provides an alternative to litigation that can be requested by either party under a homeowners insurance policy depending on the circumstances. The appraisal process cannot be used to determine whether a claim is covered, but it can be used to evaluate the amount of the insured’s loss.
The recent Florida 5th District Court of Appeals case of FIGA v. Branco, 2014 WL 4638208 (Fla. 5th DCA September 19, 2014), addresses three separate issues regarding the appraisal process. The first of these issues involves whether filing a lawsuit for breach of contract constitutes a waiver of the appraisal process. The original insurer hired an engineering firm to conduct a limited structural assessment. The original insurer denied the claim based on the allegation that the loss was not caused by sinkhole activity. The policyholders filed a lawsuit against the insurance carrier for breach of contract. FIGA took the place of the initial insurance company when it went into receivership. The court rejected the initial defense asserted by the insurance carrier which alleged that the right to appraisal was waived because the insured initiated litigation.
The second defense asserted by the insurer was that the request for appraisal was premature because the issue of coverage had not been resolved. The insurer contended that the appraisal process could not be used to determine the appropriate method of repairing the sinkhole damage. The insurance carrier contended that the scope of repair was not an appropriate issue for appraisal because it constituted a coverage question. The court disagreed and ruled that it was not improper for the appraisal process to address the scope of repair. The court determined that an evaluation of the scope of coverage was part and parcel in evaluating the cost of loss.
The final defense asserted by the insurance carrier was that the request for appraisal should not be granted because the insured failed to select a neutral appraiser. The policy specified that part of the appraisal process would include each party selecting a “competent and disinterested appraiser”. The insured selected a partner in the law firm that was retained to represent the policyholder in the insurance claims dispute. The 5th DCA reversed the lower court and ruled that the policyholder failed to select a neutral appraiser. The court relied on the fiduciary duty inherent in the attorney-client relationship in finding that the selection of another attorney within the law firm representing the policyholder did not constitute a “disinterested” appraiser.
This case demonstrates a few of the challenges an insurance company might raise when objecting to the appraisal process. If you have questions about Miami-Dade homeowners insurance claims, you are welcome to contact my Florida insurance claims dispute law firm. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.