What is an appraisal provision?
Analogous to arbitration clauses, appraisal provisions have been consistently deemed valid methods of dispute resolution. The appraisal process is considered a less expensive and more efficient means of settling disputes than filing a lawsuit. Appraisal provisions in homeowner’s insurance policies have become standard practice in Florida. If you have a homeowner’s insurance policy, then the odds are you have one of these provisions buried somewhere in your contract. So what exactly is an appraisal provision? A common provision will typically say something like this:
If a dispute arises as to the value of the insured’s loss, then the insured and the insurer shall resolve that dispute (if either party invokes the appraisal provision) by electing two appraisers that will work together to determine the value of the loss. Both the insured and the insurer will have the right to elect one appraiser each, and if these two appraisers cannot agree upon the value of the loss, then the parties will select a neutral third party, known as an umpire, to provide a final decision on the value of the loss. If the parties cannot agree on an umpire, then the parties have the right to petition a court to select one for them.
An appraisal provision sets out the procedure that the insured and the insurer must follow in the event that they cannot agree on the value of the loss. A final decision by an umpire will typically not be disturbed by the courts and the umpire’s decision will be usually final.
What can be challenged in court?
Florida courts have made it clear that there are certain disputes that fall within the purview of the appraisal provision, and there are certain disputes that are reserved for the courts. Generally speaking, disputes can be broken down into one of two categories: value disputes and coverage disputes. A value dispute is one in which the insurer has admitted coverage (and thus liability) but the insurer is contesting the value of the loss. Florida courts repeatedly hold that coverage disputes are matters best reserved for the court system, while value disputes where liability has already been admitted is most efficiently resolved by appraisers.
What else do you need to know about appraisal?
This discussion about the appraisal process only scratches the surface. In reality, insurance litigation in this area is much more intricate. Often the issue of whether a party is entitled to enforce the appraisal provision will depend on the specific facts of your case. Some issues that arise include: whether the parties respected the notice provisions applicable to your case, did a party inadvertently waive their right to enforce appraisal by failing to timely assert it, did the insurer follow other statutory rules requiring the insurer to give notice of applicable mediation programs, whether all conditions precedent to bringing suit have occurred, etc. In addition, many Florida courts have differing opinions as to many appraisal-related issues that may arise. Thus, the specific rules and procedures that apply to your claim will depend on both the specific facts of your case, as well as the jurisdiction where your case will be heard.
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 [email protected].