The Scope of Appraisal

Originally published by Ashley Harris .

Earlier this month, a federal judge sitting in the Southern District of Indiana examined the scope of the appraisal clause in the property insurance policy. Relying on many of the same cases I have discussed in earlier blogs in this series, the court found that the appraisal panel must consider causation as part of the appraisal process:

The insurance policy at issue here contains an appraisal clause that makes no mention of any exception if there is disagreement on the ‘value of the property or the amount of ‘loss.’’ Both parties concede that there is some amount of loss covered by the policy, but [the carrier] insists that the majority of the roof damage to the apartment complex is attributable to faulty construction or maintenance, rather than storm damage. We agree with [the insured] that it would be extraordinarily difficult, if not impossible, for an appraiser to determine the amount of storm damage without addressing the demarcation between ‘storm…

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