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Monday, April 15, 2024

Arizona Insurance coverage Appraisal—Can Prices Be Decided Earlier than Causation?


Arizona instances point out that causation can’t be decided in an appraisal. However can an appraisal go ahead to find out the prices of the hypothetical lined harm? It could seem to be an enormous waste of time because the causation challenge must be litigated. However, a federal courtroom was confronted with this challenge.1

The courtroom dominated that causation couldn’t be decided by the appraisal panel:

The appraisal provision states, in pertinent half, ‘if we and also you disagree on the quantity of loss, both could make written demand for an appraisal of the loss.’ The availability describes an neutral course of involving two appraisers and an umpire to settle variations within the valuations of the property harm. Arizona Courts have decided that an appraisal clause solely permits the events to find out the quantity of injury via an appraisal and to not resolve questions of protection via such a continuing.

…The Arizona Courtroom of Appeals additional concluded that ‘the appraisers have been licensed to find out solely a query of reality, specifically, the precise money worth of the insured constructing.’ Thus, in San Souci Residences, the Courtroom concluded that the ‘challenge of whether or not the roof tiles have been broken by the hail storm and whether or not the supply of the harm is outdoors of the coverage limits isn’t a dispute in regards to the quantity of loss that each one events conform to be lined’ and was not throughout the scope of the appraisal provision.

Right here, in finest gentle to Plaintiffs at this stage, the dispute between the events facilities on which structural engineer’s opinion, Plaintiffs’ structural engineer or Defendant’s structural engineer, is appropriate relating to the reason for the muse issues for which Plaintiffs search compensation from Defendant. Arizona regulation doesn’t ponder an appraiser’s central position as arbiter of which structural engineer’s opinion is appropriate. Appraisal isn’t acceptable to find out whether or not or not the fridge line leak prompted the muse issues or whether or not these issues resulted from different, unrelated causes.

But, the courtroom allowed the appraisal to go ahead to determine the quantity of the damages:

Nonetheless, on the report earlier than the Courtroom, the Courtroom can’t conclude that there is no such thing as a dispute between the events regarding the price of repairs to the muse and associated repairs. Defendant has not clearly said that it’ll settle for Plaintiffs’ loss quantity for basis and basis associated repairs if protection is established. Beneath the insurance coverage contract written by Defendant, Plaintiffs are entitled to an appraisal relating to the price of basis and basis associated repairs. The Courtroom will compel an appraisal in line with the phrases of the Coverage and in line with the ‘sturdy choice in favor of permitting [Plaintiff] to invoke the appraisal clause.’

There shall be an appraisal award for the damages, and the protection shall be decided in litigation.

Thought For The Day

The Arizona desert to us is starkly lovely always, however when touched by the magic of Spring it turns into a land of enchantment.

—Raymond Carlson


1 Henderson v. Liberty Mut. Ins. Co., No. 1:23-CV-00670 (D. Ariz Aug. 8, 2023).



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