Overview
In property insurance claims, insurers frequently attempt to reject policyholder demands for appraisal by framing causation disputes—specifically, distinguishing between covered storm damage and excluded wear and tear—as unappraisable “coverage questions.”
In the majority of U.S. jurisdictions, once an insurer admits there is a covered loss, determining whether specific damage was caused by a covered event or by “wear and tear” falls directly within the appraisal panel’s authority to evaluate the scope and amount of loss.
Key Legal Findings & Jurisdictional Split
1. Majority Rule: Causation Is an Amount-of-Loss Issue
When an insurer concedes coverage for part of a loss, deciding which specific damages stem from a covered peril (e.g., wind or hail) versus excluded maintenance issues is considered a factual determination for the appraisal panel.
- Colorado (10th Circuit): Held that an insurer breaches its policy by refusing appraisal when acknowledging some storm damage while attributing the remainder to wear and tear (BonBeck Parker, LLC v. Travelers Indem. Co.).
- Florida: Established that causation is a coverage issue for the court only when an insurer wholly denies a claim. Once partial coverage is admitted, causation becomes an amount-of-loss determination for appraisers (State Farm Fla. Ins. Co. v. Gonzalez).
- Texas, Iowa, & Illinois: Courts routinely require appraisal even when panels must differentiate hail impact from deterioration or improper installation (Hart Chesnutt, LLC v. Covington Specialty Ins. Co.; N. Glenn Homeowners Assn. v. State Farm; Mouw v. Shelter Mut. Ins. Co.).
2. Minority Rule: Causation Is Strictly Judicial
A few states restrict appraisal exclusively to monetary valuation, reserving all causation assessments for judicial review unless contractually specified otherwise (e.g., Alabama in Rogers v. State Farm Fire & Cas. Co.).
Practical Takeaways for Policyholders & Practitioners
- Enforce Demands in Majority States: Where coverage is acknowledged in part, insurance carriers should be held to appraisal requirements even if wear and tear is cited.
- Narrow the Dispute First: Utilizing appraisal to resolve factual disagreements over scope and causation simplifies the process, leaving pure legal and policy interpretations for court resolution if necessary.
- Jurisdictional Review: Always confirm whether the subject jurisdiction follows the majority or minority rule before initiating formal appraisal demands or litigation.
Written with the assistance of AI.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 801.641.8304, or email experts@adviseandconsult.net.