{"id":886102,"date":"2015-12-16T11:52:13","date_gmt":"2015-12-16T18:52:13","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=886102"},"modified":"2015-12-16T11:52:13","modified_gmt":"2015-12-16T18:52:13","slug":"courts-are-for-coverage-appraisals-are-for-amount","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/courts-are-for-coverage-appraisals-are-for-amount\/","title":{"rendered":"Courts are for Coverage; Appraisals are for Amount"},"content":{"rendered":"<p>Katelyn Mae Desrosiers | Butler Weihmuller Katz Craig LLP | December 10, 2015<\/p>\n<p>When insurers dispute coverage, rather than the amount of loss, a court is the appropriate decision maker to resolve the coverage issue.\u00a0 However, when an insurer finds coverage, but disputes the amount of loss, <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/insurance-appraisal-called-almost-perfect-method-of-alternative-dispute-resolution\/\" target=\"_blank\">appraisal<\/a> is the appropriate venue to determine a fair value of the covered damage.\u00a0\u00a0<em>Arvat Corporation v. Scottsdale Insurance Company<\/em>, 2015 WL 6504587 (S.D. Fla. Oct. 28, 2015), a recent decision from the United States District Court for the Southern District of Florida, reinforced this holding from the Florida Supreme Court in\u00a0<em>Johnson v. Nationwide Mutual Insurance Company<\/em>, 828. So. 2d 1021 (Fla. 2002) and<em>State Farm Fire and Casualty Company v. Licea<\/em>, 685 So. 2d 1285 (Fla. 1996).<\/p>\n<p>In\u00a0<em>Arvat<\/em>, Plaintiff Arvat Corporation reported damages resulting from a water pipe leak to its insurer Scottsdale Insurance Company.\u00a0 Scottsdale rendered a claim decision, finding that some damages were not covered by the policy, and paid $24,356.51, representing its adjuster\u2019s estimate of \u201cthe necessary repairs of all covered damages.\u201d\u00a0 Arvat filed a Petition for Declaratory Relief and\/or to Compel Appraisal.\u00a0 Scottsdale moved for Summary Judgment, arguing that Plaintiff cannot compel <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/do-i-have-to-complete-the-appraisal-process-before-filing-a-lawsuit-over-the-claim\/\" target=\"_blank\">appraisal<\/a> when coverage has been denied.<\/p>\n<p>The court granted Arvat\u2019s Motion for Declaratory Relief and\/or to Compel Appraisal and denied Scottsdale\u2019s Motion for Summary Judgment.\u00a0 The court found that Scottsdale admitted coverage at least as to a portion of the damage and paid Arvat for those damages.\u00a0 The parties disagreed as to the amount of loss attributable to water damage (which was a covered loss) and that attributable to wear, tear, and\/or deterioration (which was an excluded loss).\u00a0 The court cited to\u00a0<em>Johnson<\/em>\u00a0and\u00a0<em>Licea<\/em>, finding this case akin to\u00a0<em>Licea<\/em>:<\/p>\n<p>Very simply, the\u00a0<em>Licea\u00a0<\/em>court was saying that when the insurer admits that there<strong>\u00a0is<\/strong>\u00a0a covered loss, but there is a disagreement on the\u00a0<strong>amount<\/strong>\u00a0of loss, it is for the appraisers to arrive at the amount to be paid. In that circumstance, the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/insurance-appraisal-as-an-insurance-claim-dispute-resolution-tool\/\" target=\"_blank\">appraisers<\/a> are to inspect the property and sort out how much is to be paid on account of a covered peril. In doing so, they are to exclude payment for \u201ca cause not covered, such as normal wear and tear, dry rot, or various other designated, excluded causes.\u201d<\/p>\n<p>Thus, in the\u00a0<em>Licea\u00a0<\/em>situation, if the homeowner&#8217;s insurance policy provides coverage for windstorm damage to the roof, but does not provide coverage for dry rot, the appraisers are to inspect the roof and arrive at a fair value for the windstorm damage, while excluding payment for the repairs required by preexisting dry rot.<\/p>\n<p>In the present case (unlike\u00a0<em>Licea\u00a0<\/em>) State Farm says that there is no coverage for the claim whatsoever, while the homeowners say that the claim falls within an applicable coverage. Whether the claim is covered by the policy is a judicial question, not a question for the appraisers.<\/p>\n<p><em>Johnson<\/em>, 828. So. 2d\u00a0 at 1025 (citing<em>\u00a0Gonzalez v. State Farm Fire and Casualty Company<\/em>., 805 So. 2d 814, 816-17 (Fla. 3d DCA 2000)(emphasis added).<\/p>\n<p>Here, Scottsdale admitted that water damage, a covered peril, caused part of the damage to the property, but disputed the amount caused by the covered peril as opposed to wear, tear, and\/or deterioration, an excluded cause of loss.\u00a0 The court held&#8230;<\/p>\n<p><a href=\"http:\/\/www.lexology.com\/library\/detail.aspx?g=e7793ee5-2bb6-4673-b845-6b5d4a348660&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2015-12-16&amp;utm_term=\" target=\"_blank\">To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Katelyn Mae Desrosiers | Butler Weihmuller Katz Craig LLP | December 10, 2015 When insurers dispute coverage, rather than the amount of loss, a court is the appropriate decision maker to resolve the coverage issue.\u00a0 However, when an insurer finds coverage, but disputes the amount of loss, appraisal is the appropriate venue to determine a&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/courts-are-for-coverage-appraisals-are-for-amount\/\">Continue reading <span class=\"screen-reader-text\">Courts are for Coverage; Appraisals are for Amount<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[436,3],"tags":[218,3],"class_list":["post-886102","post","type-post","status-publish","format-standard","hentry","category-dispute-resolution-2","category-insurance-claims","tag-appraisal","tag-insurance-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Courts are for Coverage; 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