{"id":898998,"date":"2021-08-04T15:14:20","date_gmt":"2021-08-04T21:14:20","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898998"},"modified":"2021-08-04T15:14:26","modified_gmt":"2021-08-04T21:14:26","slug":"appraisal-provision-enforced","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/appraisal-provision-enforced\/","title":{"rendered":"Appraisal Provision Enforced"},"content":{"rendered":"\n<p><a href=\"https:\/\/www.mondaq.com\/unitedstates\/insurance-laws-and-products\/1095854\/appraisal-provision-enforced?email_access=on\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Burns White<\/a><\/p>\n\n\n\n<p>In a dispute involving the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/appraisal-process-non-covered-claims\/\" target=\"_blank\" rel=\"noreferrer noopener\">appraisal provision<\/a> of a residential insurance policy, the Eastern District of Pennsylvania granted an insurer&#8217;s motion to dismiss a breach of contract claim after finding that the insured&#8217;s claim was a dispute over the value of the loss, not a coverage dispute, and that the claim must proceed with the appraisal process set forth in the policy.\u00a0 The Court additionally stayed the insured&#8217;s bad faith claim pending the completion of the appraisal process.\u00a0\u00a0See\u00a0Bussie v. American Security Ins. Co., 2021 WL 2206282 (E.D. Pa. Jun. 1, 2021).<\/p>\n\n\n\n<p>In&nbsp;Bussie, the insured filed a claim with her insurer after her home was damaged in a fire. &nbsp;The insured&#8217;s public adjuster inspected the premises and estimated damages to be $328,573.68.&nbsp; The insurer retained its own adjusting firm, which initially assessed the damages to be $317,826.07 for the same areas to the home covered by the insured&#8217;s adjuster.&nbsp; After a series of revisions, the insurer&#8217;s adjusting firm ultimately reduced the estimated the damages to be $74,261.96, and the insurer issued a check payable to the insureds for this amount less the deductible and a deduction for depreciation.<\/p>\n\n\n\n<p>Recognizing that there was a dispute as to the amount of the insured&#8217;s loss, the insurer sent a letter to the insured&#8217;s public adjuster to invoke its right to an appraisal as outlined in an Appraisal Provision of the insured&#8217;s residential insurance Policy.&nbsp; Per the Appraisal Provision, either party may demand an appraisal of the loss when there is a disagreement on the amount of the loss. &nbsp;The insurance policy further provides that no action can be brought unless the policy provisions, including the Appraisal Provision have been complied with.&nbsp; The insured did not identify an appraiser as required by the Appraisal Policy and instead initiated suit against her insurer and the insurance adjusting company.&nbsp; The insured asserted claims against the insurer for breach of contract and statutory bad faith, among other claims.&nbsp; The insurer moved to dismiss all claims.<\/p>\n\n\n\n<p>The insurer argued that the breach of contract claim should be dismissed because it invoked its right to appraisal under the Policy&#8217;s Appraisal Provision and, pursuant to the terms of the Policy, the insured is required to engage in the appraisal process prior to commencing suit.&nbsp; The insured argued that the appraisal process is neither mandatory nor appropriate because her Complaint alleges a coverage dispute, as evidenced by the insurer&#8217;s rejection of certain line items of damages and refusal to pay the majority of the claimed loss. &nbsp;In rejecting the insured&#8217;s argument that there is a coverage dispute, the Court recognized that two adjusters preparing appraisals for a fire loss may disagree as to the scope of damage caused by the fire, and that this does not suggest that coverage is in dispute.&nbsp; Accordingly, the Court dismissed the breach of contract claim, noting that the insured must proceed with the appraisal process.<\/p>\n\n\n\n<p>In support of dismissal of the bad faith claim, the insurer argued the Complaint fails to allege the necessary elements of a bad faith claim because it fails to allege facts that support an inference that the insurer either denied the insured&#8217;s claim or acted knowingly or recklessly in doing so.&nbsp; The Court, however, disagreed with the insurer&#8217;s characterization of the bad faith claim and found that the insured&#8217;s bad faith claim was grounded largely on allegations that the insurer worked together with the insurance adjusting firm to reduce the loss estimate prepared by the field adjuster.&nbsp; Consequently, the Court stayed the bad faith claim pending completion of the appraisal process.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Burns White In a dispute involving the appraisal provision of a residential insurance policy, the Eastern District of Pennsylvania granted an insurer&#8217;s motion to dismiss a breach of contract claim after finding that the insured&#8217;s claim was a dispute over the value of the loss, not a coverage dispute, and that the claim must proceed&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/appraisal-provision-enforced\/\">Continue reading <span class=\"screen-reader-text\">Appraisal Provision Enforced<\/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":[10235],"tags":[9895,10388,10657,351],"class_list":["post-898998","post","type-post","status-publish","format-standard","hentry","category-insurance-appraisal","tag-advise-consult","tag-appraisal-provision","tag-breach-of-contract-claims","tag-insurance-appraisals","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>Appraisal Provision Enforced - Advise &amp; 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