APPRAISAL PROVISION APPLIES TO LOSS

Homeowners	Appraisal
Assignment of Benefits

State Farm Ins. Company (State Farm) issued a homeowners policy to Mauricio and Patricia Ortizes (The Ortizes) when a dispute arose. The Ortizes’ roof was damaged by a storm and they filed a claim seeking repairs. Later, the Ortizes assigned their claim benefits to Speedy Dry Inc. (Speedy). Speedy and State Farm disagreed over how the claim should be handled, so they filed counter declaratory judgments. When State Farm’s filing was denied, the insurer appealed.

In the underlying argument, Speedy did not agree with State Farm’s position that it had the option to make roof repairs using shingles that did not match the rest of the roof. Speedy argued that the insurer was obligated to either use matching shingles or replace the entire roof. State Farm insisted on applying their policy’s appraisal provision to set the amount of the roof loss. After both filed for declaratory judgments in support of their positions, the trial court found in favor of Speedy and the Ortizes.

Upon appeal, the higher court focused upon the policy’s appraisal language. Its review included examination of a court case it deemed relevant as well as applicable state law. In essence, the appraisal provision stated that either the insured or the insurer had the right to invoke an appraisal. The court noted that the insurer did not deny the roofing claim, it had the goal of coming to an agreement on the amount of the roof loss. The provision required that each party choose its own appraiser, those appraisers would choose a judgment and the agreement of any two would be binding. The policyholder and the insurer were to share the costs of the appraisal equally.

The higher court’s consideration of the appraisal provision, a relevant case and state law, all aligned. In its view, the use of the policy’s appraisal provision was justifiable. The trial court decision in favor of the Ortizes was reversed and remanded.

State Farm Florida Insurance Company, Appellant, v. Speed Dry, Inc., as Assignee or Mauricio and Patricia Ortizes, Appellees. FLACTApp 5^th Circuit. No 5D18-3581. Filed April 3, 2020. Reversed and Remanded.

https://www[dot]propertyinsurancecoveragelaw[dot]com/files/2020/04/183581_DC13_04032020_081325_i[dot]pdf [downloaded 7/31/2020]