Policy Wording Must Limit Appraisal to Quantum Only

Post 4917

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Defendant State Farm Fire and Casualty Company (“State Farm”) issued a homeowners insurance policy to Plaintiff Sharon Marie Rogers (“Rogers”). State Farm determined the amount of loss to be $3,490.68, which was less than Rogers’ deductible. Insurance Adjusting Services West Penn; West Penn determined the amount of loss to be $214,871.20. Plaintiff moved the Court to Compel Appraisal to resolve the dispute over the amount of loss and Stay Litigation.

In Sharon Marie Rogers v. State Farm Fire and Casualty Co., No. 1:24-cv-148, United States District Court, S.D. Ohio, Western Division (October 11, 2024) the court resolved the dispute over the need for and scope of appraisal.

BACKGROUND

West Penn demanded appraisal on behalf of the insured. Trial counsel repeated the demand for appraisal.

LAW & ANALYSIS

The purpose of an appraisal is to provide a plain, speedy, inexpensive and just determination of the extent of the loss. The parties agree that: a storm is a covered cause of loss; and the March 25, 2023 storm caused loss to Rogers’ dwelling. State Farm contended that the amount of loss to be determined by appraisal includes only the pricing of the repairs it deems are covered.

THE LIMITATIONS IMPOSED ON APPRAISERS

The USDC concluded that to allow a catch-all phrase to incorporate causation is at odds with Ohio case law to date and, equally important, undermines the purpose behind appraisal.

CONCLUSION

Plaintiff’s Motion to Compel Appraisal was granted.

The Court can either include or exclude them once it has determined whether the policy provides coverage for them.

ZALMA OPINION

The history of the appraisal clause in fire and homeowners policies have limited the appraisers to establish only the quantum of a loss and were not authorized to determine coverage issues, without language in the policy stating so in the policy wording. The USDC in this case, applying Ohio law, requires that the policy wording must include language in the policy that the appraisers may not consider causation. The detailed report the court requires from the appraisers and umpire will allow it to make decisions about coverage for each item of value and loss the appraisers reach.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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