In The Scope of Appraisal: Does It Include Causation, I addressed property insurance appraisals in Florida, where the law is well established with multiple reported decisions regarding the scope of appraisal and the determination of causation in appraisal.
In contrast, the law in New Jersey is quite sparse on this subject, with no reported opinions in the last 14 years on the scope of appraisal. This gives policyholder advocates an opportunity to influence and shape the law on appraisal as Superstorm Sandy claims move through the courts.
New Jersey law does provide that either party, the insured or insurer, can invoke appraisal even when coverage is disputed.1 I have seen several carriers deny the appraisal process in New Jersey because the case involves disputed “scope and coverage” issues. This is an inadequate reason for refusing to participate in appraisal.
While the law in New Jersey does not clearly define the scope of appraisal, or whether causation can be determined in appraisal as part of the “amount of loss,” these issues will become clearer as Superstorm Sandy cases are litigated in the coming months.
1 See Ward v. Merrimack Mut. Fire Ins. Co., 332 N.J. Super. 515, 528, 753 A.2d 1214, 1221 (N.J. Super. Ct. App. Div. 2000) (citing Hala Cleaners, Inc. v. Sussex Mut. Ins. Co., 115 N.J. Super. 11, 12-13, 277 A.2d 897 (Ch. Div. 1971)).