I recently wrote about the case of Poehler v. Cincinnait Insurance Company,1 in which the Minnesota Supreme Court recently held that Minnesota Statute section 549.09 provides for pre-interest on insurance appraisal awards. Following this decision, the Eighth Circuit Court of Appeals in Housing and Redevelopment Authority of Redwood Falls v. Housing Authority Property Insurance,2 similarly held that the insured was entitled to recover pre-award interest from its insurer.

In Redwood Falls, an appraisal award was entered setting the actual cash value of the loss at approximately $700,000 more than had been paid by the insurer. The insured sought confirmation of the appraisal award. The trial court confirmed the appraisal award but denied the request for pre-award interest under section 549.09.

The Eighth Circuit reversed the district court’s decision in light of the Poehler decision, concluding that the policy at issue was identical in all relevant respects to the policy at issue in Poehler. Thus, the Eighth Circuit held that the insured may recover pre-award interest on the appraisal award. It has yet to be determined, however, how such interest will be calculated.

The Eighth Circuit remanded the case to the district court to determine the issue of calculating the pre-award interest. We will have to wait to see if such interest will be calculated on (1) the full amount of the appraisal award, representing the actual cash value of the loss, or (2) the difference between the actual cash value of the loss and the payment made before the appraisal was demanded.
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1 Poehler v. Cincinnait Ins. Co., 2017 WL 3045531 (Minn, July 19, 2017).
2 Housing and Redevelopment Authority of Redwood Falls v. Housing Authority Prop. Ins., 2017 WL 3205824 (July 28, 2017).

  • shirley heflin

    Dear Ms. Phillips:

    It’s always nice to see when insurance companies are forced to do what they should have done in the first place! Albeit, the Insureds had to jump many hurdles to get what they paid for (i.e., their benefits), but – in the cases you cited anyway – JUSTICE PREVAILED !!

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL