Rhode Island appraisals are treated very similar to Florida appraisals. The general rule is that unless the claim is denied for coverage, the parties must go to appraisal if it is demanded. Insurers seeking to avoid appraisal need to specifically indicate why the dispute is subject to a coverage denial and must be litigated.
The Rhode Island Supreme Court stated the following about the appraisal process:
[W]e hold that unless the insurer denies coverage for the claimed loss and if the dispute is limited to the amount or extent of the loss, the parties are required to submit to the appraisal process.
Furthermore, in the event of a genuine scope-of-coverage issue—whether caused by an ambiguity in the policy or other circumstances not present here—the issue may be litigated. However, we hold that in cases in which the insurer refuses to submit to the appraisal process in favor of litigation, the insurer must specify with particularity to the policyholder the alleged ambiguity in the policy and articulate why the issue is one of coverage for the loss rather than the amount of the loss. An insured is entitled to timely and adequate notice of the specifics of the dispute so that the insured may contest the denial of coverage. In the case at bar, we are of the opinion that Allstate’s vague allegations of “pre-existing damage” were insufficient to put the policyholder on notice, and, as noted above, were not a genuine attempt to litigate a scope-of-coverage issue.1
The Rhode Island Court favorably cited Florida appraisal law by stating:
In State Farm Fire and Casualty Co. v. Licea, 685 So.2d 1285 (Fla.1996), the Florida Supreme Court considered the distinction between a scope of coverage issue and one concerning the amount of loss. The court declared, “where there is a demand for an appraisal under [a] policy, the only ‘defenses’ which remain for the insurer to assert are that there is no coverage under the policy for the loss as a whole or that there has been a violation of the usual policy conditions such as fraud, lack of notice, and failure to cooperate.”…We deem this reasoning persuasive and applicable to the present case.
Rhode Island is a very historic and seafaring state. I spent a fair amount of time in Newport, Rhode Island last summer preparing for Newport to Bermuda sailing race. The video above is a priest saying a prayer just before we left. The Almighty protected us, but we should have prayed a little harder or longer because we needed more wind close to the finish.
If you get a chance, visit Rhode Island. The people from Rhode Island are very friendly and other than to sail in the spring and summer, the First Party Claims Conference is an educational excuse to explore Rhode Island. This Claims Conference will be held outside of Providence, Rhode Island on October 14-16. Here is its link for information.
Thought For The Day
The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
—William Arthur Ward
1 Hahn v. Allstate Ins. Co., 15 A.3d 1026 (R.I. 2011).