Can a policyholder race to a lawsuit demanding appraisal without expressing a disagreement over the amount of the loss? A Florida court says “no.”1

The holding is pretty simple:

Because the parties never engaged in an exchange of information sufficient to establish a genuine disagreement over the amount of loss, the matter was not ripe for appraisal, and the trial court erred in granting the Association’s premature motion to compel appraisal.

The vast majority of all insurance disputes come to a point where either the insurer expressly states in words that convey “the policyholder is asking for payment greater than what is determined is due,” or the policyholder conveys the message that “the insurer is paying too little.” There is usually some rancor and exchange of ideas that what is being paid or estimated is owed is something not mutually agreed to. That is an expressed disagreement.

My reading of the case suggests that the courts are looking for some expressed disagreement with the insurer’s estimated amount of loss before the policyholder can demand appraisal. Since that has been my practice, I agree with the decision. In part or in whole, there should be some disagreement about the amount of the loss before the policyholder demands appraisal.

My concern is that insurers are going to highlight this language of the decision:

Simply put, the parties did not engage in a meaningful exchange sufficient to establish a disagreement regarding the value of the property or the amount of loss. We reaffirm that “appraisal is premature when one party has not provided a meaningful exchange of information sufficient to substantiate the existence of a genuine disagreement.

Some insurance companies can never get enough “meaningful” exchanges of information when they delay and refuse to fully pay, citing that their investigation is still ongoing. They will argue the matter is not ripe for an appraisal even though there is a genuine dispute and disagreement about the loss. This happens quite often with condominium or larger dollar claims.

Thought For The Day

The people to fear are not those who disagree with you, but those who disagree with you and are too cowardly to let you know.
—Napoleon Bonaparte
1 Certain Underwriters at Lloyd’s v. Lago Grande 5-D Condo. Ass’n, No. 3D21-636 (Fla. 3d DCA May 4, 2022).