(Article from Insurance Law Alert, September 2019)
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A Florida appellate court ruled that a property insurer was entitled to compel appraisal even though it refused to make payments to the homeowners because it did not “wholly deny” coverage. Underwriters at Lloyd’s, London v. Sorgenfrei, 2019 WL 4383441 (Fla. Dist. Ct. App. Sept. 13, 2019).
Homeowners filed a claim with their property insurer for hurricane-related damage. The insurer admitted coverage under the policy, but argued that the loss did not meet the required deductible. Additionally, the insurer claimed that there was pre-existing damage to the property. The insurer sought to compel an appraisal, which a trial court denied.
The appellate court reversed, ruling that under Florida law, “when an insurer does not wholly deny coverage, a disagreement between the parties as to causation presents an amount-of-loss issue to be determined, under the contract, by appraisal.” The court explained that although the insurer refused to issue payment based on the deductible and alleged pre-existing damage, the insurer had conceded that a portion of the claim was within the policy’s coverage and thus did not wholly deny coverage.