Tenth Circuit Rules Against Insurer, Decides Appraisers Can Determine Causation
In the continuing saga of what can and cannot be appraised in a property insurance appraisal, the Tenth Circuit, in contrast to many other courts, has ruled appraisers can determine coverage issues.
In Bonbeck Parker, LLC v. Travelers Indem. Co. of Am., 2021 U.S. App. LEXIS 29607 (10th Cir. October 1, 2021), a hailstorm damaged three buildings covered under a commercial property insurance policy.
A dispute between the insured and insurer arose over whether the hailstorm caused all of the damage claimed.
The insurer paid some of the claimed damage, but denied coverage for other claimed damage, asserting that it was caused by non-covered causes such as wear and tear. The insured invoked appraisal.
The insurer asserted that it would only participate in appraisal under certain conditions. The insurer wanted to limit the appraisal only to undisputed hail damages. Thus, the appraisal panel would be limited to deciding how much repairs would cost but not what caused the roofs to require repairs in the first place. The insured objected.