Page 163 - FDCC_InsightsSpecialIssue23.2

The Replacement of Appraisal Provisions with Arbitration Provisions:
Property Law
Trends in Property Coverage Litigation By Christina May Bolin
One of benefits of membership in the property section is that we produce a monthly case law update. We try to keep it narrowed down to cases that either represent a novel area of law, a changed area of law, an anomaly, or may have wider reaching implications. In doing so, it is easier to spot the patterns that are developing. One significant thing that we are watching is the replacement of the appraisal provision with an arbitration provision.
Christina May Bolin
In late 2021/early 2022, American Integrity Insurance Company asked the Florida Office of Insurance Regulation to approve the addition of an arbitration endorsement in its policies. It was approved in February of 2022. The endorsement read...
(A copy of the full endorsement can be found
at Florida Department of Insurance Regulation website www.floir.com).
Other carriers are looking at
arbitration as a replacement
for appraisal. If they do replace appraisal with arbitration (and all indications are that at least some will), this will have a significant impact on the industry. First, we anticipate litigation regarding the appropriateness of an arbitration provision in an insurance contract and whether those provisions are binding as written in a contract of adhesion (look for fights over font size, signatures, etc.,). The next significant issue will be whether you can now arbitrate coverage issues as well as scope. In some states, like Alabama, appraisal cannot determine coverage as coverage is deemed to be a question and matter of law. Participants in appraisal are generally adjusters (independent and public) and/or contractors. Lawyers may sometimes be appointed umpires, but for the most part, it is to a procedure run by lawyers. Arbitration is. Further, the under most policies with an appraisal
153
FDCC ANNUAL INSIGHTS 2023