Courts proceed to be requested to referee disputes about how appraisal ought to be performed, what an award should seem like, and if it ought to have line merchandise delineations of harm. A current federal ruling out of Florida addressed simply such a combat between Nice Lakes Insurance coverage SE and Ming & Kwang Improvement Company. 1
The case arose after Hurricane Ian broken industrial property in Naples. The insurer pushed for the appraisal panel to make use of its most well-liked “type” requiring separation of alternative price worth, precise money worth, direct and oblique damages, and any prices related to matching. The policyholder rejected that demand, insisting that the coverage itself comprises no such requirement.
Nice Lakes made a number of arguments in assist of its place. It urged the court docket to learn the coverage “as a complete” and argued that as a result of the Loss Fee situation makes alternative price funds contingent upon precise restore, the award should get away RCV from ACV to stop untimely cost.
Nice Lakes then claimed that Florida case regulation helps line-item appraisal awards when courts have instructed panels to separate totally different classes of advantages, pointing to selections involving ordinance and regulation protection, particles elimination, and different coverage parts.
The insurer’s most aggressive stance was on the problem of matching. Citing the householders matching statute, which explicitly applies solely to residential insurance policies, Nice Lakes argued that industrial insurance policies present no protection for matching. In its view, any try to fold matching into an appraisal award could be improper as a result of it might pressure the insurer to pay one thing not owed below the coverage.
I might counsel that insurers permitting their insurance coverage protection attorneys to undertake a “win in any respect prices” mentality and argue in opposition to matching of business property, which has heretofore all the time been thought of throughout adjustment, be thought of unhealthy religion. Hoping a choose will make a mistake and alter the best way an insurer and full business adjusts claims actually is a scarcity of excellent religion. Good religion ought to apply throughout litigation.
The policyholder filed a superb authorized transient and countered that none of those arguments modified the elemental appraisal provision within the contract, which mentioned nothing about line-itemization, timing, or matching carve-outs. Florida regulation is obvious that courts can’t rewrite contracts so as to add circumstances the insurer now needs it had drafted.
Instances throughout the Center and Southern Districts of Florida have rejected insurer makes an attempt to compel line-item awards absent specific coverage textual content. The policyholder additionally emphasised that matching can nonetheless fall throughout the protection grant, for the reason that coverage insures in opposition to “direct bodily lack of or injury to Lined Property” and requires repairs to be of “like form and high quality.” Underneath that wording, a repaired property that’s clearly mismatched should be thought of broken. The shortage of a statute mandating matching in industrial insurance policies doesn’t logically result in the conclusion that matching is prohibited in these insurance policies.
The court docket sided with the policyholder. It famous that Nice Lakes primarily conceded that the coverage’s plain language doesn’t require delineation of RCV, ACV, or matching. Whereas a line-item award might generally be useful, the court docket defined, the true query is whether or not it may be pressured on a celebration who objects. The reply, below Florida regulation, is not any.
Federal and state selections have persistently held that compelling itemization not discovered within the coverage would quantity to rewriting the contract. The court docket distinguished the insurer’s authorities, stating that in some instances the events had agreed to itemization, and in others the problem was not contested. None supported the concept that an insurer can unilaterally impose its personal appraisal type.
On the necessary concern of matching, the court docket acknowledged that Florida’s statute applies to householders’ insurance coverage however rejected the insurer’s illogical leap that industrial insurance policies subsequently should present zero matching. The absence of a statutory mandate doesn’t equate to a prohibition, and industrial insurance policies can nonetheless cowl matching when their language helps it.
There are a selection of classes for appraisers, umpires, and events to an insurance coverage dispute. First, appraisal is a contractual mechanism, and courts will implement it as written relatively than including circumstances an insurer may discover handy.
Second, insurers can’t use the shortage of a statutory matching requirement for industrial insurance policies to argue that such protection is categorically excluded. The insurer’s try to twist silence within the statute right into a broad prohibition illustrates how illogical arguments can undermine credibility. Ultimately, the policyholder was entitled to an appraisal below the coverage’s precise phrases, not below the insurer’s redrafted model.
Lastly, I used to be impressed with the depth of analysis and arguments made by the policyholder’s counsel. The lesson is that attorneys make a distinction within the end result of instances. Policyholders ought to choose their counsel correctly and after a diligent search.
Fifteen years in the past, I wrote:
The pattern is obvious–itemized appraisal awards are requested extra typically. Whether or not you suppose appraisal awards ought to be itemized or not, your complete controversy can go away one very unhappy with your complete appraisal expertise. 2
Superb how some debates haven’t modified over time.
Thought For The DayÂ
“The last word measure of a person is just not the place he stands in moments of consolation and comfort, however the place he stands at occasions of problem and controversy.”Â
—Martin Luther King, Jr.
1 Nice Lakes Insurance coverage SE v. Ming & Kwang Dev’t Corp., No. 2:24-cv-00451(M.D. Fla. Sept. 2, 2025).
2 Chip Merlin, Requests for Itemized and Line By Line Appraisal Awards Turn into Extra Widespread, Prop. Ins. Protection Legislation Weblog (Oct. 28, 2010).
