On Friday, July 3, 2009, a very
significant case came out on the appraisal clause. While it applies primarily to structure
and to homeowners claims, there is application to auto, inland marine and
commercial equipment coverage. The
bottom line is that the determination of the cause of loss (for instance, is
something hail damage or not) is not beyond the ability of the appraisers to
determine. In other words, a
disagreement on the scope of loss – is a particular roof a total due to a
covered event, or is it just the ridgeline – can be determined by the
appraisers. Some insurance
companies have been stating, as had State Farm, that any disagreement in scope
of covered loss removes the claim from resolution under the appraisal process.