Courts proceed to be requested to referee disputes about how appraisal must 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 battle between Nice Lakes Insurance coverage SE and Ming & Kwang Growth Company. 1
The case arose after Hurricane Ian broken business property in Naples. The insurer pushed for the appraisal panel to make use of its most popular “type” requiring separation of alternative value worth, precise money worth, direct and oblique damages, and any prices related to matching. The policyholder rejected that demand, insisting that the coverage itself accommodates no such requirement.
Nice Lakes made a number of arguments in help of its place. It urged the court docket to learn the coverage “as an entire” and argued that as a result of the Loss Fee situation makes alternative value funds contingent upon precise restore, the award should escape RCV from ACV to forestall untimely cost.
Nice Lakes then claimed that Florida case regulation helps line-item appraisal awards when courts have instructed panels to separate completely different classes of advantages, pointing to selections involving ordinance and regulation protection, particles elimination, and different coverage elements.
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 business insurance policies present no protection for matching. In its view, any try and fold matching into an appraisal award could be improper as a result of it will power the insurer to pay one thing not owed beneath the coverage.
I’d 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 economic property, which has heretofore at all times been thought-about throughout adjustment, be thought-about unhealthy religion. Hoping a decide will make a mistake and alter the best way an insurer and whole trade adjusts claims actually is an absence of excellent religion. Good religion ought to apply throughout litigation.
The policyholder filed a wonderful authorized temporary and countered that none of those arguments modified the basic appraisal provision within the contract, which stated nothing about line-itemization, timing, or matching carve-outs. Florida regulation is evident that courts can’t rewrite contracts so as to add circumstances the insurer now needs it had drafted.
Circumstances throughout the Center and Southern Districts of Florida have rejected insurer makes an attempt to compel line-item awards absent express coverage textual content. The policyholder additionally emphasised that matching can nonetheless fall inside 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.” Below that wording, a repaired property that’s clearly mismatched should be thought-about broken. The shortage of a statute mandating matching in business 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 basically conceded that the coverage’s plain language doesn’t require delineation of RCV, ACV, or matching. Whereas a line-item award might typically be useful, the court docket defined, the true query is whether or not it may be compelled on a celebration who objects. The reply, beneath 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, mentioning that in some circumstances the events had agreed to itemization, and in others the problem was not contested. None supported the concept an insurer can unilaterally impose its personal appraisal type.
On the essential problem of matching, the court docket acknowledged that Florida’s statute applies to householders’ insurance coverage however rejected the insurer’s illogical leap that business insurance policies due to this fact should present zero matching. The absence of a statutory mandate doesn’t equate to a prohibition, and business 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 somewhat than including circumstances an insurer would possibly discover handy.
Second, insurers can’t use the dearth of a statutory matching requirement for business insurance policies to argue that such protection is categorically excluded. The insurer’s try and 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 beneath the coverage’s precise phrases, not beneath 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 final result of circumstances. Policyholders ought to choose their counsel properly and after a diligent search.
Fifteen years in the past, I wrote:
The development is evident–itemized appraisal awards are requested extra usually. Whether or not you assume appraisal awards must be itemized or not, your entire controversy can depart one very unhappy with your entire appraisal expertise. 2
Wonderful how some debates haven’t modified over time.
Thought For The Day
“The final word measure of a person is just not the place he stands in moments of consolation and comfort, however the place he stands at instances of problem and controversy.”
—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 Develop into Extra Frequent, Prop. Ins. Protection Regulation Weblog (Oct. 28, 2010).
