Insurance Claim Scope of Loss Disputes and Compelling Appraisal
Interesting information on Appraisals in New York State According to the Senate Bill 2088-A
As an appraiser, it is very likely that there will be a situation where the insured feels that they need to invoke the appraisal clause to resolve an impasse of their insurance claim settlement amount. However, often, the Insurance Company will deny the insured's attempt to invoke appraisal on the grounds that it is not yet ripe for appraisal, or the dispute is of scope and not value. In my opinion, this can often be a "delay tactic" and an attempt to ensure their leverage during the claim process. An interesting Bill was passes earlier this year in New York that states that the insured can request the courts to compel appraisal when the Insurance Company is not complying to their request.
Can an insured request the courts to compel the insurer to comply to their invocation of the appraisal clause?
{Line 14, (C)} Compelling Appraisal: "In the event of a covered loss", insureds can compel the insurer to proceed with a requested appraisal. If the insurer feels that the part of the insured's loss is not covered, they can issue a partial coverage declination letter and reserve its rights to decline payment for the items which are not believed to be covered under the subject insurance policy. However, the insured can still compel appraisal.
{Line 12-14} The court may enforce such an agreement as if it were an arbitration agreement, in which case the proceeding shall be conducted as if brought under article seventy five OF THIS CHAPTER.
Scope Disputes
The Senate Bill 2088-A allows the court to compel the parties to submit to the appraisal process as set out in a standard fire policy regardless of any dispute raised concerning scope of coverage or scope of loss. Amd SS3404 & 3408, Ins L; amd S7601, CPLR { Senate Bill 2088-A }
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