Appraisal Can Go Forward Prior to Resolution of Coverage Dispute

    The Florida Supreme Court found that a trial court could compel an appraisal of the insured's loss prior to resolving coverage issues. Am. Coastal Ins. Co. v. San Marco Villas Condo. Ass'n, Inc., 2024 Fla. LEXIS 185 (Fla. Feb. 1, 2024). 

    Hurricane Irma damaged San Marco Condominium Association's buildings. American Coastal paid $192,629.75 for the loss. San Marco estimated the damage to be in excess of eight million dollars. San Marco demanded an appraisal under the policy. American Coastal refused to submit to appraisal because it was premature as its investigation was still ongoing.

    San Marco sued American Coastal and asked the court to compel appraisal. American Coastal argued that San Marco had committed fraud or had made material misrepresentations regarding its claim. The trial court heard San Marco's appraisal motion and entered an order compelling appraisal. American Coastal appealed, bu the Second District Court affirmed. 

    The Supreme Court noted that there was a disagreement over the amount of loss caused by the hurricane. Since there was an amount-of-loss dispute, the terms of the policy gave San Marco a contractual right to an appraisal of that loss.

    The court then considered whether the trial court had authority to order appraisal without first ruling on American Coastal's coverage defenses. The policy included a retained-rights provision, giving the insurer the "right to deny a claim" even "if there is an appraisal." There was no language, however, controlling the issue of timing in determining the order in which coverage and amount of loss were resolved.

    Therefore, the court rejected American Coastal's argument that an inflexible coverage-first rule applied. The existence of a coverage dispute based on allegations of fraud or material misrepresentations did not preclude a concurrent amount-of-loss issue when the parties also disagreed about the amount of damage covered by a covered event.