In a recent case 1 the New York Appellate Division refused to file an evaluation fee that was unfavorable to an insurance company because the evaluation was awarded in accordance with the procedures of the insurance policy and there was fraud, bias or bad faith.
In that case, the policy had a limit of approximately $ 26 million for "Total Physical Damage Value." Following a loss, the insured referred to the policy evaluation process when the parties could not agree on the size of the loss. Subsequently, a final allocation was made to the evaluation panel in the amount of approximately $ 24 million.
As the final award did not divide the damaged property between "building" and "machinery and content", the insurer requested that the evaluation panel provide clarification of the award. Dissatisfaction with the subsequent distribution, the insurer sought court intervention to disregard the decision of the assessment panel by claiming that none of the loss constituted buildings.
The Appeals Division ultimately refused to interfere with the assessment. In decision o, the Appellate Division considered that by requesting an assessment panel to apportion property loss between "buildings" and "machinery and content", the parties expressly considered that the panel should determine which damaged objects were "buildings" and which were "machinery and content". The Court further commented that "the reservation of this issue for future disputes, even though it has been sent to the panel for decision" would have made [appraisal panel’s determination] meaningless. "
If you would like to learn more about assessment, join Michael Duffy and me for a presentation on The Mechanics of the Appraisal Process, at the Spring Conference of the Professional Public Adjusters Association of New Jersey (“PPAANJ”) on Wednesday, May 1
1 Some underwriter at Lloyd & # 39 ;s London v. Bioenergy Dev. Grp., LLC 189 ff. 573 N.Y.S.3d 13 (2020).