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What is the assessment process in Arizona? – Blog for the law on property insurance



The Rocky Mountain Association of Public Insurance Adjusters (RMAPIA) had a good meeting with a sincere and positive discussion on current insurance issues facing the Colorado Division of Insurance. Pictured above is Merlin Law Group's attorney Larry Bache questioning Insurance Commissioner Michael Conway. 1

During his presentation on assessment, attorney Matthew Pearson discussed a case in Arizona 2 that supports valuation that supports assessment in assessment

Regarding causation, the Court stated that in Arizona assessments causation was appropriate for the determination of the assessment panel:

The Court is convinced by the Court reasoning in a number of cases that "the amount of the loss "According to the assessment provision would necessarily include a determination of causation as to whether part of the damage to the Plaintiff's roof is due to another cause, such as wear and tear, and not to the storm in November 201

9. See Ori v. Am. Family Mut. Ins. Co … .. ("The term & # 39; loss amount & # 39; & # 39; necessarily … includes the amount it would cost to repair what was lost. & # 39;")…. Quade 814 NW2d at 706 -07 ("The Quades claims that the damage to the roofs is a covered loss for wind damage. Secura claims that the damage to the roofs is due to wear and tear and is exempt from the insurance. We believe that in the circumstances of this case that a determination of the "amount of the loss" under the assessment clause necessarily involves a determination of causation. "); Johnson v. State Farm 204 SW3d 897, 903 (Tex. App. 2006) (" If the parties must first agree on which specific shingles have been damaged and approach any disagreement about the extent of the damage as a causal, coverage or liability issue, either party may counter the other party's request for an assessment by labeling a disagreement as a coverage dispute. once it has been established that there is a covered loss and a dispute over the amount of that loss, the assessment process determines the amount to be paid due to loss from a covered hazard. ”); Phila. Indem. Ins. v. WE Pebble Point 44 F.Supp.3d 813, 818 (SD Ind. 2014) ("[I] t would be extremely difficult, if not impossible, for an appraiser to determine the amount of storm damage without taking deal with & # 39; storm damage & # 39; and & # 39; non-storm damage. & # 39; To say otherwise would be to say that an assessment is never in order unless there is just one possible cause for it. damage…."); State Farm Lloyds v. Johnson 290 SW3d 886, 892-93 (Tex. 2009) ("If State Farm is correct that valuers can never apportion damages between covered and excluded hazards, then assessments can never assess hail damage if not a roof is entirely new. It would make assessment clauses largely inoperative, a construction we must avoid. ”); Walnut Creek Townhome Ass'n v. Depositors Ins. Co. 913 NW2d 80, 91 ( Iowa 2018) (which concludes that although coverage issues are intended for the court, actual causal issues can be decided through the assessment process).

The Court also commented on the legal standards. Applicable to Arizona assessments:

assessment is analogous to arbitration "and" the principles of arbitration law "should be applied to proceedings involving assessments. Meineke v. Twin City Fire Insurance Co. 892 P.2d 1365, 1369 (Ariz. Ct. App. 1994 ). "Public policy favors arbitration", which is "a quick and inexpensive method of dispute resolution." . Due to this general policy, any doubt as to whether or not an issue is subject to arbitration should be resolved in favor of arbitration. New Pueblo Constructors, Inc. v. Lake Patagonia Recreation Ass’n 467 P.2d 88, 91 (1970). Similarly, doubts as to whether an issue is subject to assessment should be resolved in favor of assessment. A law review commentator who reflected on Arizona assessments and this question said:

In this regard, there is a clear need to formally separate assessment from arbitration, as arbitration uses a much more comprehensive collection of facts than that used in assessment and, unlike from assessment, uses a quasi-judicial decision-making process. Arbitration involves much more than assessment; arbitrators hold formal hearings, take evidence, call witnesses and resolve questioned liability issues, while the assessment is designed to avoid the necessity of this type of conflicting process in the first instance. Appraisal's sole purpose is to determine the amount of damages where liability is undisputed.

The same commentator noted how courts have made the distinctions between arbitration and assessment ambiguous in Arizona:

Ambiguity in Arizona & # 39 ;s Common Law [196590003] Notinctionwithstanding the distinction Above, at least some Arizona courts have compared appraisal clauses with insurance arbitration clauses. This comparison probably comes from the fact that traditionally little attention has been paid to assessment as a distinct process, despite the clear differences. I Home Indemnity Co. v. Bush for example, division one of the Arizona Court of Appeals interpreted an appraisal clause in a car policy as an "appraisal and arbitration clause," despite the lack of language in the clause characterizing it as one that includes arbitration. But nothing in the Bush Court's opinion suggests that it (or the parties) even considered whether there could be a difference between the two processes.

Some twenty years later, in Meineke v. Twin City Fire Insurance Co. On the basis of a single Maryland case, the same Court of Appeal concluded that, despite differences between assessment and arbitration, the proceedings are analogous. The Court further referred to a decision in Arizona of 1978, Hirt v. Hervey for the assertion that the decisions of valuers are entitled to the corresponding measure of finality given by the arbitrators, and to an opinion of 1986 in Hanson v. Commercial Union Insurance Co. to propose that courts, in view of the similarities between assessment and arbitration proceedings, should apply the standard of review applicable in arbitration proceedings to those relating to assessment. However, the courts' conclusions failed to establish exactly how arbitration and assessment are "analogous", nor did the court Meineke identify or discuss the differences that it admitted existed between the trials. 3

Consequently, there was a proposal that a legislative measure could address these issues:

Arizona, like many states, has adopted a general statutory property insurance system, which has no valuation provisions. This oversight is particularly problematic for Arizona policyholders given the lack of customary law regarding these issues in the jurisdiction. As a result, the terms of their policies determine how the assessment is to be conducted and judges selected. Critics suggest that leaving the contours of the appraisal process to summarize contractual provisions drawn up by insurance companies and included in connection contracts makes it possible for insurers to benefit more from the appraisal settlement. On the other hand, if the state legislator, rather than the insurer, were to give a clearer form to the assessment and choice of judges, this effort would most likely help to minimize any prejudices currently present in the assessment process and better influence public policy objectives. of valuation. A clear statutory system would also benefit lawyers, as not only courts misunderstand the relationship between assessment and arbitration. In fact, many cases where courts intuitively apply arbitration principles to assessment problems are caused by a party invoking the protection of arbitration in the first instance. panels. What is meant by Arizona's assessment laws is governed by Arizona's arbitrators has not been fully decided.

Thought for the day

Life is full of confusion. Confusion of love, passion and romance. Confusion of family and friends. Confusion with life itself. What path we take, what turns we make. How we roll our dice.
—Matthew Underwood
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1 Commissioner Conway was quarantined after a possible exposure to Covid.
2 SafecoKleins v. Co. of America No. 20-2432 2021 WL 3518639 (D. Ariz. March 31, 2021).
3 Amy M. Coughenour. Evaluation and Real Estate Insurance Appraisal Clause – A Critical Analysis: Guidance and Recommendations for Arizona . 41 Ariz. St. L.J. 403 (summer 2009).


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