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Important New Update Regarding Insurance Appraisals

Important New Update Regarding Insurance Appraisals

December 17, 2021 | 3 min read

Important New Decision on Scope of Insurance Appraisals

An Update from Burg Simpson Shareholder Tom Henderson:

The 10th Circuit Court of Appeals recently issued a decision that clarifies the scope of what may be decided in insurance appraisals. For many years the debate has raged in Colorado and elsewhere about whether the insurance appraisal process can decide the question of what caused a loss. The answer is now known. In Colorado, the answer is: Yes.

As is often the case in hail loss claims, the insurance company will argue that hailstorms that pre-dated its coverage, or wear and tear, deterioration and/or improper installation (all excluded losses) caused all or some portion of the loss. Although virtually all insurance policies include a built-in dispute resolution mechanism known as “appraisal” that either side can elect to use to resolve disagreements over the “amount of loss”, the insurance industry has long taken the position that appraisal cannot be used to determine the cause of the loss being evaluated. In other words, the appraisers (and the third party “umpire”) were prevented from deciding whether the hail loss was caused by hail during that insurer’s policy period, and whether the loss actually resulted from wear and tear, etc. The 10th Circuit Court of Appeals has now decided that, since “causation is an ingredient of loss”, the appraisers (and umpire) can decide questions of causation as part of their duty to determine the “amount of loss”.  See Bonbeck Parker, LLC v. Travelers Inedm. Co. of America, 14 F.4th 1169 (10th Circ. 10/1/2021).

This decision is significant because it now means that policyholders that find themselves in disputes with their insurance companies over values of a loss to their property, whether caused by hail, water, fire, or other calamity, can use the appraisal process to resolve disputes that involve questions of what caused the loss that is the subject of the insurance claim, as well as arguments over how much should the insurer be paying for that loss.

About Shareholder Tom Henderson

Burg Simpson shareholder Tom Henderson focuses his practice on representing policyholders in suing insurance companies for bad faith and getting insurance companies to pay what the insurance policy promises to pay. Tom spent the first 20 years of his practice representing the insurance companies, answering their questions about whether the policy provided coverage for various claims, and even defending them when they were sued. He has spent the past 12+ years of his practice exclusively representing business insurance policyholders pursuing claims for insurance benefits owed by the insurance industry.

About Burg Simpson Eldredge Hersh & Jardine

One of America’s foremost plaintiff trial firms, Burg Simpson Eldredge Hersh & Jardine,  has a longstanding and nationwide reputation for fighting relentlessly and successfully for victims of negligence, malfeasance, malpractice, and abuse. Our attorneys have never hesitated to fight for our client’s rights and consistently face and defeat formidable adversaries that include big insurance companies, big banks, and big pharma.  Burg Simpson has secured more than $1 billion in verdicts, settlements, and judgments in practice areas spanning catastrophic personal injury, mass tort and class actions regarding gas explosions, dangerous pharmaceutical drugs and devices, medical malpractice, complex commercial and business litigation, construction defects, and workers’ compensation. The firm’s success has also included more than 200 recoveries in excess of $1 million.

Burg Simpson was founded in 1976 and now has more than 75 lawyers and over 90 legal professionals. The firm is based in Colorado and has offices in Arizona, Florida, Nevada, New Mexico, Ohio, California, and Wyoming.

Contact Tom Henderson at Burg Simpson at 888 895 2080