A federal court recently held that ongoing insurance coverage issues should not prevent an appraisal from going forward as per an appraisal clause in the insurance policy. In DC Plastic Products Corp. v. Westchester Surplus Lines Insurance Co. Case No. 17-13092 (D.N.J. May 19, 2021), the District Court of New Jersey directed the parties to proceed with the appraisal process as set forth in the relevant policy, despite the defendant-insurer’s argument that appraisal is improper under New Jersey law where unresolved coverage issues exist. Plaintiff DC Plastics Products Corporation (“DC Plastics”) made an insurance claim to its insurance carrier Westchester Surplus Lines Insurance Co. (“Westchester”) after DC Plastics’ premises in Bayonne, New Jersey was damaged as a result of Superstorm…
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New Jersey Federal Court Holds That Insurance Coverage Issues Do Not Need To Be Decided Before Appraisal
Posted in Causation, Causes of Loss, Valuation
Pennsylvania District Court Holds Materiality Does Not Require Fraud
A District Court in the Eastern District of Pennsylvania recently held that an insured’s submission of invoices altered to inflate replacement costs for water-damaged inventory constituted material misrepresentations. The court granted the insurer’s motion for summary judgment on its claims for declaratory judgment and violation of the Pennsylvania Insurance Fraud Act; however, the court held that the altered invoices fell short of satisfying the elements of common law fraud. About The Authors
Posted in Bad Faith
Failure of Insured to Provide Requested Documents Triggers Appraisal Under First Party Insurance Policy
Those familiar with first party insurance policies have undoubtedly encountered a recurring issue with the interpretation of appraisal provisions – what does it mean to disagree on the amount of loss? In Valvano Realty Co. v. American Fire and Casualty Co., the United States District Court for the Middle District of Pennsylvania recently held that a disagreement on the amount of loss encompasses situations where an insurer claims it needs additional documentation before it can determine whether a disagreement exists. Valvano involved a December 18, 2015 fire at the Plaintiff’s property in Dickson City, Pennsylvania, which was insured by American. American’s adjuster, working with a retained construction consultant and structural engineer, determined the replacement cost value of the loss to…
Posted in Actual Cash Value, Arbitration and Appraisal
