Background
Citizens Property Insurance Corporation appealed a trial court order denying its motion to compel appraisal in a first-party property insurance dispute with Elizabeth Diaz. Citizens had demanded appraisal of a covered loss on July 30, 2024, asserting that it and the insureds disagreed about the amount of the loss. The trial court, finding Citizens’s appraisal demand deficient, denied the motion to compel.
The Court’s Holding
The Third District affirmed the denial of Citizens’s motion to compel appraisal. The court found that Citizens’s July 30, 2024 written demand plainly failed to comply with the homeowner’s insurance policy’s explicit requirement that an appraisal demand “shall include an estimate of the amount of any dispute that results from the covered cause of loss.” The policy further required that the estimate include a description of each damaged item, the extent of damage, and the estimated amount to repair or replace each item.
The court held that the right to appraisal is created by contract and cannot be triggered until both parties have complied with their contractual obligations. Because Citizens did not provide the required estimate when making its demand, it had not satisfied the conditions precedent to compel appraisal.
Key Takeaways
- Appraisal demands must include detailed estimates of the disputed amount to trigger the appraisal process.
- Insurance policies’ contractual requirements are strictly enforceable, and failure to comply defeats appraisal rights.
- Both parties must satisfy contractual conditions before appraisal can be compelled.
Why It Matters
This decision reinforces that property insurers cannot unilaterally trigger appraisal without meticulous compliance with the policy’s procedural requirements. The requirement to estimate the disputed amount serves to narrow the issues and ensure both parties understand the scope of disagreement before entering the appraisal process.
For insurers and their counsel, strict adherence to appraisal demand language is essential. Even a technical shortcoming—such as failing to provide the required estimate—can result in loss of appraisal rights. Conversely, insureds can use this decision to challenge appraisal demands that lack the specificity required by the policy.