Appraisal Law: Ice Cube Building LLC v. Scottsdale Ins. Co.

Recently, the Connecticut Federal District Court addressed the issue of whether a court can compel parties to appraisal over an issue of coverage dispute. The case, arising out of contested property damage resulting from a snow or ice storm, reinforces that insurance appraisals address disputes relating to the “value of the property” or the “amount of loss” rather than a dispute over coverage. The Court denied the Insured’s motion to compel appraisal “[b]ecause the Policy expressly provides for the arbitration of disputes related to the value or quantum of a loss suffered – not the rights and liabilities of the parties under the Policy – and the Court may only compel the parties to arbitrate matters ‘which they have agreed to arbitrate under the provisions of their insurance policy.”

More importantly, the Court’s decision reinforces that insurance appraisals are governed by the arbitration laws in the State of Connecticut. Thus, when attending an appraisal, the parties must not only extricate any disputes over coverage, but must also assure that the appraisal is in compliance with Connecticut’s arbitration statutes.