New Case on Appraisal and O&L Coverage

An insureds’ post-appraisal submission of increased costs in support of an ordinance and law claim is not a legally sufficient basis for reopening the appraisal or conducting a new one. In Noa v. FIGA, No. 3D16-1367 (Fla. 3d DCA Mar. 22, 2017), appraisal was invoked and the umpire and insurer’s appraiser agreed on payment for the replacement of approximately 3% of the insured property’s roof. The award specifically stated that it did not include an allowance for ordinance and law. After the award was entered, the insured requested an additional amount for ordinance and law based upon newly submitted documentation, including a permit application prepared by a roofing contractor to repair 30% of the roof as well as Miami-Dade County’s rejection of the application based upon the County’s building code which prohibited repair of more than 25% of the total roof area. After the insurer denied the “supplemental” claim for full roof replacement, the insured filed suit to recover the post-appraisal differential. As the insurer became insolvent, FIGA was substituted as a defendant and the trial court denied the insured’s motion for a new appraisal. This appeal followed.

In upholding the trial court’s decision, the Florida Third District Court of Appeal noted that “logic and common sense” require that appraisers possess experience in the estimation of materials and labor costs for the repair and replacement of damaged property, and in the case of roof work consider the applicable building codes in order to estimate such repair and replacement. Such expertise should be “baked into” computations and not left open for a re-appraisal or a determination by a court. This explained the notation on the appraisal award regarding law and ordinance, as the majority of the appraisal panel concluded that it did not apply since only 3% of the roof area was to be replaced, rather than 25% or more. What this notation did not mean was that after the appraisal was concluded the insured could find a roofer to prepare a proposal for a total roof replacement. The Court concluded that “to hold otherwise would allow the insured’s post-appraisal roofing contractor to step into the adjustment process as a super-umpire whose opinion supersedes the appraisal and requires a new round of valuation estimates.”