On September 26, 2008, the 5th DCA clarified an important point regarding the appraisal process. In Wroe v. Amica Mutual Insurance Company, the insured owner of a vehicle sued his own insurance company under his collision coverage. The insured was looking to force the insurance company to pay for repairs to his vehicle after an accident. The case was referred to appraisal, and the appraisal panel determined the amount of loss. In a very short opinion, the 5th DCA made clear that the insured is allowed to seek additional money from the insurance company if hidden damage that was not accounted for in the original appraisal is discovered during the course of repairs.
This is an extremely important decision. Many times, an insurance company will claim that the insured gets one shot at an appraisal, and that appraisal is a final determination of the entire claim. The insurance company will then refuse to pay for hidden damage that was not accounted for during the initial appraisal. This damage is hidden because, in many cases, the full extent of the damage can not be determined until the repairs begin. The insurance industry is well aware of hidden damage such as this, and routinely provides what are known as "supplements" to the insured if additional damage is discovered during the repair process.
However, once there is a dispute, and the claim goes to appraisal, the insurance industry often takes the position that the appraisal is final, and there can be no supplements. In Wroe, the 5th DCA makes clear that if there is further unaccounted for damage discovered after the repairs begin, the insurance company will be responsible.
There are two takeaways from this opinion. First, never sign a release after the appraisal. Such a release may preclude an insured from seeking further money if further damage is discovered. Second, make sure to alert insureds to contact you immediately if further damage is discovered during the repair process. This further damage will need to be documented and the insurance company alerted immediately.