In Florida Insurance Guaranty Association, Inc. v. Castilla, ____ So.3d. ____, (Fla. 4th DCA September 30, 2009), the insureds submitted a Hurricane Wilma claim to their homeowners insurer. The insurer paid a portion of the claim, and refused to pay any more. The insurer then went into liquidation at which point the claim was taken over by FIGA.
The insureds then submitted the claim to FIGA. (This was smart because the only way to obtain attorneys fees from FIGA is if FIGA denies a claim through "affirmative action." See, Fla. Stat. 631.70) FIGA then refused to pay the claim.
The insureds filed suit, and in its response FIGA asked for appraisal. FIGA also requested that the court dismiss/abate the lawsuit and compel appraisal. The 4th DCA opinion characterized the insured’s position as asserting that FIGA waived its right to appraisal by "denying their claim without reserving any rights under the insurance policy."
The trial court denied the request for appraisal, and the circuit court sitting in its appellate capacity affirmed. The 4th DCA granted certiorari and reversed, stating:
FIGA never acted inconsistently with its right to an appraisal, having raised that right at the earliest opportunity in this suit and continued to claim it through its subsequent pleadings. Asserting that the insured meet all other conditions precedent to claiming a loss is not inconsistent with demanding an appraisal. Claiming that the loss is not covered is also not inconsistent with a demand for appraisal.
From the opinion, it is unclear if FIGA simply refused to pay more money on a covered claim – thus bringing about a dispute as the amount of the loss; or if FIGA denied coverage for the claim. Appraisal is appropriate where there is a dispute as to the "amount" of a claim, but is generally not appropriate where there is a denial of coverage.