Is There a “Total Loss”?—Not an Insurance Appraisal Panel Decision

28 Mar

In Auto-Owners Insurance Company v. Second Chance Investments, LLC, a decision released March 20, 2013, the Minnesota Supreme Court held that under the Minnesota standard fire insurance policy, the question of whether there is a total loss is not a question that can be determined by the an appraisal panel.

The Minnesota standard fire insurance policy is really a statute defining the minimum that fire insurance policies can provide and is found at Minn. Stat. 65A.01, subd. 1.  In that statute, there is an appraisal provision for determining what the amount of loss is, which requires that such an issue be determined by an appraisal panel (typically three people: one chosen by the insured, one by the insurer, and one by the two chosen by those respective party), if requested by the insurer or the insured.  See Minn. Stat.  65A.01, subd. 3. Minn. Stat. § 65A.01, subd. 3.  However, that statutory provision contains an important clause that reads “except in case of total loss on buildings.”  The Minnesota Supreme Court recognized that language and held that an appraisal panel can’t determine whether there is a total loss.  The full opinion can be read here.

Obtaining an appropriate insurance settlement is often not an easy task.  As this case exemplifies, there are many details of and aspects to insurance policies, claims, and recovery.  Insureds should contact an attorney to ensure that they are properly submitting a claim and that the processes in relation to that claim are not being abused or improperly foreclosing relief.  Contact a member of the Thomsen Nybeck litigation team  with insurance-specific experience to help advise you.

This blog entry is written by Chris Renz, a shareholder at Thomsen Nybeck. Chris practices in the litigation area of the firm with primary focus on real estate litigation, employment litigation, insurance law, townhome and condominium law, and criminal law.


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