The Tenth Circuit determined that the Colorado Supreme Court would agree with other state courts that appraisers can decide the causation of a loss. Bonbeck Parker, LLC v. The Travelers Indem. Co. of Am., 2021 U.S. App. LEXIS 29607 (10th Cir. Oct. 1, 2021).      A hailstorm damaged three buildings owned by BonBeck. A claim was submitted to Travelers under BonBeck's commercial property policy. Travelers acknowledged that some hail damage occurred to all the buildings except for the roofs. Travelers paid $34,200 for damage to the buildings. Coverage for the roof damage was denied because it resulted not from the hail damage but from uncovered events like wear and tear, deterioration, and improperly installation.      BonBeck requested an appraisal. Travelers insisted that the appraisal would only determine the amount of loss of covered claims. BonBeck rejected these conditions and Travelers filed suit.     On the first round of summary judgment motions, the district court sided with BonBeck, concluding that the appraisal provision authorized the panel to make cause-of-loss determinations. The appraisal then took place and the panel estimated the total loss from hail damage to be about $216,000. Travelers paid BonBeck the appraisal award, minus the $34,000 it had already paid.     In a second round of motions for summary judgment, the court again agreed with BonBeck that Travelers had breached the policy by not agreeing to an appraisal. The district court awarded BonBeck nominal damages of $1 and statutory interest of $36,142.63. Travelers appealed.     The appraisal provision stated, in part, If we and you disagree on the value of the property, the amount of Net Income and operating expense, or the amount of loss, either may make written demand for an appraisal of the loss. . . If there is an appraisal, we will still retain our right to deny the claim.     The district court focused on the first sentence, which stated a party could request an appraisal based on "the amount of loss." The district court determined that "the amount of loss" encompassed causation disputes. Dictionary definitions of "loss" all included a causation component, making clear that "loss" refers to damage resulting from a covered event.     The Tenth Circuit concluded that the Colorado Supreme Court would join other courts in recognizing that in the insurance context, the ordinary meaning of the phrase "amount of loss" encompassed causation.     Travelers argued that allowing the appraisal panel to determine what caused BonBeck's damage prevented Travelers from later denying coverage based on its view that something other than the hailstorm caused the damage. The court disagreed. The last sentence  of the appraisal provision covered Travelers' right to deny a claim after an appraisal. For example, Travelers could still deny coverage for failure of the insured to provide prompt notice or to cooperate.     Therefore, the Tenth Circuit affirmed the grant of summary judgment to BonBeck.     Thanks to Robert Joslin, Hawaii Public Adjusters, for flagging this case.       

from Insurance Law Hawaii https://ift.tt/3ceQSDa