Connecticut Supreme Court Rules that Scope of Damage is Subject to Appraisal on a Covered Loss
NAPIA is pleased to report the significant ruling from the Supreme Court of Connecticut in the case of Karl Klass v. Liberty Mutual Insurance Company.A unanimous Supreme Court issued a published, precedential opinion essentially confirming that scope of damage is subject to appraisal on a covered loss. NAPIA General Counsel Brian Goodman, along with local lawyer Karen Dowd, wrote an amicus curiae brief in support of the insured's position in this case, which revolved around Connecticut's matching statute. The carrier had agreed that this was a covered loss, but then tried to argue that questions of matching were truly coverage questions which had to be litigated in court rather than being subject to the faster and less costly alternative of appraisal. The Supreme Court rejected this argument and held as follows:
When an insurer concedes the existence of a covered peril to an insured's premises, issues concerning the extent of the insurer's obligations under sec 38a-316e (a) to replace adjacent, undamaged items to achieve a reasonably uniform appearance are a component of the amount of loss and are, therefore, part of the appraisal process.
What happened here, and what has been occurring in other jurisdictions, is that carriers are trying to make factual determinations of damage into "coverage " questions that must be litigated, at great cost and inconvenience to the insured. The Connecticut Supreme Court strongly disagreed, ruling that "the necessarily fact intensive, case by case inquiry inherent in the task of matching requires that appraisers be afforded discretion in making matching determinations."
The case is important in that it reaffirms that scope of damage is subject to appraisal and is a major victory for policyholders in preventing the time consuming and costly alternative of litigation on a clearly covered claim. NAPIA was proud to participate in this case. Thanks Jon Biller, Esq. whose firm represented the insured.
To view the ruling click on Karl Klaus v. Liberty Mutual Insurance Company.