Mississippi Does Not Allow Causation to Be Determined In Appraisal

Hurricane Sally appears headed to the Mississippi Sound and Louisiana. Adjusters already working Hurricane Laura claims will be shifting efforts to Hurricane Sally. While there is legal authority suggesting that causation can be determined in Louisiana appraisals,¹ Mississippi has long held that causation issues will not be allowed in appraisal and that a lawsuit will have to determine those issues.²

We noted this rule in a 2013 post, Snap Shot of Mississippi Appraisal Provisions in Insurance Policies. Since then, another Mississippi federal court has indicated that causation and coverage issues are not to be appraised in Mississippi, implying that causation is a coverage issue:³

It appears from the limited record and information provided that the primary dispute between the parties is the cause of the alleged property damage to Plaintiff’s home. Defendant maintains that a covered peril caused only minor property damage to Plaintiff’s home, while Plaintiff argues that a covered peril caused significant damage to his home. This presents a coverage issue, as opposed to only a valuation issue.

The purpose of an appraisal provision in a property insurance policy is not to determine the cause of the loss….An appraiser’s power is limited to determining the money value of property…Plaintiff has not demonstrated that compelling an appraisal is proper under the circumstances. Plaintiff’s Motion to Compel Appraisal and Appoint Umpire should be denied, and Plaintiff’s Motion to Stay Litigation Pending Outcome of Appraisal should be denied as moot.

If you wish to study more on causation issues in appraisal, I suggest you read,
Ashley Harris Cited by Iowa Supreme Court Regarding Causation Issues in Appraisal Proceedings, and Ashley Harris’ law review on the topic, Property Insurance Appraisal: Is Determining Causation Essential to Evaluating the Amount of Loss.⁴

Thought For The Day

New Orleans lives by the water and fights it, a sand castle set on a sponge nine feet below sea level, where people made music from heartache, named their drinks for hurricanes and joked that one day you’d be able to tour the city by gondola.
—Nancy Gibbs
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¹ St. Charles Parish Hosp. Service Dist. No. 1 v. United Fire and Cas. Co., 681 F.Supp.2d 748 (E.D. Louis. 2010).
² Munn v. Nat’l Fire Ins. Co. of Hartford, 237 Miss. 641, 115 So.2d 54, 58 (1959); Sunquest Properties, Inc. v. Nationwide Property and Cas. Co., No. 1:08-cv-687, 2009 WL 2567222 *2 (S.D. Miss. 2009).
³ Jassby v. Scottsdale Ins. Co., No. 1:13-cv-336, 2014 WL 3773564, at *1–2 (S.D. Miss., July 30, 2014).
⁴ Ashley Harris. Property Insurance Appraisal: Is Determining Causation Essential to Evaluating the Amount of Loss. 2012 J. Disp. Resol. 591.