People read this blog to learn and keep up with the most important aspects of property insurance law. The Louisiana legislature just passed state statutes regulating appraisal. The legislation is now in front of the Louisiana governor for approval before becoming law. I am certain that this topic will be thoroughly discussed at the Insurance Appraisal and Umpire Association (IAUA) event to be held in Chicago on June 19-20.
The IAUA events often feature Steve Badger debating with me about issues of appraisal and property insurance. In an attempt to help level the playing field by raising the bar and give Badger a rest so he can reflect upon his rhetoric, the IAUA has obtained the noted Chicago-based property insurance company defense attorney Matt Ponzi to debate and discuss appraisal issues with two Merlin Law Group Chicago based attorneys, Christina Phillips and Ed Eshoo. This panel represents over a hundred years of combined experience regarding Illinois property insurance law. You will not find three more experienced attorneys regarding Illinois property insurance speaking about appraisal issues at the same time. I am showing up to learn and hope you will as well, especially if you are doing anything in and around Illinois.
Are appraisal regulations coming to your town? I must give Matthew Monson credit for pushing and obtaining legislation regarding appraisal in Louisiana. I have not been in favor of the need for this and have a lot of criticism of the legislation if it is signed by Louisiana’s governor. In “Louisiana 2023 Legislative Scorecard, Part Two – What failed to pass?” we noted that previous legislation did not pass. A year ago, I expressed that the proposed and failed Louisiana legislation was not helpful in Louisiana Bill Proposes To Codify All The Rules of Appraisal. I stated, in part, my concern:
I have often said that appraisal is the Wild West of insurance claims resolution because there are no written rules…
Are We Better Off With No Written Rules When It Comes To Appraisal Other State Common Law?
In a way, the proposed law is trying to prevent people from having any conflicts of interest as an appraiser or umpire. The pool of available and experienced appraisers and umpires is going to be pretty small as I read the bill. The parties will have inexperienced people trying to resolve disputed property insurance claims because the experienced ones will be conflicted out of participating as the current proposed law is written.
The proposed Louisiana law seems to contemplate that the only losses are those to real property because there is no provision for appointing accountants in a business interruption suit, coin experts regarding the value of collectible coins, etc. The drafter obviously has little experience regarding the variety of losses that are disputed.
A very similar bill has now passed the legislature. While it has some language that helps make appraisal better, it is extremely flawed. It will hurt policyholders and insurers. If passed, I will explain why this Louisiana law is such poor public policy and why such legislation is very ignorant and severely amateurish about the complexities of insurance disputes, which are resolved through appraisal. If passed, it should not be copied in other jurisdictions.
Still, the question remains: Will similar legislative efforts regarding appraisal be made in other states? Louisiana sets a precedent, begging for an answer to this question regardless of whether the legislation is passed or not. For that reason, insurance defense attorney Matthew Monson should get credit for initially pushing this agenda of appraisal reform through legislation, whether we agree with it or not.
Thought For The Day
Professionals stick to the schedule; amateurs let life get in the way.
—Jeff Haden
