§ 3.28 Conditions - Appraisal

• Library: Guide to South Carolina Liability and Property Insurance Law (SCBar) (2019 Ed.)

§ 3.28 Conditions - Appraisal

The federal district court addressed whether the parties were required to engage in an appraisal of the amount of loss before the lawsuit could be filed in Vagish, LLC v. Seneca Specialty Insurance Co.¹⁵³ The court explained the following policy provisions were relevant to determining this issue:

We will pay for covered loss or damage within 30 days after we receive the sworn proof of loss, if you have complied with all of the terms of this Coverage Part and:

(1) We have reached agreement with you on the amount of loss; or
(2) An appraisal award has been made.
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No one may bring a legal action against us under this policy unless:

1. There has been full compliance with all of the terms of this policy; and
2. The action is brought within 2 years after the date on which the direct physical loss or damage occurred.¹⁵⁴

The court explained that was "an ample supply of similar cases concluding that, when there has been a timely appraisal demand, the case should at least be stayed pending an appraisal of the amount of loss," and therefore, "the issues for this Court are whether an appraisal is necessary (i.e. whether there is an agreement on the amount of loss), whether there has been a timely appraisal demand, and if so, whether the case should be dismissed or stayed pending the appraisal."¹⁵⁵

The court rejected the insured's argument that the insurer's silence regarding the amount of the loss did amount to consent by the insurer because "there [wa]s no indication that [the insurer] intended its silence as to the amount of loss to be interpreted as an agreement...