Last year the Minnesota Court of Appeals held there is no deadline to demand appraisal. For years, insurers argued that any deadline to serve a lawsuit was also the deadline to demand appraisal. The Court of Appeals, in an opinion that is binding precedent, held that is not so. The deadline to sue is not a deadline to demand appraisal. So long as a suit is filed, appraisal can be demanded later.
There are other important deadlines for appraisal. When a property owner names an appraiser, the insurance company must name an appraiser within twenty days. The appraisers must then select an umpire within 15 days. You can read these deadlines in the Minnesota Standard Fire Insurance form policy language found in the Minnesota statutes. Here is a link to this statute. I recommend that you use the find function to jump down to the appraisal clause that contains these deadlines. The deadlines are contained within the paragraph that begins, “[i]n case the insured and this company…”.
There is another deadline found within this statute applicable to appraisal: the insurance company’s deadline to pay on an appraisal award. According to Minn. Stat. § 65A.01 subd. 3, the deadline is 60 days. However, another statute within the Minnesota Unfair Claims Practice Act states the deadline is only 5 days. That deadline is typically found within Minnesota insurance policies.
If the insurance company does not follow these three deadlines, they have breached the contract. Insurance policies are regarded as contracts in the State of Minnesota notwithstanding the fact some of the policy is written by the Legislature. The penalty for failing to nominate an appraiser within 20 days is either a court of law nominating an appraiser for the insurer, or no appraiser at all. Some courts have held that failure to nominate an appraiser is a waiver of the right to have an appraiser on the panel. See Itasca Paper Co. v. Niagara Fire Ins. Co., 175 Minn. 73, 220 N.W. 425 (Minn. 1928). That is an important principle to keep in mind if the 20-day deadline is missed.
Appraisal panels often impose a 7-day or 10-day deadline to submit documents for appraisal to the appraisal panel. These deadlines are enforceable too as the appraisal panel has the power to create and enforce these rules. Appraisal panels can refuse to accept exhibits and documents if this deadline is not met. However, I do not think this deadline should preclude either party from offering new documents at an appraisal hearing to rebut documents from the other party. Without that right there is no right to cross-examine and rebut insurance, and evidence.
Feel free to contact me should you have any questions about these deadlines. You can reach me at: ed@beckmannlawfirm.com.
Ed