Insured Only Allowed One Appraisal

Insured’s Post-Appraisal Estimate Cannot Be Considered

An appraisal is a contractual obligation in a first party property policy that allows the insured and insurer to resolve the amount of loss when the insured and insurer cannot agree.  When an insured did not agree to the award he found a contractor who opined after the appraisal award became final that the roof repair required complete replacement of the roof because of a local statute. The insured demanded a second appraisal five years later. The trial court disagreed and the issue was presented to the Florida Court of Appeal in Orlando Noa, Appellant, v. Florida Insurance Guaranty…, District Court of Appeal of Florida, Third District, — So.3d —-, 2017 WL 1076922 (March 22, 2017).


Mr. Noa obtained residential insurance coverage through First Home Insurance Company (“First Home”). In October 2005, with the policy in full force and effect, Hurricane Wilma damaged the residence. Mr. Noa submitted a claim to First Home. In December 2005, First Home advised Mr. Noa that the damages did not exceed the policy deductible of $4,392.00.

Over three years later, in August 2009, Mr. Noa submitted a second claim to First Home relating to the same residence, policy, and windstorm. This claim, detailed in a sworn statement and proof of loss form, was for $71,682.97, exceeding the deductible by $67,290.47. First Home rejected the claim and invoked the appraisal clause in the policy.

Mr. Noa’s appraiser, the insurer’s appraiser, and an umpire selected by the party appraisers, each evaluated the loss. The umpire and the insurer’s appraiser agreed on an actual cash value of the claim in April 2010, of $17,602.10. That computation allowed $3,780.00 for the replacement of 120 roof tiles, $1,200.00 for repair of the underlayment beneath the affected area, and $4,360.00 for treatment of the entire roof after installation of the new tiles to provide a color match. The 120 tiles comprised approximately 3% of the 3,200 square foot roof.

Less than a month after the appraisal award was entered and First Home paid the award amount (less the deductible) to Mr. Noa, a roofing contractor selected by Mr. Noa submitted a permit application to repair 30% of the roof with “current leaking,” reflecting a price of $8,700.00. The permit application was rejected by the building and zoning authority, as Miami-Dade County’s building code requires that not more than 25% of the total roof area can be repaired, replaced, or recovered in any twelve month period unless the entire roofing system or roof section complies with the current code. The contractor then prepared, and Mr. Noa signed, a contract for the full roof for $26,000.00. Mr. Noa submitted the contract to First Home with a request to fund the additional amount required as a result of the ordinance requirement.

First Home denied the full-roof additional claim, and in 2011 Mr. Noa sued in an effort to recover the differential amount of that post-appraisal claim.


“Ordinance and Law” coverage provides additional reimbursement to the insured, in amounts and on other terms specified in the insurance policy, to cover costs necessary to meet applicable laws and ordinances regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris.

Appraisers are charged with determining the amount of the loss when an insurer admits there is a covered loss and there is a disagreement regarding the amount of the loss. In order to perform competently as an appraiser for this purpose, and to be designated by a party or by other appraisers or the court (as an umpire), logic and common sense require that an appraiser must have experience in the estimation of materials and labor costs for the repair and replacement of damaged property. In the case of roof work, appraisers must consider the requirements of the applicable building codes in order to estimate the cost of repair or replacement.

The appraisal provision in the present case sufficed to leave these issues to the appraisal panel, not the court. This explains the notation on the appraisal award that “Law & Ordinance” was not appraised. The notation surely cannot mean that the appraisal is subject to circumvention a month later if the insured can just find a roofing contractor to sign a proposal stating that 30%, not the 3% found by the appraisers, of the roof needs replacement.

To hold otherwise would allow the insured’s post-appraisal roofing contractor to step into the adjustment process as a super-umpire whose opinion supersedes the appraisal and requires a new round of valuation estimates. If the insured intends to offer a roofer’s professional opinion that the applicable building code will require replacement of the entire roof, not just 3% of the area of the roof, the appraisal process must surely be the time to offer that evidence—not as an afterthought on the heels of the appraisal.


This case is a perfect example of the old Aesop Fable of the sour grapes. Mr. Noa submitted to appraisal and was upset by the result so he found a roofer who was willing to say the damage required more than 25% of the roof needed to be replaced which, by local statute, required full replacement of the roof. The court of appeal correctly found that the evidence needed to be presented to the appraisal panel and the insured does not get a second appraisal because he didn’t like the first award.

ZALMA-INS-CONSULT                      © 2017 – Barry Zalma

This article and all of the blog posts on this site summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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