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Insured Not Entitled to Appraisal Where Coverage Denied

In OCEANIA I CONDO ASSOCIATION, INC. v. QBE INSURANCE CORP.,  23 Fla. L. Weekly Fed. D9a (S.D. Fla. May 20, 2011), Judge Patricia A. Seitz (Case No. 11-20578-CIV-SEITZ/SIMONTON) found that an insured is not entitled to appraisal, where coverage for a hurricane claim has been denied in its entirety because insurer has unequivocally stated that no coverage is available under policy and that policy is void. The judge further found that because the issue of whether claim is covered by policy is a question for judicial determination, when the claim has been denied in its entirety based on lack of coverage, appraisal is not appropriate because QBE has declared the policy void, there is no covered claim and therefore the parties cannot disagree over the amount of any covered claim.

Prior to this decision, there had been numerous insureds arguing that because the insurer assigned a claim number to the loss, investigated the loss, and initially acknowledged insurance coverage for the loss in an amount determined to be less than the policy deductible, if the insured disagrees as to quantum, the insured should be entitled to seek appraisal. However, the distinguishing characteristic in this case is the fact that the policy in this instance was void and thus, there could be no disagreement over the amount of the claim, only whether the loss was covered or not.

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