Attorneys Alex Jadin, Tony Smith, and Tim Johnson won another case before the Minnesota Supreme Court in the matter of Poehler v. Cincinnati Insurance Company. This case involved whether a policyholder could recover interest on an insurance appraisal award when an insurance company undervalues a claim.
An insurance appraisal is an alternative dispute resolution mechanism available under most homeowner’s insurance policies. When an insurance company undervalues a claim, a policyholder can demand an insurance appraisal to resolved the disputed amount of loss. Many times, that process takes months (or even years) before a policyholder is made whole. RSJ argued that when an insurance company undervalues a claim and the policyholder receives an appraisal award greater than the insurance company’s offer to settle the claim, then the policyholder should be entitled to interest on that award under Minnesota’s prejudgment interest statute, Minn. Stat. § 549.09.
The insurance company argued that policyholders should not be entitled to interest, no matter how much the insurance company initially undervalued the claim. The Minnesota Supreme Court disagreed. It agreed with RSJ and ruled in favor of the policyholder. It found that Minn. Stat. § 549.09 “unambiguously applies” to allow policyholders to recover interest on appraisal awards.
This is a monumental decision for Minnesota policyholders. Now, when an insurance company undervalues a claim, the policyholder will be entitled to recover interest on an appraisal award. This will incentivize insurers to make fair claim valuations from the outset, because if they do not, then the insured will be able to recover the value of the claim plus interest. Not only is this a fair result, but it will help offset the costs of pursuing the insurance company when it undervalues a claim.
If you have recently gone through the appraisal process or believe that your insurance company has undervalued your claim, you should reach out to RSJ today to discuss how we can help you get a fair result.