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Standards for Determination of Causation in Appraisal

By Catherine A. Mondell and Seth C. Harrington

An appraisal provision is a common feature of first-party property insurance policies, designed principally to efficiently resolve disputes over the amount of loss or replacement cost for a covered claim. However, disputes over what constitutes an appropriate topic for appraisal can negate the efficiencies that might otherwise be gained.

Most jurisdictions have tried to settle the appropriate boundaries of appraisal by developing law to distinguish between issues of damages (or quantum), which are appropriate for appraisal, and issues of liability (or coverage), which are reserved for resolution by the courts. Disputes remain, however, with respect to certain issues that straddle the line between these two categories. Chief among these is the issue of causation.

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