Court May Defer Sending Fire Claim For An Appraisal.

In a class action brought by victims of fire losses, plaintiffs contend the insurance company followed illegal adjusting practices contrary to Insurance Code section 2051, subsection (b), which permits “reasonable deduction for physical depreciation based upon its condition at the time of injury.” As examples, they submitted claims for a 10-year-old set of lead crystal longchamp wine glasses with a replacement value of $82.13, which the insurance company calculated as having an actual cash value of 82 cents. Similarly, plaintiffs claim a 20-year-old solid walnut china buffet with a replacement cost of $1,594,32 was calculated as having a cash value of $15.94 by the insurance company. Their complaint also alleges claims for declaratory relief, unfair competition under Business and Professions Code section 17200, breach of contract and bad faith. In the trial court, the insurance company moved to compel an appraisal, which “in an insurance policy constitutes an agreement for contractual arbitration.” The request for an appraisal was denied without prejudice for the insurer to renew its motion later during the litigation, after the trial court decided various legal issues which appraisers may not decide. The appellate court affirmed, finding the trial court has the discretion to defer an appraisal. (Alexander v. Farmers Insurance Company, Inc.  (Cal. App. Second Dist., Div. 8; September 23, 2013) 219 Cal.App.4th 1183, [162 Cal.Rptr.3d 455].)