When a property insurance claim is disputed in Minnesota, appraisal is often used to resolve the disagreement over the amount of loss. But what exactly does that mean—and how far does an appraisal panel's authority go?
Over the years, Minnesota courts have issued several key rulings that define the duties, powers, and limits of insurance appraisers and umpires. These decisions provide clarity on what’s allowed during an appraisal and help policyholders and insurers alike understand their rights and obligations.
Here are the most important court decisions guiding insurance appraisal in Minnesota:
1. Schoenich v. American Insurance Co. (1910)
Procedural Fairness is Key
"The referees... are not vested with absolute authority to make independent investigation... but are required to give interested parties reasonable opportunity to present evidence..." – Schoenich
Why It Matters:This case laid the foundation for how appraisal panels must operate in Minnesota. While appraisers can gather information, they must disclose their findings and give both parties a chance to respond. It’s a safeguard against one-sided proceedings.
Takeaway: Appraisers have the right to form and present their position—including relevant findings or observations that support it. However, procedural fairness requires that any information influencing the panel's conclusions must be disclosed in time for both parties to respond. A key violation occurs not when an appraiser investigates independently, but when new information is introduced without giving the principal parties a chance to offer testimony or evidence in support or opposition. The appraisal process must remain transparent, with equal opportunity for both sides to participate in shaping the outcome.
2. Quade v. Secura Insurance (2012)
Appraisers Can Decide on Causation
"The phrase 'amount of loss' necessarily includes a determination of causation." – Quade
Why It Matters:This ruling explicitly allows Minnesota appraisal panels to determine factual causation, such as whether wind or hail caused roof damage. However, legal coverage questions (e.g., exclusions) must still be decided by a court.
Takeaway:Appraisers can—and should—assess what caused the damage. They cannot interpret legal policy language or decide coverage.
3. Oliver v. State Farm (2020)
Appraisal Is Not Arbitration
"Appraisal is not arbitration... [It] resolves factual questions... not legal questions..." – Oliver
Why It Matters:This case draws a hard line between appraisal and arbitration. Appraisers handle numbers and facts—not legal disputes over policy terms.
Takeaway:Appraisal panels are not mini-courts. Their job is to assign a dollar value to loss, not to settle legal disagreements.
4. Poehler v. Cincinnati Insurance Co. (2017)
Pre-Award Interest Is Owed
"An insured is entitled to pre-award interest... regardless of whether [they] filed a separate claim for breach of contract." – Poehler
Why It Matters:Policyholders in Minnesota are entitled to interest on appraisal awards even without proving the insurer breached the contract. This incentivizes fair and timely insurance payments.
Takeaway:Delays can cost insurers. Policyholders benefit when interest is calculated from the original claim date—not just the award date.
5. Cedar Bluff Townhome Condo Ass'n v. American Family (2014)
Appraisal Can Consider Matching
"'Comparable material and quality' requires... a reasonable color match..." – Cedar Bluff
Why It Matters:This landmark case clarified that appraisers can factor in aesthetic matching—like replacing undamaged siding to maintain visual consistency—when determining the amount of loss.
Takeaway:Appraisers can include the cost of matching undamaged materials when needed for a uniform appearance.
6. Noonan v. American Family (2017)
Matching Ambiguities Favor the Insured
Key Highlights:
Policy language around matching is interpreted in favor of the policyholder.
Appraisal awards addressing matching were upheld.
Courts may award interest and attorney’s fees if insurers delay payment.
Why It Matters:This case reinforces Minnesota’s tendency to resolve ambiguities in favor of the insured. It also underscores the financial risk insurers face when they delay honoring appraisal awards.
Takeaway:Insurers must clearly define matching provisions—or risk paying more later.
Why These Cases Matter for Policyholders
Each of these decisions provides important guidance on how insurance appraisal should function in Minnesota. They reinforce procedural fairness, clarify the appraisal panel’s role in determining the factual amount of loss, and draw clear boundaries between factual valuation and legal interpretation—ensuring all parties operate within well-defined parameters.
That said, the appraisal process can be highly technical and procedurally nuanced. For policyholders, having knowledgeable representation—whether through a public adjuster, attorney, or qualified appraiser—can be critical to ensuring their position is fully and effectively presented.
Why You Should Consider a Public Adjuster in Minnesota
Appraisals can be complex. Knowing what an appraiser is allowed to do—or not do—often requires deep understanding of case law, policy language, and the appraisal process itself.
A public adjuster works on your behalf to:
Ensure your appraisal panel understands recent legal rulings
Advocate for fair valuation of your damages
Challenge unfair insurer interpretations
Assist in selecting a qualified appraiser or umpire
Many homeowners and property managers are unaware they even have the right to dispute an insurance payout—or that appraisal is an option when disagreements arise.
Final Thoughts
Understanding these key Minnesota appraisal cases arms policyholders with the knowledge to protect their claims. If you believe your insurance payout is too low, or if your insurer is dragging their feet on payment, consulting a public adjuster could be the difference between being shortchanged and receiving a fair settlement.
Need help with an underpaid or disputed property insurance claim in Minnesota?Contact our team today to discuss your options and protect your right to full and fair payment.
