SF4798

1. Purpose
2. Establishes a formal appraisal and dispute-resolution process for fire and allied lines property insurance when the insured and the insurer disagree on the actual cash value (ACV) or the amount of the loss.

3. Repeals a prior statute (65A.26) and replaces it with a defined appraisal framework to determine loss amounts and ACV for each item, aiming to reduce litigation and provide a structured method to settle claims.

4. Main Provisions

5. Coverage scope: Applies to a policy of fire and allied lines of insurance as defined in 70A.03 clause 2.

6. Written demand and selection: If the insured and the insurer cannot agree on ACV or loss, either party may demand appraisal. Within 20 days of the written demand, both parties must each select a competent and disinterested appraiser and notify the other party of the selected appraiser.

7. Court appointment if one side fails to appoint: If a party fails to appoint an appraiser within the 20-day window, a presiding judge of the district court where the loss occurred may appoint an appraiser for the defaulting party upon written application by the other party (with five days’ notice).

8. Appointment of umpire: Appraisers must first select a competent and disinterested umpire. If they cannot agree on an umpire within 15 days, a presiding judge may appoint an umpire upon written application (with five days’ notice).

9. Appraisal process and reporting: The appraisers must appraise the loss and state separately the actual value and the loss for each item. If the appraisers disagree on the value and loss for an item, they must submit only the differences to the umpire.

10. Award and final determination: An itemized written award by the two appraisers, filed with the insurer, determines the amount of actual value and loss.

11. Payment responsibilities: Each appraiser is paid by the party that selected that appraiser (or by the party for whom the appraiser is selected). The cost of the appraisal and the umpire is shared equally by the parties.

12. Litigation condition and time limit: A suit or action on the policy to recover a claim is not sustainable in court unless all policy requirements are met and the suit is commenced within two years after the loss began.

13. Repeal of prior law: Minnesota Statutes 2024 section 65A.26 is repealed as part of this act.

14. Significant Changes to Existing Law

15. Introduces a compulsory, court-aided appraisal framework for resolving dispute over ACV and loss amounts in fire and allied lines insurance, replacing the previous framework found in the repealed section 65A.26.

16. Creates explicit timelines and procedures for appointing appraisers and an umpire, including court intervention if the parties fail to appoint.

17. Establishes cost-sharing for appraisal and umpire expenses and assigns payment responsibility for appraisers.

18. Adds a two-year deadline for filing suit after the loss to recover on a policy claim, tying dispute resolution to a defined time window.

19. Clarifies the types of losses and how itemized values are determined and reviewed (separate actual value and loss per item; differences go to umpire if needed).

Relevant terms - actual cash value (ACV) - loss - appraiser - umpire - competent and disinterested (appraiser/umpire) - written demand - presiding judge of the district court - district court - itemized written award - fire and allied lines of insurance - 70A.03 clause 2 (definition reference) - two years after inception of the loss - policy requirements - cost of appraisal and umpire - disputes over value per item

Relevant Terms (inferred concepts) - appraisal process as an alternative to immediate litigation - structured dispute resolution mechanism for insurance claims - equal cost sharing of appraisal-related expenses

Note: The summary reflects the text provided, including the appraisal and umpire framework, timelines, cost rules, and the repeal of the referenced prior statute.