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When Policyholders Aren't Entitled To Preaward Interest
February 11, 2016
Law360, New York (February 11, 2016, 12:06 PM ET) -- Most property insurance policies contain an appraisal clause that provides that if the parties cannot agree on the amount of loss, either party may demand an appraisal. An appraisal panel consisting of two party-appointed appraisers and a disinterested umpire then determines the amount of a loss. In most instances, an appraisal award is issued several months, perhaps even years, after the loss. Therefore, an issue can arise as to whether a policyholder is entitled to recover preaward interest on an appraisal award.
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