Court Rules That Insured Is Entitled To Pre-award Interest On Full Rcv Amount Of Appraisal Award, Without Offsets For Prior Payments Made By Insurer

SJJ attorneys Alex Jadin and Tim Johnson recently won another case with significant implications for the insurance appraisal process in Minnesota.  Niakwa Village Home Owners Association v. American Family Mutual Insurance Company involved a residential community that suffered hail damage in a recent storm.  The Association made a claim for the damage to its insurance company, but the insurance company significantly undervalued the claim.

The Association hired SJJ and invoked its right to appraise the damage caused by the storm. The panel awarded a value to the claim far in excess of the insurance company’s offer to pay.  The insurance company paid the award, but disputed that it owed the insured any pre-award interest under Minn. Stat. § 549.09 (See for more information).  The insurance company argued it should get credit for partial payments made before the appraisal and that interest should not accrue on the RCV or “Replacement Cost Value” of the award.

The Court heard arguments from both parties, and ultimately agreed with SJJ. The Court found that the insurance company owed the Association pre-award interest on the entire award, including the RCV and that the insurance company was not entitled to offset prior payments to reduce the calculation of pre-award interest owed.
This decision confirms that pre-award interest on appraisal awards is due on the FULL amount of an appraisal award, and not just part of it. If you prevailed against your insurance company at appraisal, you may be entitled to additional interest on the award, so call SJJ today!