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RSJ Does It Again

Once again, RSJ has helped a townhome association recover interest from an insurance company that failed to pay the fair value of an insurance claim for storm damage.

The case, Cottage Heights Association v. American Family Insurance Company, Stearns County District Court Case No. 73-CV-14-1150, involved storm damage to a townhome association's roofs and siding. American Family undervalued both the amount of damage to the property and the cost to repair the damage. The townhome association disagreed with American Family's determination of the amount of damage and the cost of repair. Accordingly, it demanded an insurance appraisal under its property insurance policy. The insurance appraisal panel agreed with the townhome association, and awarded significantly more than American Family had offered to pay.

Smith then asked the Stearns County District Court to award the townhome association interest on the appraisal award from the date the damage to the property occurred through the date of the award. Smith argued that the townhome association was entitled to interest at the rate of 10% interest per year on the appraisal award under Minnesota's pre-award interest statute, Minn. Stat. 549.09. American Family opposed the motion, and argued that the townhome association was not entitled to interest.

The court rejected all of the insurance company's arguments and granted Smith's motion for pre-award interest.

Once again, this case reaffirms that insurance policy holders have the right under Minnesota law to recover interest from an insurance claim that undervalues a property insurance claim.

Read the Court's Order here:

Cottage Heights Association Order.pdf

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