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RSJ Obtains Insurance Coverage For Matching

In an important insurance coverage decision for property owners in Minnesota, RSJ members Curt Roeder and Anthony T. Smith obtained a decision from the Minnesota Court of Appeals in Cedar Bluff Townhome Condominium Association v. American Family Mutual Insurance Company, No. A13-0124 (Minn. Ct. App. Dec. 2. 2013) that required an insurance company to provide matching products to a property owner under a property insurance policy.

The case concerned an appraisal panel's authority to award damages to repair storm damaged siding throughout a condominium association with matching siding.  The appraisal panel concluded that it could not determine the value of the loss based on the cost to repair the storm damaged siding "with other property of like kind and quality" and "with other property ... of comparable material and quality" per the insurance policy because matching siding was not available.  Accordingly, the appraisal panel awarded the condominium association the cost to replace all of the siding throughout the property per the policy language allowing losses to be valued based on "the amount ... that is necessary to repair or replace the lost or damaged property."

The Minnesota Court of Appeals held that the appraisal panel had the authority to consider and apply the insurance policy language and to consider the availability of matching replacement products in determining the value of a property insurance claim.

The Court of Appeals further held that the language of American Family's insurance policy requiring replacement "with other property of like kind and quality" and "with other property ... of comparable material and quality" is ambiguous. Specifically, the Court found that a reasonable person could understand "comparable material" to mean material that is the same color as the damaged property.

The Cedar Bluff decision has broad insurance coverage implications for property damage claims in Minnesota.  It strengthens the rights of property insurance holders, who shouldn't have to settle for repairs with mismatched materials from their property insurance companies. 

Download the Court of Appeals' Order here

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