For decades, appraisal has been a central feature of Florida property insurance disputes. Designed to resolve disagreements over the amount of loss, appraisal was never intended to displace litigation altogether. In recent years, appraisal has become far more contested. Courts are now scrutinizing appraisal awards more closely, carriers are tightening appraisal clauses, and post-award litigation is no longer the exception. The result is a renewed insistence that appraisal remain a valuation tool. It is not a substitute for judicial determination of coverage, policy compliance, fraud, forfeiture, or other legal defenses. Recent decisions focus less on the number reached and more on whether the appraisal process complied with the policy and the panel stayed within its assigned role.
The starting point remains Johnson v. Nationwide Mutual Insurance Co., 828 So. 2d 1021 (Fla. 2002). In Johnson, the Court held that when a carrier admits a covered peril caused some damage but disputes how much damage was caused by that peril, the extent of damage attributable to the covered peril presents an amount-of-loss issue for appraisal rather than a pure coverage question for the court. That ruling does not place every causation dispute within appraisal. If a covered peril is acknowledged and the parties disagree over the scope or price of covered damage, appraisal may determine the amount. If the dispute is whether the policy affords coverage in the first instance, whether a condition precedent was satisfied, or whether an exclusion or forfeiture provision bars recovery, those issues remain for the court. Causation and valuation often overlap. A panel valuing hurricane damage may need to distinguish storm-created damage from unrelated wear, deterioration or prior repairs. But that overlap does not expand the panel’s authority into legal territory. In practice, appraisers may consider causation as part of measuring the amount of covered loss, while courts retain authority over legal coverage questions.
The Florida Supreme Court’s decision in American Coastal Insurance Co. v. San Marco Villas Condominium Association, Inc., 379 So. 3d 1097 (Fla. 2024), rejected a rigid sequencing rule that would require all coverage issues to be resolved before appraisal. The Court confirmed that trial courts have discretion to allow appraisal to proceed even where coverage defenses remain pending, particularly where the policy reserves the right to deny coverage following appraisal. Appraisal may proceed to quantify the loss while courts later determine whether exclusions, limitations, or conditions precedent bar recovery. San Marco underscores a practical point: policy language matters. The policy in that case contained a retained-rights provision allowing the carrier to deny the claim even if appraisal occurred. The court interpreted that language to mean that the parties contemplated appraisal could proceed before every coverage issue was resolved. The retained-rights provision preserved the carrier’s ability to proceed with appraisal without waiving coverage defenses. When the policy preserves the carrier’s post-appraisal rights, a court may allow the dual-track model to proceed: appraisal sets the amount of loss, while litigation continues over coverage, exclusions, fraud, misrepresentation, conditions precedent or other defenses.
Appraisal does not cure noncompliance with policy conditions. Florida courts have repeatedly recognized that a party seeking appraisal must satisfy applicable post-loss obligations before appraisal is compelled. Cases such as U.S. Fidelity & Guaranty Co. v. Romay, 744 So. 2d 467 (Fla. 3d DCA 1999) and State Farm Florida Insurance Co. v. Hernandez, 172 So. 3d 473 (Fla. 3d DCA 2015), reinforce that principle. If the dispute is whether the insured materially complied with duties after loss, whether the carrier had a reasonable opportunity to investigate, or whether the claim is barred by fraud or misrepresentation, those issues remain judicial questions. The practical question is whether the court should decide them before appraisal or preserve them for later litigation. San Marco affects sequencing, but it does not eliminate policy conditions.
In response, modern Florida policies now define the panel’s authority with greater precision. These clauses typically state that appraisal is available only to determine the amount of loss and that appraisers and umpires have no authority to decide questions of law, coverage, policy interpretation, causation beyond valuation, or compliance with policy conditions. That language matters. Appraisal is a creature of contract, and courts will enforce the process the parties agreed to use. Appraisal provisions that expressly limit authority also create a clearer record for judicial review. If the panel decides issues reserved for the court, fails to state the required amount of loss, or issues an award that obscures excluded or non-covered items, the award becomes vulnerable to challenge. A well-drafted appraisal provision preserves the carrier’s right to deny coverage, assert exclusions, challenge compliance with post-loss obligations, contest fraud or misrepresentation, and seek judicial relief from an award that exceeds the panel’s contractual authority.
This scrutiny is not theoretical. Courts are willing to set aside even high-value awards when the appraisal process departs from the policy. Westchester Surplus Lines Insurance Co. v. Portofino Master Homeowners Association, No. 3:23-cv-00453-MCR-HTC (N.D. Fla. Sept. 22, 2025) illustrates the consequences of departing from the appraisal provision. The case arose from Hurricane Sally damage to the Portofino Towers in Pensacola Beach and involved a $187 million appraisal award. The award was ultimately declared invalid and vacated. The court focused not on the amount awarded, but on whether the appraisal process complied with the policy. Portofino’s appraiser did not state the “amount of loss” caused by Hurricane Sally. Instead, the appraiser submitted what the court characterized as a $233 million “starting point” and left core scope and pricing determinations for the umpire. The court held that this departure from the contractual appraisal procedure constituted an excess of authority under Florida Statutes section 682.13, which warranted vacatur of the award. Appraisal panels must perform the function assigned by the policy—nothing more.
Although appraisal awards are not arbitration awards, Florida courts routinely look to Fla. Stat. §§ 682.13 and 682.14 when evaluating post-award challenges. Section 682.13 provides grounds for vacatur, including corruption, fraud or undue means; evident partiality; misconduct prejudicing a party’s rights; arbitrators exceeding their powers; lack of agreement; and improper notice. Section 682.14 permits modification or correction for evident miscalculation, matters not submitted, or imperfections in form that do not affect the merits. In the appraisal context, the most important grounds are usually excess of authority, misconduct, evident partiality and noncompliance with the policy’s appraisal procedure. Examples include a panel deciding legal coverage issues, issuing an award that cannot be reconciled with the policy’s required categories, relying on a materially defective process, failing to provide the amount the policy requires, or allowing a supposedly neutral umpire to proceed despite a disqualifying conflict. Undisclosed relationships, financial interests, contingency arrangements or other facts suggesting a decision-maker has a stake in the outcome create serious risk to the enforceability of the award.
To safeguard the integrity of the process, carriers should identify early whether the dispute is truly about amount of loss, a legal coverage issue, or both. Appraisal should be invoked or resisted based on the policy language, with coverage defenses expressly preserved. If appraisal proceeds, the award should be required to comply with the policy’s terms. Itemization matters. A lump-sum award may create enforcement disputes if it obscures covered versus non-covered damages, ordinance or law issues, deductibles, limits, prior payments, matching, depreciation or excluded categories. Where possible, carriers should seek protocols requiring the panel to separate buildings, coverages, causes of loss, repair categories and disputed items. If an award exceeds the panel’s authority, results from misconduct, or departs from the policy, vacatur or modification under §§ 682.13–.14 must be evaluated immediately given the strict statutory deadlines. Courts also continue to evaluate whether a party has waived appraisal by acting inconsistently with that right, though mere participation in litigation is generally insufficient.
Appraisal remains a powerful tool—but only when the panel stays within the four corners of the contract and leaves legal disputes to the court. Johnson confirms the role of appraisal in resolving valuation disputes. San Marco confirms that appraisal and coverage litigation may proceed on parallel tracks when the policy permits it. Portofino confirms that courts will not enforce an award where the panel departs from the process the parties agreed to use.
Michael Shifrin, Esq.