Summary: The conditions section that appears in the current auto coverage form has been reorganized compared to previous versions. The substantive changes have been few; most of the changes have dealt with revamping the format. Some of the headings have been reworded. The order of appearance has been juggled. And, whereas previous versions of the conditions section listed 12 conditions, the current version has 13 conditions, consisting of five loss conditions and eight general conditions.

Topics covered:

Loss conditions

General conditions

Common policy conditions

Loss Conditions

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 Appraisal For Physical Damage Loss

If you and we disagree on the amount of “loss”, either may demand an appraisal of the “loss”. In this event, each party will select a competent appraiser. The two appraisers will select a competent and impartial umpire. The appraisers will state separately the actual cash value and amount of “loss”. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

1.Pay its chosen appraiser; and

2.Bear the other expenses of the appraisal and umpire equally.

If we submit to an appraisal, we will still retain our right to deny the claim.

 Analysis

 There are two major points to this condition. First, either party may demand an appraisal of the loss; neither the insured nor the insurer has the ability to force a settlement on the other party and neither the insured nor the insurer has to get the other party’s permission in order for an appraisal to be put into motion. Second, the insurer’s acceptance of an appraisal does not act as a waiver on the part of the insurer; a claim can still be denied if warranted due to an exclusion or some other relevant part of the auto form.