NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9346A
SPONSOR: Morelle (MS)
TITLE OF BILL: An act to amend the insurance law, in relation to
court ordered appraisals under fire insurance policies
PURPOSE: This bill relates to court ordered appraisals under fire
SUMMARY OF PROVISIONS:
Section 1 - Amends subsection (c) of Section 3408 of the insurance law,
as added by Chapter 25 of the Laws of 2010.
Section 2 - Effective Date
JUSTIFICATION: One manner of resolving disputes under certain insur-
ance policies is the appraisal process, which is similar to arbitration.
When an insured requests an appraisal, and the insurer refuses, the
insured can seek a Court Order requiring the insured to participate in
the appraisal process. Unfortunately, the Courts have taken a limited
view as to what issues are subject to appraisal. This bill would clarify
that the amount of the loss is a proper subject of arbitration. This
change will result in substantial savings in litigation costs to both
sides of a dispute.
LEGISLATIVE HISTORY: New bill
FISCAL IMPLICATIONS: None
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK
April 16, 2014
Introduced by M. of A. MORELLE, COOK, JACOBS, LIFTON, ABINANTI, CRESPO,
SKARTADOS, STIRPE, OTIS, MOSLEY, SIMOTAS, CUSICK, SKOUFIS, BENEDETTO,
BRINDISI, CLARK, MAGNARELLI, BROOK-KRASNY, McDONALD, WEPRIN -- Multi-
Sponsored by -- M. of A. FAHY, HIKIND, MAGEE, MARKEY, ROBINSON, THIELE
-- read once and referred to the Committee on Insurance -- reported
and referred to the Committee on Codes -- reported and referred to the
Committee on Rules -- Rules Committee discharged, bill amended,
ordered reprinted as amended and recommitted to the Committee on Rules
AN ACT to amend the insurance law, in relation to court ordered
appraisals under fire insurance policies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subsection (c) of section 3408 of the insurance law, as
2 added by chapter 25 of the laws of 2010, is amended to read as follows:
3 (c) In the event of a covered loss, whenever an insured or insurer
4 fails to proceed with an appraisal upon demand of the other, either
5 party may apply to the court in the manner provided in subsection (a) of
6 this section for an order directing the other to comply with such
7 demand. [If an] An appraisal [is so ordered, it] shall [be limited to a
8 determination of] determine the actual cash value [and/or], the replace-
9 ment cost, [or] the extent of the loss or damage and the amount of the
10 loss or damage which shall be determined as specified in the policy and
11 shall proceed pursuant to the terms of the applicable appraisal clause
12 of the insurance policy and not as an arbitration. Notwithstanding the
13 provisions of this subsection, an appraisal shall not determine whether
14 the policy actually provides coverage for any portion of the claimed
15 loss or damage.
16 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.