Lee v. Hamilton Fire Insurance

167 N.E. 426, 251 N.Y. 230, 1929 N.Y. LEXIS 710

• Court: New York Court of Appeals
• Decided: July 11, 1929
• Status: Published

Opinions

Hobbs, J.

The plaintiff insured his new automobile truck with the defendant insurance company for $5,720. The trial court has decided that the policy covering the truck is a valued policy, that there was a total loss of the truck by fire, and has awarded judgment to the plaintiff for the amount of the policy. Before this action was commenced, appraisers selected by the parties had fixed the sound value of the truck at the time of the fire at $3,700 and the loss and damage at $2,700.

A valued policy is one in which the words “ valued at ” appear and the amount at which the property insured is “ valued at ” definitely fixes the liability of the insurer and is conclusive on the parties. (Michael v. Prussian Nat. Ins. Co., 171 N. Y. 25; Phoenix Ins. Co. v. McLoon, 100 Mass. 475.) The policy in question fixes the amount at which the property was insured or valued at as $5,720. It is, therefore, a technical valued policy.

In case of a total loss under a valued policy the amount to be recovered is the amount of the policy without regard to depreciation or other elements entering into the market value of the property at the time of the loss. The appraisal clause in a valued policy is inoperative when there is a total loss. (Empire Development Co. v. Title G. & T. Co., 225 N. Y. 53., 58; Penna. Fire Ins. Co. v. Drackett, 63 Ohio St. 41.)

Consent to an appraisal does not constitute a waiver of claim to a total loss. (Penna. Fire Ins. Co. v. Drackett, supra; Seyk v. Millers Nat. Ins. Co., 74 Wis. 67.)

An appraisal clause does not permit appraisers to determine whether a loss was in fact total, as an appraisal is to determine the amount of damage only. (Hartford Fire Ins. Co. v. Bourbon County Court, 115 Ky. 109.)

The question to be determined under the appraisal in this case was, what was the “ loss or damage.” The words “ loss or damage ” as used in the policy are explained and limited by the policy which reads: " In the event of loss or damage under this policy, this Company shall be hable only for the actual cost of repairing or, if necessary, replacing the parts damaged or destroyed.” It also provides that in case of “ loss or damage ” the policy shall be reduced by the amount of such “ loss or damage.” Such provisions can only refer to a “ loss or damage ” less than a total loss. The provision of the policy for an appraisal reads: “ In the event of disagreement as to the amount of loss or damage,” an appraisal shah be had, etc.

It seems clear that the appraisal was to cover only “ loss or damage ” less than a total loss. If the insured under such a policy claims a total loss and the insurer a partial loss, and the latter insists on an appraisal, the granting of the appraisal by the insured cannot estop him from litigating the question of a total loss. If it be decided that the loss was not total, then the appraisal stands, but if it be decided that the loss was total, then under the valued policy the plaintiff would be entitled to receive the amount of the policy. Any other construction disregards the fact that the policy is a valued policy and treats it as an open policy.

The judgment should be affirmed, with costs.