Minnesota Court of Appeals rules against American Family Insurance on the issue of Match Coverage

Last week the Minnesota Court of Appeals ruled in favor of an Association and against American Family on the issue of match coverage. In Cedar Bluffs,  the storm only caused actual physical damage to two sides of the building. However, replacing those two sides would cause the new siding to no longer match the original siding.

The property owner and insurer could not agree on the amount owed, and the insurance claim went to an appraisal panel for decision.  Because the building would no longer match, the appraisal panel awarded the cost to replace all four sides of the building at issue.

American Family then challenged the award, and the trial court overturned the panel and found that only the storm damaged siding needed to be replaced without regard to the match for the rest of the building. The Court of Appeals, however, agreed with the appraisal panel and overruled the trial court.

The Court of Appeals found that American Family’s policy was vague when it agreed to replace the damaged materials “with other property of like kind and quality” and “with other property … of comparable material and quality” and that the appraisal panel had the authority to consider and award damages for two sides of the building that had not been physically damaged by the storm.

Since a reasonable person could understand “comparable material” to mean material that is the same color as the damaged property, all of the siding should be replaced and the appraisal award was confirmed as correct.  For a full copy of the decision click here.