Property insurers are enjoying a late Winter harvest courtesy of Minnesota.
In Elm Creek v. State Farm, the Minnesota Court of Appeals recently ruled that the “harvesting” of undamaged siding was a reasonable method of repair. The loss location was a “residential, common-interest community” with 21 buildings, some of which were damaged during a 2017 hailstorm. After a disagreement over the amount of the loss, the policyholder challenged an Appraisal award which included the harvesting of undamaged siding. The court referred to the dictionary definition of harvesting in reaching its decision, i.e. “the process of reusing materials from one location or structure to repair portions of a separate location or structure.”
The Elm Creek court ruled that the appraisers were within the scope of their authority in assessing the reasonableness of harvesting as a means of repair. The Minnesota Court said it best: “[t]he appraisal panel was… within its authority to consider ‘harvesting’ in the context of determining ‘[t]he cost to replace, on the damaged premises, the lost or damaged property with other property of comparable material, quality and used for the same purpose.’”
The Minnesota court is the first to expressly supporting what adjusters and contractors have stated for decades: harvesting undamaged siding may be a reasonable method of repair at a loss location.
This post was originally published through Horst Krekstein & Runyon’s Property in 60 Seconds Newsletter. If you would like to receive future copies of that newsletter, please contact Sean Dever at sdever@hkr.law.