Matching Disputes in Property Insurance Claims: Statutory Obligations of Insurers, Policy Language, Recent Cases

This CLE webinar will discuss the issue of matching in property damage claims, a very misunderstood issue and one deserving of more attention than it sometimes gets. The panel will address how the issue arises, policy language, matching statutes and regulations, recent case law where matching was required or limited, matching in appraisals, and other current developments.

Standard replacement cost property insurance policies typically require insurers to repair or replace a policyholder's damaged property with "material of like kind and quality" or with "similar material" or "comparable material and quality … used for the same purpose." The "matching" problem arises in the context of partial damage when new materials will not match (or fit) the remaining undamaged sections, leaving its appearance and value materially impaired. Must the insurer replace all or some of the undamaged portions of the property (for example, roof, siding, cabinets, windows, etc.) so that the new and old will match and present a reasonable or uniform appearance?

The resolution of the matching issue will be affected by whether the relevant jurisdiction has a matching statute or relies on common law, what the policy says about matching obligations, and the interplay between the statute or case law and the policy language. Insurers often push back on matching claims if the property lacked uniformity before the loss, if replacing all items would create an unjust windfall, or if the insured is insisting on perfection. Although matching statutes usually do not create a private right of action making enforcement difficult, a matching dispute can quickly become a bad faith quagmire. Compromise and negotiation strategies that prioritize the clients goals are needed.

Who decides matching issues—a judge, a jury, or an appraiser—may also have a significant impact on the outcome. Counsel wanting the issue decided by a judge may cast matching as a coverage issue which turns on policy interpretation. Counsel preferring a jury or appraiser may urge that matching—what something looks like—is a question of fact. While personal dissatisfaction with a repair may not be enough to require matching, counsel must have objective evidence about what does or does not amount to a lack of reasonable or uniform appearance and qualified experts to provide those opinions and state whether lack of matching decreases the value of the property. 

Listen as our distinguished and experienced panel discusses the principle of matching and various ways of resolving the issue.