A Minnesota appeals court refused to award interest on a claim by a homeowner, whose property was damaged by fire in October 2013, because the insurer had held up its end of the contract.

The policy provided for assessment of the damages by an independent appraiser if the insurer and policyholder could not agree on the amount of the loss. The insurer determined the claim at $175 664. The insured invoked the appraisal clause. The appraiser raised the amount by $88 480 which the insurer paid in July 2014.

The policyholder claimed interest. The appeals court refused to grant interest because the insurer had fulfilled its obligations and there was no wrongdoing entitling the policyholder to interest. The insurer paid as soon as the loss was determined by the appraiser.

In South African law an insurer has a reasonable time within which to assess and pay the claim. What is reasonable depends on the circumstances and complexity of the claim. If the claim is assessed and paid within a reasonable time after reasonable investigations are complete, there is no basis for claiming interest. In the absence of a provision in the policy or the law specifying the date by which payment must be made, the insured must demand payment when it is due and is entitled to interest at the prescribed rate (repo rate plus 2%) if payment is not made on demand.