| What if, after all you've done, you and your adjuster | | | | the other expenses of the appraisal and umpire |
| insurance company are at an impasse on the value of | | | | equally." |
| your property? It's now time to invoke the Appraisal | | | | Each party appoints an independent, disinterested |
| Clause in your insurance policy. The Appraisal Clause is | | | | appraiser. In past experience, I've seen the insured or |
| found in all insurance policies, and was designed to | | | | policyholder try to appoint the Public Adjuster who is |
| establish a procedure to allow disputed amounts to | | | | handling his claim as the appraiser. This should never |
| be resolved by disinterested parties. The appraisal | | | | be done, as that PA is not a disinterested party. |
| clause can be found in every homeowners policy, in | | | | The appraisers evaluate the loss independently. The |
| every policy covering commercial buildings, in all | | | | appraisers can still negotiate and reach an agreed |
| business policies, as well as in every renters | | | | amount of the damages. But, if they cannot agree, |
| policy...even automobile policies. | | | | they work together to choose a mutually acceptable |
| The Appraisal Clause is usually found in the policy | | | | umpire. If the two appraisers cannot agree on the |
| under the Heading "Conditions" and/or "What to do | | | | selection of an umpire, either side may appeal to the |
| after a loss." | | | | local court for the appointment of someone to serve |
| Don't confuse the Appraisal process with Arbitration. | | | | in that capacity. |
| The Appraisal Clause does not bind either party to its | | | | An umpire must also be a disinterested party, and |
| findings. In arbitration, the findings of the arbitrator | | | | must be impartial, of good moral character and |
| are usually binding on both parties. | | | | possessing a good reputation. He also must be willing |
| The Appraisal Clause is meant to be the method for | | | | to listen. No umpire should be chosen that has any |
| determining disputed values. Appraisal cannot be used | | | | financial interest in the outcome of the appraisal. Any |
| to determine what is covered. That is for a court of | | | | other consideration other than the hourly rate of |
| law to decide. If you have dispute with the company | | | | compensation for the umpire is not acceptable. |
| on whether or not something is covered, then you | | | | Once the umpire has been chosen, the appraisers |
| must file a lawsuit against your insurer to get that | | | | each present their loss assessment. Often, this |
| determination. | | | | involves informal testimony from the parties involved |
| HERE'S A REALLY IMPORTANT TIP!!! You don't have | | | | in the claim. To help the umpire gain a more complete |
| to wait until you're hopelessly deadlocked with the | | | | understanding of the details of the loss, the |
| adjuster or insurance company to invoke the | | | | appraisers and the umpire sometimes meet at the |
| Appraisal Clause. The Appraisal procedure has been | | | | loss location and review the loss details. The umpire |
| invoked more often by insurers, who have greater | | | | will subsequently provide a written decision to both |
| understanding of the terms and conditions of their | | | | parties. If any two parties agree to the amount of |
| policies. But you, the insured or policyholder, can do it | | | | the loss, that amount becomes the claim amount. |
| any time. | | | | However, if one of the parties does not agree, then |
| I'm not suggesting that you become uncooperative. | | | | the case can still be turned over to legal counsel for |
| But occasionally, I talk to people who are having real | | | | litigation. |
| difficulties with their adjuster or insurance company. | | | | Question: May the insured or insurer reject the other |
| Taking the claim to Appraisal sometimes stops all the | | | | parties' choice of appraiser? |
| drama. | | | | Answer: In 2005, the New York Department of |
| In my experience as both an appraiser and an | | | | Insurance issued a ruling on this question as follows: |
| umpire, I've found that disputes can be resolved | | | | "Whether an appraiser appointed by either of the |
| more quickly by appraisal than the resolution you | | | | parties is competent and disinterested (or |
| might get with litigation. The cost of the appraisal | | | | "independent") is a question of fact for a jury and is |
| process is also significantly lower that the cost of | | | | outside the determination of this Department." |
| litigation. | | | | ANOTHER TIP!! Notice that there are very specific |
| Here's what the Appraisal Clause reads in my | | | | time limits in the Clause. You MAKE SURE that you |
| Homeowner Insurance policy: | | | | choose your appraiser and notify the adjuster within |
| "If you and we fail to agree on the amount of loss, | | | | the time limit in your policy. The time limit for both |
| either maydemand an appraisal of the loss. In this | | | | appraisers to choose an umpire begins on the day |
| event, each party will choosea competent appraiser | | | | that both sides choose their appraiser. |
| within 20 days after receiving a written requestfrom | | | | Watch very carefully to see if the insurance |
| the other. The two appraisers will choose an umpire. | | | | company and/or adjuster chooses their appraiser |
| If theycannot agree upon an umpire within 15 days, | | | | within that time limit. If they do not, they have |
| you or we may requestthat the choice be made by | | | | violated the terms and conditions of their policy. You |
| a judge of a court of record in the statewhere the | | | | can file a complaint with your state's Department of |
| "residence premises" is located. The appraisers | | | | Insurance for Unfair Claims Practice violations. |
| willseparately set the amount of loss. If the | | | | My recommendation, in the event of an appraisal, is |
| appraisers submit anagreement to us, the amount | | | | to call a Claims Consultant. You might also consider |
| agreed upon will be the amount of loss. | | | | contacting a public adjusting company in your area. |
| If they fail to agree, they will submit their differences | | | | The Claims Consultant or PA know insurance policies, |
| to the umpire. | | | | know the Appraisal Clause, and know property |
| A decision agreed to by any two will set the amount | | | | values. The Claims Consultant or PA are the perfect |
| of loss. | | | | choices for helping you prove the values of the |
| Each party will:a. pay its own appraiser, andb. Bear | | | | property of your claim. |