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Posted By host on 25 Jun 2009 02:50 PM

Note: This is a transfer from the Bulletin Board.

 

...This time the insurance company came back with damages of 5,400. Although, the insurance company is getting closer, they are still far off from the actual damages. 

are they going to send the 5400 right now today as an undisputed amount? Its the good faith thing to do, regardless of whether appraisal is going to happen.

I would expect that refusing to participate in the appraisal process provided in the terms and conditions of the insurance contract would be nearly unheard off.

My suggestion is to send notice of appraisal to the company and the DOI by Certified Return Receipt Requested mail, thru the United States Postal Service. Keep the receipts and a copy of the letter as proof. Do it once a week until you get results.

In addition to what Ray said, the request for appraisal needs to be in writing to the insurance company, not the insurance commission . It is not bad faith to delay an appraisal when coverage or scope of loss is in dispute. These are not issues for appraisal. Appraisal deals with cost of repairs. Appraisal is not arbitration. In appraisal two or more of the parties have to agree. A judge can't just say, "Let's split the difference." A retired judge is not the best choice for an umpire because the best umpire is going to be someone with judicial rather than estimating experience.

Hopefully you have examined your own roof and are not just saying the estimate is too low without any basis.

Since you are an independent adjuster, take out your ladder, go up on your roof with your sidewalk chalk, mark off your test squares on each slope, circle the hail bruises. Take overviews and close ups on each slope. Then crunch the numbers in Xactimate, Simsol, or whatever estimating program you have a license for. You have preserved the evidence. Then supply these materials to your insurance carrier so the desk jockeys who will make the final decision have access to your side of the story. Then start calling the carrier. If the first person cusses you out, ask for his or her supervisor, then his or her supervisor. Keep going up the line until you hit someone reasonable and the stuff starts raining down on the peon examiners from above. That's the way to do it without incuring the cost of appraisal. On an auto claim about a decade and a half ago I had to go all the way up to Farmer's vice president of claims before I got someone to actually come and look at my car, but finally I found the executive who didn't want to be bothered and ordered those down the ladder from him to do something about my claim.

An acquaintance who does commercial work here in Houston was telling me his 'Ike' story last week .

The first staff adjuster denied his HOB claim by saying the roof tabs were meant to come loose and 'release' the wind forces on the roof, even though this resulted in creases in the shingles where they had folded back.  Since the roof shingles had performed properly, the interior damage was also not covered.  After giving the adjuster a time to begin laughing at his own poor joke and he not doing so, my friend ran him off & called the carrier.

The second adjuster got out of his car and started defending the first adjuster.  Insured told him to get off the property & made another call.

Their supervisor paid for the roof & the interior damage, about $12,000.00 after deductible.

Moral: If you are right, somebody will usually listen (eventually) without having to resort to PA's or attorneys & giving up that cash.

Appraisal has become one of my favorite subjects since 2004. Most homeowners and adjusters haven’t got a clue when it comes to this strange animal. First always make your demand and or response in writing by certified mail. Most policies have a time limit for the other side to respond by naming their appraiser. If the other side does not respond, you then get a lawyer to get an umpire appointed. Once the umpire has been appointed, proceed and obtain a signed appraisal award. Present the award to the other side. A payment should then be made per policy provisions.

Most people don’t realize the insured or their attorney may appoint themselves as the appraiser. (Unless prohibited by the policy, statue or case law.) The entire loss is subject to appraisal. You would be surprised by the number of people who think scope of loss is not on the table.
Insurance companies have to be careful in not responding to a written appraisal demand. In most states you are stuck with the appraisal award as a final establishment of damages. We have only found one legal treatise on the planet that address appraisal. This should be a clue as to how weird this little duck can be

Cost of repairs can only be determined when the appraisers determine the "SCOPE" of the loss. Appraisal can not be delayed due to any coverage dispute. Any appraisal award is subject to available coverage and any limiting clause in the policy. The insurance carrier ALWAYS retains any coverage defense to the appraisial award. You can always file a Dec Action to determine coverage without being in a full blown lawsuit.

Alan points out a rather unusual aspect of appraisal in his 3:21 PM post. This aspect is generally not recognized by either the insured or the inurer. Either the insurer or the insured can request appraisal. The other party has a certain time period to name their appraiser. If they do not, the initiating party can then name an umpire without consulting the other party. Appraisal requires only that two of the three appraisers agree on the amount. Therefore, appraisal can be completed with only two appraisers (one of which is the umpire). The appraisal award can then be presented to the other party as a fait accompli with a demand for payment (on the part of the insured) or as a done deal (on the part of the insurer).

I assume that, in dealing with homeowners claims the court would be somewhat lenient in overturning such an award if the insurer is the one using this method. However, with a more sophisticated commercial insured, the courts may let the award determined by the insurer and umpire stand.

On the other hand, if a homeowner is the one unilaterally choosing the umpire because the carrier did not respond to the demand, the court would most likely let the award stand because the insurance company would theoretically have a higher knowledge of how the process works.

I agree, Alan, that appraisal is a strange creature. Even many attorneys continually get appraisal and arbitration confused. I am dealing with one of those right now who keeps trying to treat the appraisal as an arbitration. We have even had to remind the court appointed umpire that this is an appraisal, not an arbitration. There can be no "splitting the difference and we're done". Two of the appraisers (including the umpire as a third appraiser) must agree on a figure.

Bear in mind, however, that an appraisal award can be appealed by filing suit. It is not final in that sense.

In the original scenario that started this thread, I would not go the appraisal route. It would be too expensive for the potential recovery. I would, however, raise a ruckus and wreak havoc until I was satisfied that my claim had been fairly adjusted. There are so many free ways to do just that.

Alan brings up a good point - if the person is a (presumably competent) IA, and no laws or policy provisions prohibit it, why not name yourself the appraiser?

Appraisal clauses differ by policy type and laws governing them vary by state. Given the fact scenario, there really isn't enough information to say if Appraisal is wise. If the only issue is the amount or cost of hail damage to a building, then it could be. But if the carrier came up to $5400 from $211, then it may be wise to just continue negotiating because it looks like they acknowledged some hail damage. If the scopes are the same and the only difference is the amount of the estimates, then the key is whether the difference between $5400 and whatever the poster's claimed damages are significantly exceeds the value of their own time plus 1/2 of the umpire's fees. If so, then Appraisal may be worth it.

However, the poster may be claiming $6000 in hail damage and $15,000 in termite damage for all we know. In cases where there is a coverage question relative to the disputed amount, you can bet a carrier would file suit if they lose, and some states (like Florida) have appellate rulings that state coverage issues and determination are a judicial question and not to be decided at Appraisal.

This link summarizes some appraisal rulings in different states:

http://www.claimsjournal.com/articl.../92717.htm