Moved from the “Is granule loss considered hail damage” thread to here to remain on topic:
rbryanhines Posted - 03/26/2004 : 21:31:42
The bottom line when adjusting a claim is to follow the guidelines in claims handling (time tables, documentation, ect..). Assuming the above mentioned is done, then all that’s left is to make the right call. Your job is to adjust the claim properly. It is not to make the Insured feel "warm and fussy". Inspect once, if there is no damage then submit the file with no damage. If the insured or his roofer feels there is damage then reinspect. If your reinspection confirms your first opinion, explain to the insured your position and his right for appraisal under the policy. You've done your job, so sleep well.
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LarryW Posted - 03/26/2004 : 22:17:43
rbryanhines: The appraisal process outlined within the homeowner's policy is only meant to be used in the event that there is a disagreement over the amount of the loss. Not the cause of loss and not the fact that a loss occured. If everyone agrees the roof is a total and disagree about the cost to replace it, then the appraisal process is appropriate. If the disagreement is over the cause of the loss, the appraisal process is inappropriate. If the disagreement is over the fact of a loss (as in whether the roof was damaged or not), then the appraisal process is inappropriate.
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alanporco Posted - 03/26/2004 : 23:08:48
LarryW, What policy provision would be available to a policyholder per your post @22:17:43 if there is disagreement involving cause or something other than the cost? Don't say the policyholder can sue. Oh, they can sue, BUT the court will send it back to the appraisal process because that must be done before one can sue.
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LarryW Posted - 03/26/2004 : 23:31:38
alanporco: The appraisal process is purely optional. Both parties have the option to invoke it. It does not have to be utilized. It can or should only be utilized only for its stated purpose which is to resolve a disagreement about the amount of the loss. The only option I am aware of, other that the policyholder filing suit)is that arbitration may be undertaken, but then only if both parties agree to do so. And that is typically outside the adjuster's scope of authority. I am no attorney, but i doubt the court would send it back. The court cannot invoke the appraisal process, only the two parties to the contract may do so.
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alanporco Posted - 03/27/2004 : 00:09:09
LarryW, I don't know of any policy that provides for arbitration. Appraisal is basically arbitration. The insurance industry likes to use their own jargon; unfortunately, they choose words that have different meanings to the rest of the world. As an example: Depreciation. Ask any CPA what depreciation is to an accountant, it is different than the depreciation used by the insurance industry. I started in this industry as a broker of primarily commercial insurance. I can remember many an accountant going nuts trying to figure out what information was needed to complete Loss of Earnings applications; same or similar words, different definitions.I have seen 2 claims where the policyholder sued without first going through appraisal. In both cases, the court said that, per the policy, all terms of the policy must complied with before suit can be brought. Here I refer you to the policy section titled "Legal Action Against Us." I live in California, maybe the courts here do it different than where you reside.The Appraisal clause states that if there is a disagreement about cost, either party can invoke appraisal. If the adjuster/insurance company says only half the roof is damaged and make their settlement offer based on that and if the insured believes that the entire roof is damaged, obviously there will be a disagreement about the cost. Thus appraisal. I have also seen insurance companies use appraisal in these cases when they feel they are right. Often times they win because the insured based their position on what some contractor had told them.
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rbryanhines Posted - 03/27/2004 : 01:56:43
Actually Larry, it depends what state your in. Some states don't allow arbitration. In those states, everything (cause and cost) is handled under appraisal. You're correct that in some cases appraisal is optional. However, a judge will typically send the case to arbitration/appraisal before he/she hears the case. My point was that as an IA adjuster just handle the file in a professional manner and make the right call. After that let management handle it.
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LarryW Posted - 03/27/2004 : 02:45:19
Alan: You are right, I guess, appraisal is similar to arbitration. But it is different. Arbitration is a process where a panel of people or an arbiter will hear both sides of an issue and the panel or arbiter will determine which party is correct. The policy does not provide for arbitration. I was responding to your question concerning an insured's options, but re-reading your earlier post I see that you asked what policy provisions are available to the Insured. The insured has one option (in the case of disagreement)under the policy: Invoke the appraisal clause of the policy. All of his other options are extra-contractual. If an insured files suit without invoking the appraisal process, the company may invoke the appraisal clause and may make that point in their responsive pleadings. That being the case, the courts will, as you point out, require compliance per the "legal action against us" provisions of the policy. If both parties agree that half of the roof is damaged and they agree on the "amount of loss" or cost to repair that damage, there is no dispute. The insurance Co. should pay the undisputed amount of the claim. Concerning the other half, the dispute is not about the "amount of loss" or cost of repair, but instead the fact of loss or cause of damage is being disputed and that is not subject to the appraisal clause of the policy. As you point out, jargon comes into play or gets in our way here. The first thing the adjuster hears when he/she offers settlement is "I do not agree with the amount of the loss which you are offering. My roofer says it will cost $5,000 to replace my roof, but you say my loss is $2,500 to replace half of it". I guess the best way to explain it is that you have to agree on the loss (damage) before you can agree on or dispute of the amount of that loss. In this example, the loss is not agreed. Unless or until you can agree on the scope of the loss, the amount of the loss can neither be determined nor disputed. Suppose a roofer insists the roof is hail damaged and needs to be replaced and gives you an estimate of $5,000. You inspected it and you found no hail damage. Is your dispute over the amount of the loss? No, you are disputing that there even was a loss. A question of fact for a court to decide. On the other hand, if you agree the roof needs to be replaced because of hail damage, but your estimate is $4,000, then you disagree on the amount of the loss. Now lets go to appraisal.
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LarryW Posted - 03/27/2004 : 03:13:38
rbryanhines: Hurricane strikes with major flooding. Policyholder has no flood insurance. The insured's oceanside house is insured by your homeowners policy in the amount of $300,000. There was one inch of rain with the storm, but six feet of floodwater (with a clear water mark) inside the insured dwelling. You agree with the insured's contractor that the wind damage on the roof will cost $250 to repair, but he says the interior damage of $260,000 is form roof leakage. The insured demands appraisal. Now what?
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Czar Posted - 03/27/2004 : 07:13:05
Thank you all for your replys and suggestions. As a multi-line local independent, I usually have more then just hail claims on my plate running around after truck losses, house fires, and the occasional slip and fall. I will attempt to apply the suggestions that I have received here, but unfortunately I do not alway get the backing from the carrier when I report no damage. It seems they want the insured to feel "warm and fuzzy".Thanks again
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katadj Posted - 03/27/2004 : 08:01:56
The Appraisal process is one that is mis-understood by many.A)The process can be invoked by any party to a policy which contains the clause. ( most P&C policies contain the clause, and the verbiage may differ)B)The process is required, prior to bringing suit, but suit can be filed prior to the process.C)Depending on the State, a local official of jurisdiction (Judge) can require compliance even if in suit.D)The process is used to bring a swift resolution to the claim, in lieu of the bringing of suit.E)The process is to resolve any dispute between the parties, except COVERAGE.F)Both parties do NOT have to agree to the process.G)Either party can invoke the appointment of an umpire, (required prior to inspection) without the consent of the opposing party, if the appraisal timelines are not met, or if the opposition “fails to act” the appraisal can be terminated.H)The ONLY decision the umpire is required to make is the differences between the appraisers. (i.e. they agree on everything except the price of a teacup, or they disagree on the entire loss)I)Any two (2) signatures on an appraisal award are binding and if accepted by the carrier is normally paid. However the appraisal can be vacated for proper cause or the carrier reserves the right to not pay and then the process of suit will follow.The CADO convention of 2000 had a lengthy discussion on the topic and supplied all interested with documented information.There finally is a book written on the subject and is available from the author. It is excellent and notes many references to case law.
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Appraisal - What is it for?
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Posted - 03/27/2004 : 09:02:00
