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sam mikhail
Posted on Thursday, June 21, 2001 - 9:25 am:   

I agree with a lot of the above one thing I would like to find out after the umpire came with his numbers and the repair started what would happened if more damage is discovered ?? What happened if there was hidden items or unexpected damages that could not been disclosed at the time of the appraisal??
R.D. Hood (Dave)
Posted on Wednesday, June 20, 2001 - 11:42 pm:   

Jim Lakes is correct in his approach to the discussion.

At the CADO 2001 convention, we had one of the foremost appraisal experts in this country prepare documentation regarding the "appraisal process". If you were in attendance, you have a copy. It is a worthwhile read.

The basic issues are simple, however the process can be lengthy. IF either party to the insurance indemnity contract (aka the policy)disagrees with the settlement,or offer of settlement, based on scope of work or pricing, they have the right to seek appraisal, and this is required prior to suit.

Each parties appraisers are appointed by them.

(They should not NOT HAVE prior knowledge of the loss, NOR should they receive any instruction from the parties that engage their services).

These parties submit, to each other, the names of an umpire. Once the umpire is agreed upon, either by the parties or by a court of jurisdiction appointment, the process can begin.

The appraisers meet, and scope the loss and agree on all that they can.

The ONLY items that the umpire must decide are those upon which the appraisers cannot agree. This can be one, or a few, items or the entire loss.
(That's where it can get really messy).

The umpire renders a decision, and if either one of the appraisers agree, an award is made.

This award can be set aside, can be protested and the claim can take years to settle.

IMHO, if you act as an appraiser or as an umpire the only client you have is the physical damaged property, regardless of who pays you. And your obligation is to determine if the property is damaged and to what extent and how much will it cost in todays market to restore the loss to the pre-loss condition,NOTHING ELSE.

Coverage is not an issue and can never be a part of the appraisal process.
JimLakes (Jimlakes)
Posted on Wednesday, June 20, 2001 - 8:48 pm:   

Harold,

I agree with most of the posts that you have received thus far. There are good points made in all. However, one thing that you stated in your last post is not correct. ďCoverageĒ is not a part of the appraisal process, only the damage amount.

In most all of the appraisals that I have been involved in where the actual repairs have not been made the insurance carriers paid only the ACV amount, regardless of the amount of the award, until the repairs are actually made. That is their option under the policy, if it is an RC policy.

In almost all cases where there was a difference of opinion on the scope of damage, an expert or engineer was called in to determine damages, because most carriers do not want anything left open or left to allow the case to re-open.

All you can do is document and prove your case beyond a reasonable doubt and present it to the umpire and hope that nothing you did would allow the other appraiser an opening to dispute your facts in any way.

Jim Lakes
National Catastrophe Director
RAC Adjustments, Inc.
866.241.6574
Harold J. Geoffrey (Stormadjuster)
Posted on Thursday, June 14, 2001 - 3:24 pm:   

Chuck thanks for your response, perhaps I was not clear in my question. The objective of the appraisal process is to resolve a disagreement as to the amount of the loss. The difference in the amount can be attributed to difference in scope, unit pricing and coverage to name a few. My question is if there is a disagreement in scope should it be addressed in the appraisal. All of these will affect the amount of the loss. With regard to you statement of perception of repairs all estimates are subjective which is why they call them estimates. The actual cost of repair can be estimated but its true cost of repair will not be known until the repairs are made hence the reason for supplements. Iím sure you would agree that their have been times in the past when you have had a disagreement with a contractor on the method of repair or extent of repairs needed. I would appreciate your input.
Chuck Deaton
Posted on Thursday, June 14, 2001 - 10:51 am:   

Harold, from your post I am not sure what "appraisal process" you are referring to.

Unless you are doing "full adjustments" or you have been asked to referee, you are doing "damage appraisals" or "agreed damage appraisals.

The "appraisal clause" seems to be what David is referring to. In that case you would be one of several referees.

Harold seems to be reiterating the old saw - There ain't no reality it's all a matter of perception. The homeowner and his contractor sees damage and the damage appraiser/adjuster doesn't

Here are my thoughts on the subject.

The first step, in the adjustment process, is to check coverage.

A "scope of damage" is the second step in the adjustment process.

A "scope of damage" is exactly that. A "scope of damage" is an inventory of damaged items and it lists the damaged items, with accurate descriptions, measurements and quantities.

A "scope of damage" occasioned by a specific occurrence is something else. This type of scope is limited to items damaged by a specific peril. As "damage appraisers" this is what we normally do.

There could be a "scope of damage" from the wind peril and a "scope of damage" from the flood peril involving the same risk and be from the same occurrence and be covered by two different policies and the two losses could be handled by two different damage appraisers.

Generally what you and I are doing is an "agreed damage appraisal" from a specific covered peril.

We go to the risk, scope the damage, and write an estimate. For example, most of the time we already know that that a Homeowners policy provides coverage for hail and that the damage is probably limited to the exterior. We visit the risk "scope" the damage and write an estimate using prices correct for the area.
Harold J. Geoffrey (Stormadjuster)
Posted on Wednesday, June 13, 2001 - 8:54 pm:   

I hate to muddy the waters but lets say the issue of scope comes up on the necessity of replacing something that is thought to be damaged in the course of repair but has not been actually damaged. For example replacing a wall mirror that is not damaged because it sits on top of wood or tile floor and the insured thinks it will break when the tile is removed. It comes down to one personís opinion of what needs to be replaced. Who is right, no one knows until the actual repairs have been completed. Or lets say scope is to include items that appear to fail (normal Wear & Tear) and are excluded under the policy for example an appliance. One personís opinion of the failure differs from the other. Scope would now involve coverage issues. Any finally, if a carrier has a right to repair the damage why would the appraisal process preclude that?
David G. Dye (Davidgdye)
Posted on Wednesday, June 13, 2001 - 6:00 pm:   

My personal experience is a scope is a good starting point. You can determine if the two appraisers are in agreement on any items, if in agreement, then that is an area that only needs to be added into the award.

If you are referring to a scope of work to be included in any award, there is no need for that. Remember in an appraisal award any two signatures and a dollar amount are the only requirements to conclude the process. Ideally both appraisers and the umpire will be in agreement and sign. But, again any two signatures and a dollar amount equals an award.
Harold J. Geoffrey (Stormadjuster)
Posted on Wednesday, June 13, 2001 - 8:57 am:   

Is scope of a loss to be part of the appraisal process? I have heard different points view and have seen carriers adopt opposing views. I wonder if there is any case law to support either position? My personal belief is that it is not.

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