Professional Insurance Appraisals & Estimating

INSURANCE APPRAISAL CLAUSE 

DISPUTE RESOLUTION

What happens when there is a dispute about a claim amount? Very often one party institutes litigation. This is an immediate signal that there will be lawyers involved, years of time will elapse before resolution and both parties will be exposed to healthy legal expenses.

When settlement amounts are in dispute, the parties involved are frustrated or the insured honestly does not understand the coverage limits that the paid premiums provided. Harsh words may have been exchanged and the file remains open, further aggravating the participants. This is the time for either party to consider resolving the differences under the appraisal clause provision in the policy. The "appraisal clause" found in all insurance policies, was designed to establish a procedure to allow disputed amounts to be resolved by disinterested parties.

"Appraisal" is straightforward and binding. Lawyers are not needed, and the time required is governed by the complexity of the loss.

Each party appoints an independent, disinterested appraiser. From that point on the principals are not involved in the dispute because each appraiser must independently access the loss. The appraisers resolve the issues. An independent, disinterested umpire, pre-selected by the two appraisers, stands ready to resolve any disputes between the two appraisers. To be an effective umpire, the umpire must also be impartial, willing to listen, ask questions be of good moral stature and reputation. An umpire that has vested or undisclosed interest or reward other than his hourly rate must be avoided at all costs.

The appraisal clause is not designed to accommodate lawyers. Legal fees are not incurred and the time to settlement is minimized.

Patrick King has served as appraiser and umpire in dozens of appraisal clause files and points out that disputes can be resolved relatively quickly, compared to the time element in litigation and the formal structure of arbitration. King states emphatically "Claim disputes can usually be settled by reasonable parties for a reasonable cost, in a reasonable amount of time." Appraisal clause is binding but somewhat less formal that arbitration and definitely less formal than litigation. We have successfully completed insurance diminished value/loss of value dealing with art value, historical value, use value, research value, age value, new value, sentimental value, monetary value, associative value, commemorative value, educational value and rarity.

We have successfully completed cost effective insurance appraisal clause in Florida, Indiana, Illinois,  Michigan, North Carolina, South Carolina, Louisiana, Mississippi, Tennessee, Texas and Wisconsin.

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e-mail us at:  pbking2@sbcglobal.net

Author:  Patrick B. King

                Patrick B. King & Associates

                         847-679-4747

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