You might be surprised to learn that Florida has no licensing law that governs insurance claim appraisal. Appraisal is used for residential and commercial insurance claims when there is a dispute in the amount of property damages. Appraisals have been used to value small residential claim disputes for only $5000 or $10,000 and large commercial insurance claim disputes in the multi million dollars.
Appraisal is known as an alternative dispute resolution that is purposely designed to be quick, less expensive and uncomplicated by court rules.
Many different people have been hired to be an appraiser, such as a roofer, general contractor, company adjuster, public adjuster, forensic accountant, engineer, marine surveyor depending on the type of loss and expertise required to know how to price out the damages.
In order to seek appraisal under the insurance policy. The insurance policy must have an appraisal clause. Similar to the following below.
Appraisal. If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may re-quest that the choice be made by a judge of a court of record in the state where the “residence premises” is located. The appraisers will separately set the amount of loss.
If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.
Each party will:
- Pay its own appraiser; and
- Bear the other expenses of the appraisal and umpire equally.
One argument non licensed insurance people makes is that appraisal is not for interpreting insurance policy coverage but only placing a value on the damages. Therefore, no license is required.
I disagree with the above position since in my opinion only licensed public insurance adjusters are licensed to represent the Florida policy holder. It is nearly impossible to not be able to properly interpret an insurance policy and still professionally handle an appraisal.
The further argument is that appraisers do not negotiate an insurance claim? Again, I disagree as how is appraisal not a form of negotiating an insurance claim? My reasoning is Company insurance adjusters are only licensed to represent the insurance companies under their Florida insurance adjusting licenses. I believe it goes against the Florida adjusting law for a person who is licensed to only to represent the insurance company to now represent the policy holder as an appraiser. Since the Florida Department of Insurance has been lax in any enforcement of this issue. It has become common for company adjusters to represent policy holders in appraisal. As a warning, please consider the fact that the company adjuster you might be considering hiring as the appraiser might also be looking for work from the same insurance company that the policy holder has the dispute. I would ask in writing if this potential appraiser candidate has any conflict of interest?
Here are some important considerations a policyholder needs to consider before they hire an appraiser?
In some insurance policy appraisal language, it requires that the appraiser to be disinterested.
This means that public adjusters in some areas of Florida and by certain insurance carriers are being challenged to not be able to act the policy holder’s appraiser. This is an unfortunate issue created by certain insurance companies. As the end result will force policy holders who are being represented by public adjusters to incur an additional fee to now be assisted by an appraiser.
Does their appraiser have the experience to value the type of damages?
If you are going to appraisal on a yacht, it probably better to hire an appraiser that has marine experience. If you are arguing the value of an auto damage, then an experienced auto person would be your best choice for an appraiser.
Does the appraiser have experience in doing appraisals?
How many years and how many appraisals has the appraiser completed.
From a different point of view just because someone is a good roofer, it might not make them the best roof appraiser. Has this roofer handled numerous appraisals? Does the roofer know how to value the damages to the interior of the home? Does the roofer understand how to interpret an insurance policy?
These are just some of the questions or considerations a policyholder might want to consider before they hire an appraiser.