The “appraisal” settlement option has taken on new proportions in the last few years.  KMS, Inc. / CATRAM has experience in this process. I believe that the way we approach the appraisal process provides security, stability and predictability for our clients. 

            As you are aware, there have been many “assaults” on the process over the years.  The intent of the appraisal process is to select competent appraisers, and certainly, I am hoping, impartial ones. Unfortunately, many times, impartiality has been sacrificed.  Both appointed appraisers need to be impartial and this leaves no room for “self-appointment”. We feel that this retards the process and clearly violates the intent of the policy.  There are strategies to circumvent this from happening. 

            One of the most important elements of the appraisal process is the ability to vacate an excessive Umpire award, (Liberty Mutual Ins. Co. v Kennedy, 890 So.2d 539,541, Fla.2^nd DCA 20050 & FS 682.13 (1)).  Unfortunately there have been abuses of authority in this regard.  A carrier’s right to vacate an excessive award lies in the hands of the appraiser!  The carrier’s chosen appraiser has the responsibility to preserve the contractual rights of the carrier and to provide for and memorialize vital facts, including coverage issues, which do not, by statute, belong within the appraisal process.  The carrier’s rights can be waived by the actions of their appraiser! 

            Therefore, we have designed a program aimed at preserving the rights of the carrier and its ability to vacate.  Have you seen a dwelling dispute go into appraisal and turn into a multiple coverage event? We will certainly not consider any artificially heightened estimate of damages for the purpose of presentation to an umpire! We support the involvement of the Department of Financial Services.  There is a strategy to circumvent these unfair practices!  It takes the correct handling of the appraisal from beginning to end.  We have developed specialized forms to help us be consistent in this endeavor.  We immediately demand pertinent information from the other appraiser, which memorializes the elements and details of the dispute, as well as any coverage issues. It is common to expect that the appraisers of a disputed loss enter into a Memorandum of Appraisal prior to commencing.  However, we are not seeing this as prevalent. We have been progressive in requiring this information in an attempt to formalize the appraisal process. Any coverage issues that are identified are again, memorialized in writing to both the insured and potential umpire.  We do not appraise coverage issues!  We represent and document this to all involved in the process.  This preserves our client’s rights. 

            We believe that the appraisal process does not relinquish the responsibility to document damages.  As you know, due to the very nature of the appraisal process, the appraisers are frequently inspecting damages that have previously been repaired.  We do not blindly recommend payment for paid invoices or quotes to repair under the assumption that they represent damage from a covered peril or represent the true scope of damages if proven to be covered.  We investigate receipts rather than rubber-stamp them!

            We do not submit our appraisals to the chosen umpire, incurring additional expenses, unless the other appraiser presents his/her own “appraisal” of the damages.  We require the adverse appraiser to present his/her own evaluation of the damages.  We do not accept deferment to an umpire unless there is a legitimate dispute identified and documented.  

            I saved the most troubling element for my last discussion.  The selection of the umpire is the most crucial element of the appraisal process!  What can be done to eliminate any lapse of impartiality or the misunderstanding of the role and authority of an umpire?  There is no silver bullet here, but the odds of ensuring an unbiased decision can be increased by focus, experience and knowledge of the industry.  We demand an umpire who is qualified to determine the damages in dispute, and one that will physically inspect the damages.  We continue to demand these responsibilities if a court appointed umpire is furnished.  There are strategies here also to vacate a court appointed umpire’s decision. 

            When you submit your disputed damages to your chosen appraiser, you should not feel that you have just relinquished your authority over the file.  The carrier has rights in the appraisal process!  Be assured that we will preserve your rights and uphold the integrity and intent of the appraisal process. 

            We offer Florida Statewide coverage for the Appraisal Process.  And we offer a variety of adjusters with experience in the appraisal process located in Southeast, Southwest, Mid-state and North Florida.