The “appraisal” settlement option has taken on new proportions in the last few years. KMS, Inc. has experienced in this process. I believe that the way we approach the appraisal process provides security, stability and predictability for our clients.
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, 2nd 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 statue, 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. We will not agree, without authority, to appraise damages that are new or undisputed. The carrier has the right of inspection and
investigation of new damages prior to agreeing to enter the appraisal process. And the insured is charged with complying with all policy requirements before demanding the appraisal process per case law. There is a strategy to
circumvent any 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 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 accept deferment to an umpire unless there is a legitimate dispute identified and documented. We memorialize the dispute prior to engagement and do not participate in appraising disputes where the insured’s “duties” after a loss have not been fulfilled (with client approval).
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.
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 Southwest, Mid- state and North Florida.

Qualifications / Duties of KMS Appraisers:

 1.   Sound knowledge of current case law? There are issues of causation, coverage and scope that must be calculated and understood in order to negotiate damages successfully.
2.   Experience. Working knowledge of tactics and strategies of both sides of the process, i.e. impartial umpire names, counter initiatives for stalling, low-balling & expert testimony.
3.   Construction knowledge and estimating.  Ability to produce an independent assessment of all residential and commercial damages structural & non-structural, including fungi & asbestos remediation / abatement and containment / disposal. Possessing current software and knowledge of how to effectively utilize it and preserve all documentation.
4.   A solid support system, i.e. KMS central admin, single point of contact.
5.   Organizational verbal & written presentation abilities, i.e. umpire assessment package.
6.   Physical capability of inspection, i.e. dangerous roof heights and pitch.
7.   Deposition experience & file maintenance practices.
8.   Procedural awareness and full disclosure, i.e. keeping opponent in check with regard to the proper order of
goals and timeliness of work product as well as demanding and offering disclosure in writing to/from the opponent and the umpire.
9.   Knowledge of unbiased expert testimony sources.
10.   Knowledge how all of these criteria come into play and in an attempt to vacate an award.
11.   Profile management of Public Adjusting Firms, their staff, and sub-contractors. The advantage goes to the most
prepared appraiser and knowing the modus operandi one’s opponent is an important factor.
12.   Fee management, i.e. efficient use of time and expenditure with regard to experts and umpire travel time, as well as one’s own performance.
13.   Award management, i.e. supervision and involvement of correct award form and dispute recognition, i.e. addressing not only the disputed coverages but also the undisputed and/or potentially futuristic active coverages.
14.   Superior knowledge of residential, e.g. HO and DP series ISO forms as well as commercial policies. Preferably a licensed multi-line adjuster.

Authored by Thomas E. Kosterman, CPCLA, CMR