What You Need to Know About the Insurance Appraisal Process

Appraisal – most people don’t know that there is a provision in your property insurance policy that provides for you (or the carrier) to invoke appraisal on a property damage insurance claim when not satisfied with the estimated damages on the claim.  What is an appraisal?  When you hear the word appraisal most think of the appraisal that is associated with the value of a property.  Appraisal as it relates to an insurance claim is the appraised value of the damages covered by a property damage claim.

When I first started in this first party claims business five years ago, appraisal was rarely invoked on a residential claim. Most claims were satisfactorily settled without appraisal and we used it only as a last resort or if an insured was not comfortable seeking legal counsel to pursue the claim. Now a days, appraisal is invoked on a regular basis because most insurance carriers are currently refusing to pay a claim fairly without it. My opinion, this is just another delay tactic on the part of the insurance companies in hopes the insured will give up.

Appraisal is a scary word to the insured because most do not know what it means and because of the costs associated with the process. But the word attorney is an even more scary word for lots of property owners because of the believed costs (even though first party claim attorneys work on a contingency fee). We believe the process is worth the additional cost to the insured to successfully get the claim paid for correctly.

Sometimes appraisal is necessary because the carrier wants to make a repair instead of a replacement (estimate low or below deductible). Keep in mind that the property owner is entitled to an insurance settlement that will return the property to pre loss condition and a repair rather than replacement rarely accomplishes this. Other times appraisal will be necessary because the carrier has agreed to a replacement and to cover other collateral damages but is still refusing to pay overhead and profit (O&P) which is necessary for a general contractor when multiple trades are needed to make all the covered repairs.

When appraisal is invoked by either party, each party is obligated to hire and pay out of pocket for their own appraiser. (These costs vary from claim to claim depending on the size and scope of the damages.) When the insured is the party who invokes appraisal by notifying the carrier and naming their appraiser, the carrier then usually has 20 days to appoint their own appraiser and notify the insured. The carrier generally takes every day of the 20 days allowed. This is literally the only deadline imposed in the appraisal process.

Once appraisers are both appointed by each party, the two appraisers must agree on an umpire in case agreement cannot be reached concerning the damages.  The umpire and both appraisers are to be unbiased third parties and therefore should come forth with a fair and just estimate of the damages associated with the claim.  If the two appraisers are unable to agree and the claim reaches an umpire, then both the insured and insurer must split the additional cost of the umpire fee.  Sometimes an attorney will oversee the appraisal process and in these instances the attorney may seek a court appointed umpire rather than the appraisers agreeing on one.  This tactic is used to ensure that an unbiased umpire is named since some policies include language that when appraisal is invoked you must use an umpire from the carrier’s approved list.  (This is perceived as not being an unbiased party if it is someone approved only by the carrier.)  Carriers do not like this race to the courthouse to get a court appointed umpire, but it is at times necessary depending on the language in the insurance policy.

Once an umpire is agreed upon (or court appointed), the two appraisers review the claim damages together in an effort to reach an agreement on the property damage estimate. If they are able to reach an agreement, then the appraisal award is submitted to the carrier for review to make sure that the policy coverages were properly applied and, if so, they pay the settlement award to the insured. If the appraisers are not able to reach agreement, then the previously selected umpire reviews the estimates and damage analysis of both appraisers and the umpire makes the final decision on the award.

People need to understand that the appraisal process result is a final decision and cannot be appealed. This is one reason why public adjusters working on a large loss will recommend that the insured seek legal counsel so an attorney can advise on how best to pursue the claim.

Although the appraisal process is an expense to the insured, we believe it is necessary and worth the expense to force the carrier to adjust the claim fairly. Yes, the insured should not have to be out of pocket these kinds of additional expenses, but unfortunately it may be the only way to get the claim scope of damages fully included and pricing paid correctly.

Let us know if you have any questions about the appraisal process or if you need help with a property damage insurance claim.

Ten Months After Hurricane Harvey and Many Still Haven’t Reached Settlement Concerning Insurance Claim

Ten months after Hurricane Harvey and many folks still have not reached a settlement with their insurance company.  On the other hand, others have reached a “full settlement” and don’t even know that they were shortchanged by the insurance company.  Without the help of a qualified licensed professional, there is no way for them to know.  Yes, I’m talking about a licensed public adjuster.  Desperate times call for professional help and Harvey definitely caused an extremely desperate situation for many.

So many in the greater Houston area were devastated by the floods that Hurricane Harvey brought.  However, the devastation doesn’t end there.  It has been unrelieved as many property owners continue to battle with the insurance companies to pay what they are owed.  Some may have simply settled thinking they were paid correctly.  Many in the business would advise against seeking the professional help of a licensed public adjuster to handle your insurance claim, incorrect in their belief that the insurance companies will just get out their checkbook and pay when it comes to a catastrophe of this magnitude.  This simply isn’t true. Continue reading “Ten Months After Hurricane Harvey and Many Still Haven’t Reached Settlement Concerning Insurance Claim”

Understanding What Your Insurance Policy Says

Most people have some type of insurance coverage – homeowners, health, auto, life, etc.  However, most people are not able to fully interpret the language in an insurance policy and therefore don’t always have a full understanding of whether they are adequately covered or not.  This is especially true when it comes to homeowners policies or commercial property coverage.  As a result, lots of folks may find themselves thinking they had coverage that they don’t or may even find themselves to be underinsured and didn’t realize this until it’s too late.  Do you understand what your insurance policy actually says?

The purpose of insurance is to reduce your exposure to the effects of particular risks.  Insurance serves as a means to indemnify you after a loss and put your property back together to it’s pre-occurrence condition without costing you anything out-of-pocket other than any applicable deductible.  Not having insurance at all is taking a huge gamble and hoping that things work out for the best. Continue reading “Understanding What Your Insurance Policy Says”

The Danger and Disruption a Fire Insurance Claim Causes

The danger and disruption cause by a fire is enormous.  Losses from fire can range from a total loss to a simple clean up of a few walls and everything in between. Each fire claim is very different so hopefully we can help you understand how to speak the lingo and how to set your expectations when dealing with the insurance company.

First, is it safe to enter the home? Not usually.

Assuming that the fire is minimal (in regards to safety), the fire department typically soaks the area when putting out the fire. This creates a potential hazard of wet sheet rock falling from the ceiling. There is also likely broken glass on the floor in addition to other tripping hazards due to the firefighters moving things around in order to put the fire out. In addition, the air is now toxic. Continue reading “The Danger and Disruption a Fire Insurance Claim Causes”

Cleaning Up Your Contents After a Hurricane

‘Tis the season to be jolly and deck the halls with Christmas joy. Some may find that difficult this year as they are still in the middle of cleanup and restoration as a result of the 2017 Hurricane Season. This season was exceptionally tough on folks in Texas, Florida, Puerto Rico and the Virgin Islands.

Some of the issues in Texas involve the damage and contamination caused by the “black” water that destroyed their contents. CAT adjusters flooded the area immediately with the logic and advice that these items might be cleaned, particularly the pots, pans, dishes and glassware. We came across an article actually written by a cleaning company that stated the only thing that could be cleaned to a safe usable level after this contamination is the glassware. This coming from a company who earns its’ living cleaning items. They are referring to contents that were sitting in flood waters, waters contaminated by sewage and chemicals.

Continue reading “Cleaning Up Your Contents After a Hurricane”

Turn Around Your Flood Claim With Professional Help

A flood is never fun to deal with. When it comes to insurance claims, the worst type of claim you can have is a flood claim. Flooding causes a devastating amount of damage, compounded by the fact that you have limited coverage and it can take months to settle a claim. The following is a breakdown based upon my experience on what to expect during a typical flood claim.

How bad is the water itself?

The flood water is typically category 3 water, also referred to as “black water.” Category 3 water can include all kinds of contaminants such as gasoline, oils, sewage, other chemicals and harmful bacteria, salt (if you are on or near the ocean), etc. It is important that you not come in contact with this water or rebuild your home without first cleaning and treating all affected areas of the property that is not being removed or disposed of. Continue reading “Turn Around Your Flood Claim With Professional Help”

Shortage of Insurance Adjusters in Wake of Hurricanes Harvey and Irma

Hurricane season is at its peak and folks are still in recovery mode following the devastation caused by Hurricanes Harvey and Irma. Now, there appears to be a shortage of insurance adjusters, especially in Florida where basically policyholders are having to wait because the insurance adjusters are all in Houston because Harvey was the first to hit.

Insurance companies are advertising for adjusters and trying to build up their rosters to cover the areas hit the hardest. Simply put, they are using anyone with a pulse to help out because of the high volume of claims being reported right now. Property owners are the ones who will be left on the short end of the stick as inspections are being performed by people who just don’t have the experience or expertise to properly inspect and estimate the claim. This leaves huge holes in the estimate, huge discrepancies in the claim value, and makes it even more important for the property owners to hire their own claim professional and have an expert on their side. Continue reading “Shortage of Insurance Adjusters in Wake of Hurricanes Harvey and Irma”

Hurricane Harvey Damages South Texas Crops

Hurricane Harvey made landfall at a really bad time for South Texas farmers. What was looking to be one of the best years ever may now turn into big losses in cotton and rice crops and others. Much of the area is still waiting for the water to go down so they can truly assess the damages. Some say it will take months and possibly a year for the loss totals to come in.

Read more http://at http://www.npr.org/sections/thesalt/2017/09/06/548985185/texas-farmers-suffer-extensive-crop-losses-in-wake-of-harvey


Blue Tarp Law Taking Effect in Texas September 1, 2017

With the pounding South Texas has taken for days now thanks to Hurricane Harvey, people are asking how the Blue Tarp Bill (HB 1774), which goes into effect September 1, 2017, is going to impact these claims.

Consumers and business property owners need to be aware that written “notice” of a claim must be sent to the insurer prior to September 1, 2017 to take advantage of the existing 18% interest rate for unlawfully delayed claims. However, this applies to wind claims, not flood claims.

For a better explanation of the changes and how it may affect you or those impacted by Hurricane Harvey, see more at the following.

Hurricane Harvey Insurance Claims Misinformation


Storm Created Opening or Wind Driven Rain

Lots of folks don’t quite understand the difference between wind driven rain and a storm created opening. It’s complicated. The difference is usually only learned when someone is affected by either term as the result of a property damage insurance claim.

In 2016, the day after Christmas, the residents of Rowlett, Texas learned exactly what it means to have a storm created opening when their homes and lives were ripped apart by tornadoes and severe storms. The next day it rained, and the day after that it snowed, all the while their homes were still open and exposed to additional damage from the bad weather. Clearly the storm created the openings into their properties, so the insurance companies would be paying for any subsequent damage as well, right? Continue reading “Storm Created Opening or Wind Driven Rain”