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Independent Appraiser Uses Policy To Protect Policyholders

Posted by Joe Brennan | Posted in Fire Insurance Claims, Homeowners Insurance, Independent Appraiser, Insurance Advice, Insurance Claims Help, Insurance Dispute | Posted on 02-17-2010


independent-appraisers-and-umpireIndependent Appraiser Uses Policy To Protect Policyholders

Almost all insurance policies have an appraisal clause that allows the parties of the insurance contract to resolve disputes that may arise during a claim.  Appraisal is for the “amount of loss,” only.  This is the amount of monies it will cost to fully complete the repairs caused by the claim damages.  For instance; policyholders could be forced to use an independent appraiser to settle their differences with the insurance company, using the appraisal process to protect their interests.

In a recent Texas case, JM Walker, LLC v. Acadia Insurance Company, reveals how an independent appraiser and the appraisal process protected a policyholder from mistakes made by the insurance company.  Mistakes that could have cost the policyholder “hundreds of thousands of dollars!”  Each situation can be a bit different simply by how the appraisal clause is worded in the policy, by the type of damage that occurred, and by all the facts pertaining to the loss.

In this situation, JM Walker owned five buildings in North Richland Hills, Texas.  A hailstorm caused damages to the roofs of the five buildings. Walker submitted a claim to his insurance company, Acadia.  However, at first Acadia denied the claim after their adjuster determined that the roofs did not need to be fully replaced, and that the damage that was caused by the hail, did not reach the $5,000 deductible that applied to the policy.

Mr. Walker disagreed with that assessment from the insurance company’s adjuster.  The two parties could not agree, so Acadia executed its contractual right to appraisal.  At first, Mr. Walker tried to litigate the matter in court by filing a lawsuit.  However, the Judge advised that the parties should continue with the appraisal process.  It is not uncommon for judicial courts to suggest this process, as most policies require that all policy provisions be exhausted before entering the courtroom.

Independent Appraiser Were Used

The appraisal process includes two independent appraisers (one hired by each party) and an appraisal umpire.  If the independent appraisers cannot agree on an amount of loss they can submit their differences to the umpire.  The umpire in this appraisal process found on behalf of JM Walker and produced an award for the amount of loss at $423,053.96.  Appraisal awards are binding, therefore, Acadia paid the amount.  (You may recall that their first offer was $0, because they determined the loss to be below the $5,000 deductible.)

JM Walker tried filing an appeal to the United States Fifth Circuit. It was Walker’s belief that he was entitled to more hail damage proceeds and was also seeking additional money for what he believed was “bad faith” actions by Acadia with their miss handling of the claim.

The Court ruled that under Texas law, “appraisal awards made pursuant to the provisions of an insurance contract are binding and enforceable, and every reasonable presumption will be indulged to sustain an appraisal award.”  The Court also ruled that an otherwise binding appraisal may only be overturned in only three situations:

(1) when the award was made without authority;
(2) when the award was made as a result of fraud, accident, or mistake; or
(3) when the award was not in compliance with the requirements of the policy.”

Mr. Walker diligently tried to argue on all three points.  However, the court dismissed his rebuttal on all three.  This appraisal and case is a good resource showing the respect the Texas courts have for the appraisal process. It is my opinion that the Independent Appraiser and the insurance appraisal process protected the policyholder in this situation.  Mr. Walker should be happy the policy had such a clause.  The work that the Independent Appraiser did during this Appraisal was responsible for Walker receiving $418,053.96 over what the insurance carrier said they owe on the claim.

Independent Appraiser Assistance

If you should ever find yourself in an insurance claim dispute with your insurance company, you should truly consider calling an Independent Appraiser to explore your options with the insurance appraisal process.  Independent Insurance Appraisal Services is all we do.  Feel free to call Insurance Claims Group, Inc. at 919-669-9111 to have all your independent appraiser questions answered at NO COST.

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(C) Joe Brennan is President and owner/operator of Insurance Claims Group, Inc., a national independent adjusting, appraisal, and umpiring firm. We will answer your claim questions FREE as part of our FREE Insurance Advice and Insurance Claim Consulting Services.

Insurance Claims Group, Inc.
Joe Brennan
Ph: 919-669-9111
Fx: 919-573-9595

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