Controversial Bill in the House on Appraisal

Most times, Policyholders and Consumers don’t get intimately familiar with their insurance policies and the provisions until a claim destroys or damages their home or business.

House Bill 79 addresses a provision called appraisal, the alternative dispute resolution process that is in some policies.

While the appraisal clause goes back over 100 years and was in the standard policies in the early 1900’s In Florida, the trend has been for insurance companies to yank out this policy provision from your insurance contract so policyholders either had to take the dish the insurance company was serving (denial, low ball payment or delay), or file suit.

Some companies have started to add back this appraisal provision to the policies written in Florida.

Here is what one client’s policy says about appraisal:

6. 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 request that the choice be made by a judge of a court of record in the slate 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: a. Pay its own appraiser; and b. Bear the other expenses of the appraisal and umpire equally

This bill is not final and I anticipate many, many changes. The most recent amendment is here.

But the question I pose this Sunday morning is whether our legislature is making sure it protects consumers?

We have not had a hurricane hit the state in over nine years and memories seem to be fading about those losses.

Take a look at the appraisal bill in the version that is the most up to date. The question is: Does this bill really help consumers?

Also look at the video of the presentation made on Thursday to the Regulatory Affairs Committee. The discussion of House Bill 79 begins around the 13-minute mark.

We would like to hear your comments about appraisal and this bill.

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Comments (5) Read through and enter the discussion with the form at the end
Mike Rump - January 17, 2016 11:50 AM

Yes indeed Representative Artiles appraisal bill is a work in progress and the final version if it passes probably will have some changes. However, it has been nice to see all of the stakeholders working together (finally) to come up with a product that addresses concerns from all sides. It is my belief that consumers should have the option to invoke appraisal and it is a far less costly and time consuming process than litigation. It is my strong belief that those carriers that effectively wrote appraisal out of their policies made a huge mistake and many of them have also recognized this as well. They have paid a price with huge increases in litigation costs and they have also damaged their relationships with their own policy holders.

Let's hope that the discussions continue and we can bring back appraisal as an effective dispute resolution process for all property policyholders. If we don't, and we get hit with another round of hurricanes this year, the results for policyholders, the courts and carriers could be disastrous.

John Minor - January 17, 2016 1:35 PM

Thanks for the update. Your blog is am excellent source of information on the industry. I believe appraisal can be an excellent mechanism to quickly resolve disputed losses and help owners and insurers get on with their business at hand or their lives respectively.

I suppose the SB 336 is the companion to this House bill. What I like is at least in the language quoted it does not require bi lateral agreement to go to appraisal and the award barring bad acts is enforceable.

Mr. Frazier - January 18, 2016 9:01 AM

Nicole,

I'd like to thank you for posting this blog.

I wasn't able to view the amended proposed legislation as the link you have only had one page coming up. So, I watch the video and was quite surprised that it appeared to be more about limiting who can act as an appraiser or umpire. Basically, back ended licensing of Appraisal and a full frontal approach to licensing Umpire's.

Both have a very special place in the insurance property damage claims world.

The sad truth is that there are much more important things that need to be addressed regarding the appraisal process than this ill conceived piece of legislation.

I'll name a few items that I believe to be of much greater importance and consequence.

1.) Insurer's cart blanch refusal to go to appraisal, when
legitimately Demanded by an insured, thus violating the appraisal provision in the insuring agreement. With no REAL recourse for doing so.

2.) Insurer's controlling their appointed Appraisers actions and decisions.

3.) Insurer's trying to restrict anything from being appraised EXCEPT what they have already agreed to pay.

4.) Insurer's removing the appraisal clause completely from their policy, thus violating state law OR forcing the insured to engage in very costly litigation and delayed claim payments.

5.) Insurer's completely disregarding the appraisal provisions requirements in the insuring agreement that THEY drafted. I'm currently working on an appraisal where the insurance company took over 40 days to name their appraiser, when the appraisal provision in the policy expressly said the appraisers must be chosen and the opposing side notified within 20 days of the Demand for Appraisal being made and received.

These would be more appropriate things for the legislature to address.

What say you?

Mac McIntyre - January 18, 2016 11:20 AM

....what was written doesn't indicate that either appraiser should be a "disinterested third party"...(as well as the umpire)....i have seen some policy indications that include this requirement...if an insco appraiser..(usually an I.A. that relies on the insco they are representing for more than %25 of it's yearly income ) doesn't agree with me as to the extent of damage and the cost to replace i pull the "u r not a disinterested third party ...as u r trying to save your account w/ the insco"..... it's amazing how many come around to paying for a "FULL" replacement on a roof!!!! most of the insco appraisers try to pay for a "repair" just to stay in "good standing" with the insco.....until they run into me on a roof !!!

Mac McIntyre - January 18, 2016 11:20 AM

....what was written doesn't indicate that either appraiser should be a "disinterested third party"...(as well as the umpire)....i have seen some policy indications that include this requirement...if an insco appraiser..(usually an I.A. that relies on the insco they are representing for more than %25 of it's yearly income ) doesn't agree with me as to the extent of damage and the cost to replace i pull the "u r not a disinterested third party ...as u r trying to save your account w/ the insco"..... it's amazing how many come around to paying for a "FULL" replacement on a roof!!!! most of the insco appraisers try to pay for a "repair" just to stay in "good standing" with the insco.....until they run into me on a roof !!!

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