As I have written in past posts, many in New Jersey are making property insurance claims for the first time. The entire experience is new, and they are studying policy provisions. An appraisal provision provides that when the carrier and the insured cannot agree on the value of a loss, they can each appoint an appraiser. The appraisers attempt to reach a resolution on behalf of their clients. If they cannot agree, a third appraiser, called an umpire, makes the final determination. The appraisal process can be an invaluable tool for an insured looking to expedite the claims process, but the question remains, who can serve as an appraiser?
Appraisers must be qualified and disinterested in the outcome of matter. Even the party-selected appraiser must be “disinterested,” meaning “impartial, unbiased, free from partisanship and able to do equal justice between the parties.”1 Further an appraiser “is supposed and expected, in a restricted sense, to represent the party appointing him and within reasonable limits to see to it that no legitimate consideration favorable to the party so appointing him is overlooked by the other appraiser.”2 In other words, there is to be no gamesmanship involved in the appraisal process. The process is supposed to open and honest.
Further, an appraiser must not have a financial interested in the resolution of the claim.
The Court agrees that, absent evidence of having a pecuniary interest in the outcome or being subject to one side’s direction or control, or some other more substantial bias, or other basis to question the appraiser’s impartiality, the Court will not set aside the parties’ agreement to submit disputes to an appraisal . . . .3
As a public adjuster is generally compensated on a contingency basis, they can be considered interested parties and not qualified to serve as an appraiser on a matter where they are currently engaged.
Although retained by one side of a dispute, an appraiser is expected to rise above the dispute and provide an independent and unbiased opinion on the value of a loss. While your public adjuster cannot simultaneously serve as your appraiser, the public adjuster can be an excellent source to find a qualified and experienced appraiser.
1 Heller v. Hartz Mountain Industries, Inc., 270 N.J.Super. 143, (Law Div.1993).
2 Id. Citing American Central Ins. Co. v. Landau, 62 N.J.Eq. 73, (Ch. 1901).
3 Tucci v. Hartford Fin. Services Group, Inc., CIV. 08-4925 JBS/JS, 2011 WL 2555379 (D.N.J. 2011) aff’d sub nom. Tucci v. Hartford Fin. Services Group, 11-3033, 2012 WL 6604597 (3d Cir. 2012).
