I listened carefully to a speech, Point/Counter Point – Update on Appraisal and Insurable Interest Principles of Property Insurance Procedures for the Public Adjuster, given by attorneys Jeffrey Diamond and Wayne Taylor last Tuesday at the Georgia Association of Public Insurance Adjusters Spring Conference. Taylor commented that it is unnecessary to file a lawsuit to appoint an umpire. He merely sends a letter to a judge and asks for an umpire to be appointed.

My extra-sensory perception and projection must have been working really well because a couple of days later, I received an unsolicited email from attorney Tom Hamrick from El Paso, Texas regarding the same topic. He is giving a speech at the Texas Bar’s 12th Annual Advanced Insurance Law Course. According to Tom:

The topic is listed as “Appraisal / Adjustments of the Claim”—but in reality it is “Things You Might Want To Consider On Your Way To The Courthouse.” The presentation will cover subject matter jurisdiction and ethical considerations when asking the court to appoint an umpire.

I will not steal the thunder from Tom’s speech and his presentation, but the procedure for appointing an umpire may not require the need to file a lawsuit. A typical appraisal clause states:

If we and you disagree on the value of the property or the amount of the "loss," either may make written demand for an appraisal of the "loss." In this event, each party will select a competent and impartial appraiser. You and we must notify the other of the appraiser selected within twenty days of the written demand for appraisal. The two appraisers will select an umpire. If the appraisers do not agree on the selection of an umpire within 15 days, they must request selection of an umpire by a judge of a court having jurisdiction….

Nowhere does it state that a lawsuit must be filed to appoint an umpire. This is the topic of Hamrick’s speech, and I will let you know of his conclusions next month—including important ethical boundaries for lawyers doing so. However, Wayne Taylor sends letters and yours truly has done the same.

Positive Thought For The Day

Positive thinking will let you do everything better than negative thinking will.
       —Zig Ziglar

  • shirley heflin

    Dear Chip:

    This is one of those situations where it really depends on who the involved parties are,whether or not they like and/or respect each other, have total disdain for each other, and a host of other factors. Sure, it should be a simple thing for the Appraisers to agree upon an Umpire but I have witnessed situations where a lawsuit was necessary and, geez, since we’re going to incur the filing fee for such a nominal task, let’s just throw everything in there and get going with litigation!

    Shirley Heflin
    Tampa, FL

  • Don Garrison

    As an an owner and operator of Garrison and Associates since 1975, and a Public Adjuster since 1986, this article was very interesting and informative since I have been advised by several local Attorneys that a lawsuit must be filed on several aspects of the Appraisal Process. In keeping with their advice, early on considerable sums of money was spent in order to comply.

    In my mind I could not see the reasoning presented and with a little stubbornness, I decided to go it alone and see what response would come from the Insurer and/or their Attorney.

    In the first instance, we were approaching the end of the three year statute of limitations and the Insured did not want to incur the costs of having a lawsuit filed. Instead a Demand for Formal Appraisal was sent to the Insurer’s Attorney. The demand was honored and a stay was placed on the Statute during which time work was took place on the extremely complicated Contents Inventory. All in all, approximately a year and a half.

    Now to the Appointment of the Umpire (different case) – In the same manner I could not understand why a lawsuit was necessary in SC, just to get a Judge to Appoint. My first was a Petition to the Probate Judge to appoint an Umpire. She did as requested with no questions asked. This was an estate case and I felt the Probate Judge would be the logical Judge and it worked perfectly.

    Just thought I would provide these actual situations since they relate to this article. I really enjoy reading from Property Insurance Coverage Law and always learn a lot from the postings as time permits me to read.

    Only since 2010 have we in SC been able to obtain a PA License; the year the law was changed. I do not understand why it took so long for SC to recognize the need and work of the PA. From a review of my files, it becomes immediately recognizable the Insuring Public needs help on large losses. My work is done on the basis of accomplishment; if I do not produce additional recovery for the Insured, they owe me nothing. I am happy to say that situation has never arisen.

  • Chip,
    Good point in the issue of court-appointed umpires. It is crucial to read the language of the appraisal clause very carefully because they can vary substantially on WHO has the authority to make the request. Some clauses use the language you referenced by saying “THEY” can request that the appointment be made by the court. Other versions say “YOU or WE” may request that the appointment be made. I have made requests as the appraiser and it went through pretty smoothly. If it is the “YOU or WE” process, generally that is being done by the attorneys … and SHOULD be done by mutual agreement and NOT as a “race to the courthouse!”

  • Brian M

    I am in a situation where my adjuster and the other adjuster cannot agree to the umpire and the court says I have to file a civil suit for them to appoint one. It is a “they or us” appraisal clause. In ohio.