Public adjusters in Florida have routinely appointed themselves as appraisers for their policyholder clients. This generally saves the policyholder money and provides a person already familiar with the loss and ready to move the appraisal process along. However, based on the trend and discussion in legal court cases, it appears that this practice of self-appointment will be a thing of the past.

The National Association of Public Insurance Adjuster’s counsel, Brian Goodman, gave an excellent presentation a year ago about the explosion in the number of appraisals as a means of resolving property insurance disputes over the last two decades. Steve Patrick, Insurance Appraisal and Umpire Association, The Windstorm Insurance Network, and others are teaching people how to be appraisers and umpires. So, the changing state by state rules regarding qualifications of appraisers is something impacting a lot of claims and people involved with this process of dispute resolution.

A recent Florida appraisal decision stated and held the following on this issue:1

The insurer asks that we conclude, as a matter of law, that an insured’s public adjuster cannot later be appointed the insured’s disinterested appraiser where there is a contingency-fee arrangement. But we can resolve this issue on narrower grounds: the actions of the insured’s appraiser combined with his financial interest.

Here, the insured signed a contract with the public adjuster entitling the public adjuster to a portion of any recovery from the insurer and assigning a portion of the claim to the public adjuster. Next, the public adjuster inspected the property and submitted the claim to the insurance company. Later, the public adjuster sent a letter appointing himself the appraiser.

On the facts of this case, we easily conclude the public adjuster was not ‘disinterested’ and reverse the circuit court’s judgment. On remand, the circuit court should enter judgment for the insurer on the issue of this specific public adjuster’s ability to serve as the disinterested appraiser for the insured.

I would encourage readers of this blog and those interested in Florida appraisal to read the two concurring opinions. One suggests that a contingent fee agreement also prevents one from being an appraiser while the other points out an argument against that is policyholders can better afford to retain appraisers on contingent agreements.

These discussions are academically interesting, but the trend is that contingent fees in Florida appraisals are not allowed and public adjusters appointing themselves as appraisers is not allowed in Florida appraisals.

Thought For The Day

We know that we cannot live together without rules which tell us what is right and what is wrong, what is permitted and what is prohibited. We know that it is law which enables men to live together, that creates order out of chaos. We know that law is the glue that holds civilization together.
—Robert Kennedy
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1 State Farm Florida Ins. Co. v. Valenti, No. 4D19-205 (Fla. 4th DCA Dec. 11, 2019).

  • Stephen Sarasohn

    Gotta read the appraisal clause. Some policies, like Universal P&C and Olympus, don’t require the appraiser to be disinterested or impartial. The appraiser only has to be competent.

    • Another Opinion

      How would any of the carriers appraisers be disinterested and/or unbiased if a large portion of their income is derived from the same carriers that appoint them on a regular basis?

      • Chip Merlin

        You raise a legitimate point and maybe they are. Maybe cases will be developed about that in the future.

        My point is that if you read the recent cases and the judge’s opinions, the days of public adjusters appointing themselves as appraisers on their own claims have been prohibited in some matters and may soon be prohibited in all based upon the reasoning and rhetoric of those cases.

        Public adjusters may take the more practical approach and simply appoint others rather than themselves.

  • Dean Gutierrez

    Appraisals should not have the PA NOR the INSURER as an appraiser to be impartial. Appraiser should not have any bias. If the resolution gives the PA an additional % of Moines he’s not bias. Also how is he/she suppose to be impartial if he/she’s the one who the disagreement is part of the appraisal.

  • Bruce Holmes

    So Chip,
    Should I get certified as an appraiser here and in CA? Don Vern says there is a big shortage of Appraisers in CA. …and I am not biased, I just try to tell the truth to the best of my abilities.