The Property Loss Appraisal Network (P.L.A.N.) is holding its appraisal and umpire and certification course in Denver. It was a pleasure for me to speak at this event.
In my preparation, I noticed that when I searched Google for DORA Bulletin No. B-5.26, the 2011 and 2014 editions were easily found. However, a revision issued in 2015 did not show up in the first Internet results with Google. So, here is a link to it, and here is the important language:
The Division’s standard for the selected appraiser or umpire is an individual that does not have direct and/or material interest in the outcome of the appraisal proceeding. To ensure compliance with these standards, the Division requires the following:
1. An appraiser is considered “fair and competent” if he or she
i. Is not a party to the insurance contract;
ii. Has no financial interest in the outcome of the appraisal;
iii. Is not a current employee of the insurer or policyholder; and
iv. Is not a family member or an individual with whom the insured has a
personal relationship that could reasonably suggest bias.
2. An appraiser in the appraisal process may not have a direct material interest in the amounts determined by the appraisal process. The appraiser must disclose to all parties any known facts that a reasonable person would consider likely to affect an appraiser’s interest in the amounts determined by the appraisal process, including any contingency arrangement related to payment of the appraiser.
3. The appraiser shall have a continuing obligation to disclose to all parties to the appraisal process any facts the appraiser learns after accepting the appointment that a reasonable person would consider likely to affect the appraisers interest in the amounts determined by the appraisal process.
4. Any insurer, insured or representatives of the insurer or insured, including an adjuster and/or licensed public adjuster, may have direct communication with their own appraiser; however no insurer, insured or their representative may communicate with the other party’s appraiser without the consent and participation by both parties and/or their representatives. Appraisers may directly communicate with each other as part of the appraisal process in an effort to reach an agreed upon settlement amount.
1. The umpire may not have an existing direct and/or material relationship with any party to the appraisal and must remain neutral.
2. The umpire must disclose to all parties in the appraisal process, any known facts that a reasonable person would consider likely to affect the impartiality of the umpire including:
(a) A financial or personal interest in the outcome of the appraisal; and
(b) A current or previous relationship with any of the parties to the agreement to appraise or the appraisal proceeding, their counsel or representatives, including licensed public adjusters, a witness, or another appraiser.
3. The umpire shall have a continuing obligation to disclose to all parties to the appraisal process any facts that the umpire learns after accepting appointment that a reasonable person would consider likely to affect the impartiality of the umpire.
4. The insurer including adjusters, insured and their representatives, including licensed public adjusters and/or attorney, and appraisers, must not have ex parte communications with the umpire during the appraisal process. The umpire shall not have any communication with the insurer including adjusters, insured and their representative, including public adjusters and/or attorneys and appraisers, without participation by both parties and/or their representatives.
One audience member argued that umpires should be able to have ex parte communications with appraisers. His experience has been that appraisers are often afraid to admit to the other appraiser where their view of the loss is not strong. By speaking individually, the umpire can learn about these to help reduce the matters in difference.
What do you think? He seems to raise a valid point.
This Bulletin is for Colorado appraisals. States have different rules for appraisals, and appraisers and umpires should know the rules of appraisal in each state as well as the general laws of property insurance in each of those states.
It is not easy to be a truly great property insurance appraiser. A great appraiser has to be involved in a lot of continuous education about many different areas of construction, adjustment, valuation, negotiation, and property insurance law, in addition to being an expert on the process of appraisal. My hat is off to John Robison and P.L.A.N. for teaching how significant the duties of appraisers and umpires are to the appraisal process.
Thought For The Day
Live as if you were to die tomorrow. Learn as if you were to live forever.