Over the years, the appraisal process seems to have become more complicated. Appraisal was meant to be an informal way for an insurance company and its insured to resolve claims. In recent years, appraisal has become a big ordeal in California. In order to properly prepare for appraisal, it’s now advisable to have counsel and an appraiser who is an expert. Selecting an umpire experienced in calculating and handling the damages is also important to the appraisal’s outcome. Essentially, appraisal is now like a mini-trial. When an appraisal award is granted, the insured may seek to have the appraisal award vacated if the insured disagrees with the award damages calculations. Appraisal has limitations. It’s good to keep in mind that appraisal is not the only way to resolve a claim without litigation. If an insurance company is amenable, there are other alternatives, one of which is mediation.
The failure to provide a policyholder with statutory notice of mediation prevents an insurer from enforcing appraisal in Florida. In Universal Property and Casualty Insurance Company v. Colosimo, 2011 WL 2031332 (Fla. 3rd DCA May 25, 2011), the Court noted that insurers have statutory and administrative duties to inform policyholders of the alternative mediation process.
I appreciate all the comments to posts from readers with various perspectives on insurance coverage and the insurance claims industry. I read them all, try to respond when I can, and honestly consider the viewpoint of those writing. This morning, I came across a comment worthy of consideration by all of us regarding mediation and alternative approaches to insurance claims dispute resolution.
Dan Luby of the Florida Insurance News forwarded an article to me, "United Property & Casualty Insurance Company Appraisal Clause." Dan does a fantastic job on relevant insurance news events in Florida and his piece today demonstrates the ongoing trend of appraisal clauses being removed from property insurance policies.
The best way to prepare for an insurance settlement is to prepare the case for trial. Trying to predict what would probably happen at trial is a great way to gauge the value of an insurance dispute.
I am writing this while flying to New Orleans for a mediation tomorrow morning. This blog post may be removed if the matter settles–so read quickly.