INSURANCE POLICY (APPRAISAL CLAUSE)Settlement Dispute Resolution
What happens when there is a dispute regarding a claim settlement? Oftentimes one party institutes a lawsuit against the other whereby costly and lengthy litigation for both parties ensues.
When settlement amounts are in dispute, the parties involved are most often frustrated, communications have deteriorated, and when one party may or may not understand the coverage limits within the policy contract, things can and often do get out of hand. Threats are often made, lines are drawn and the settlement negotiations and communication come to a halt whereby the matter remains unresolved. What’s next?
This may be the time for either party to consider resolving their differences through and by the “Appraisal Clause” provision as found in most policy-contracts or as agreed upon by the participants. The “Appraisal Clause” was designed to establish a procedure to allow disputed amounts to be resolved by independent, impartial and disinterested parties; in a fair and equitable manner, without legal activities and the associated costs and time which are commonly excessive and additionally burdensome.
The “Appraisal Clause“, as oftentimes found within an insurance policy contract, is straightforward and binding (both parties are bound by the final award). Lawyers are not required and the length of the process is governed by the complexity of the loss and/or policy terms and conditions. The result of the “Appraisal Clause” is somewhat less formal than arbitration or mediation and is far less costly and time consuming than litigation.
To begin, each party (“principle”) seeks and appoints an independent (disinterested) and impartial Appraiser. From that point forward the principals are no longer involved in the dispute resolution as each Appraiser must independently assess the loss related damages and attempt to reach a consensus with the other Appraiser for a reasonable and equitable resolution and/or settlement.
Should the two independent Appraisers fail to reach an agreement, they will then submit their findings to a chosen Umpire; who (depending upon the terms within the policy/agreement) was either selected prior to, or after the Appraiser’s unsuccessful efforts to resolve the dispute.
An independent and disinterested Umpire, selected and agreed upon by the two appraisers, will then review the information prepared and submitted by the two Independant Appraisers and render his or her final decision; a decision which is binding upon the participating parties.
To be an effective umpire, the umpire must also be impartial, willing to listen, ask questions, perform limited research and be of good moral character and reputation. An Umpire who has a vested, undisclosed interest or reward must be avoided or disqualified at all costs. If necessary, ADE will act as or act diligently in obtaining the assistance of a truly unbiased and independent Umpire.
The most difficult aspect of the “Appraisal Clause” is ensuring that each party’s chosen Independant Appraiser is truly independent, unbiased and disinterested.
Because our services are rendered to individual consumers, self insured organizations, Risk Management groups, insurance carriers, local, state, federal governmental and judicial entities, as well as legal professionals and their clients, ADE activities remain unbiased and truly independent. Most other so-called “Independent Appraisers” do not avail their services to all parties.
The spirit of the Appraisal Clause is to resolve disputes fairly and to do so in a timely and cost effective manner. Through the “Appraisal Clause“, disputes can be resolved relatively quickly, economically, equitably and amicably when compared to mediation, arbitration and litigation.
We have found instances whereas one party may select an actual employee or long-term service provider of their company as their chosen Appraiser. We find this not to be a reasonable or prudent choice because the chosen Appraiser cannot possibly be considered independent, impartial or without prejudice; while perhaps in rare instances contractually allowable, such unreasonable activities could not possibly lend to the fundamental spirit and purpose by which the “Appraisal Clause” was conceived. Such actions may also open the insurer to additional and avoidable liabilities. To the benefit of all parties, ADE will work diligently to ensure the true spirit and principle of the “Appraisal Clause” is maintained throughout the process.
Auto Damage Experts, Inc. representatives have served as Appraisers and Umpires in many “Appraisal Clause” related matters. As a result of our interacting with numerous other Independent Appraisers and Umpires across the country, ADE has developed a well earned and deserved reputation for fairness, expedience and professionalism.
ADE firmly believes the “Appraisal Clause” form of claim resolution can and does provide a rational and prudent solution at a reasonable cost for those parties who participate in a practical and principled manner. We have successfully completed Appraisal Clause activities across the country and we stand ready to assist you.
Auto Damage Experts provides additional Auto Appraisal related services including, but not limited to: Auto Appraisals of Physical Damage, Total-Loss Replacement Auto Appraisals, Auto Appraisals for Diminished Value, IRS Donation Deductions, Bankruptcy, Divorce, Estate Property Settlements, Property Damage Tax Deductions, Estate Liquidation and others.