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Hail Claims: Is The Appraisal Process Fair?

The appraisal process is found in most homeowners’ insurance policies and it is commonly invoked to address disputed property damages. The appraisal process is used to determine the amount of property damage caused by the loss event. (e.g., hail storm, wind storm, tornado, etc.).  There seems to be a lot of controversy as to whether the appraisal process is fair or not and whether the appraisal process should be used to resolve insurance disputes.  The answer to these questions depends on several factors that we will discuss here.

Generally, a homeowner’s insurance policy will set out certain conditions regarding the appraisal process as follows:

If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss.  In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other.  The two appraisers will choose an umpire.  If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the “resident premises” is located.  The appraisers will separately set the amount of loss.  If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss.  If they fail to agree, they will submit their differences to the umpire.  A decision agreed to by any two will set the amount of loss.

Under Texas law, the appraisal clauses provide a process for resolving controversies related to the amount of loss only.  At first glance, the appraisal process may seem fair.  Each party gets to appoint its own appraiser regarding the amount of the loss and both appraisers will select the umpire who will decide the controversy only if the two appraisers cannot reach a decision.  However, there are factors that must be taken into consideration to determine whether the appraisal process was fair and, if not, whether any or both parties need to seek court intervention.

The factors that must be considered are whether or not the policyholder (homeowner) made an informed decision about signing the policy in which the appraisal clause is contained, whether the policyholder was provided an opportunity to consult with an attorney, whether the clause is being used oppressively or in bad faith by the insurance company, whether the parties were in fact entitled to select and appoint their own appraiser, whether the umpire was selected according to the appraisal clause, whether there was any bias on the part of any appraiser or the umpire about the controversy, and whether the appraisal process is trying to determine other issues not related to the loss such as causation, coverage, or liability, among other factors.

Considering the numerous factors that may come into play, the fairness and/or reasonableness of each appraisal process must be analyzed on a case-by-case basis by an insurance attorney.  The attorneys at the Amaro Law Firm have vast experience dealing with insurance companies and with the appraisal processes.  In fact, some of their attorneys worked as insurance companies defense lawyers before joining the firm.  Now, they help property owners fight for fair and just treatment.

We work on a contingency basis and are only paid if we win your case.  If you are dealing with the appraisal process and would like a free consultation, please contact us today.