An Overview of the Appraisal Process in Florida

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By Ricky K. Patel, Esq.

Are you thinking of suing your insurance company because it won’t agree to pay what your adjuster or contractor says is needed to fix your hurricane-damaged roof? Don’t be surprised if your insurer sends your dispute to an alternative resolution process called appraisal. Appraisal is designed to be a simple and inexpensive way of determining how much an insurer owes you for a specific loss.

Appraisal has long been used as a tool to resolve disputes concerning the amount of an insured loss. An “appraisal,” as defined in a homeowner’s insurance clause, is different from the common use of the term in everyday language. It is not the same as a real estate appraisal used for valuing a home, nor is it equivalent to an estimated value for an item, such as a car.  It is a tool used for determining the value of a home repair dispute that arises from a covered insurance loss. Once the panel comes to an agreement they will sign a binding appraisal award. The insurer will pay that amount to the policyholder.

The language of the appraisal clause can vary from carrier to carrier. Some policies can require appraisal to be invoked within a certain period of time, so it is important to carefully review your policy any time a party demands a loss be submitted to appraisal.

Here’s an example of an appraisal clause found in a typical policy:

“If you and we disagree on the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request the selection be made by a judge of a court having jurisdiction. The appraisers will state separately the amount of loss. If they fail to agree, they will submit their differences to an umpire. A decision agreed to by any two is binding”

How does the Appraisal Process Work? If a policyholder and insurance company can’t agree on the value of the loss, either can demand that the damages be determined by appraisal.

Here is how the process works:

  1. Both the policyholder and the insurer will hire an independent appraiser.
  2. Together, the two appraisers will choose an umpire. The umpire will resolve any disagreements that arise between the appraisers. The two independent appraisers and the umpire comprise the appraisal panel.
  3. The two appraisers will then examine the documents and estimations and try to reach an agreement on how much the repair or replacement should cost.
  4. If the appraisers can’t agree on specific items then they will submit their differences to the umpire.

Ricky K. Patel, Esq., Partner at Farrell, Patel, Jomarron & Lopez writes: 

“In the past, appraisal was only invoked if the carrier and insured agreed on the existence and scope of covered damage, but disagreed on the actual cost. More recently, the sope of appraisal has broadened, and it is being used to resolve claim disputes that go beyond mere disagreements about the value of covered damage. It’s important to understand that coverage is not the same thing as causation. While the courts in Florida have clearly established that coverage is a judicial question, causation is an appropriate question for the appraisal process. For example, let’s say that a policyholder seeks replacement of a 30-year-old roof due to covered hail damage and the insurance company partially denies the claim and argues much of the roof has deteriorated due to wear and tear. Whether or not the roof is covered under the insurance policy is a coverage question for the court. Whether or not the roof damage was caused by dry rot or windstorm damage is a causation question that is appropriate for appraisal”

Reach Out to Us Today for Assistance

It’s important that you understand the terms of your homeowner’s insurance policy so that you know your rights and obligations under Florida law, including the appraisal process. If you feel that the insurance company is paying you too little for your damages or has invoked appraisal in your insurance claim, contact one of the attorneys at Farrell, Patel, Jomarron & Lopez! We provide representation to clients facing a wide range of insurance claim issues.