Insurance Claims: You Must Spend Money to Collect Money

March 31, 2009

Insurance claims are getting more and more complicated. Insurance companies are on a mission to increase their profits. That may mean that your insurance company will deny claims, delay claims and defend claims to beef up their bottom line.

The fabled management consulting firm of McKinsey and Company was retained a short time ago by three of the largest Property/Casualty companies in the world. That would be Allstate, Liberty Mutual and State Farm. McKinsey’s mission…as always…is to show companies how to earn more profits. Their final report recommended “The Three Ds”…defend claims, deny claims and delay claims.

All three companies have used this strategy aggressively to boost profits for their shareholders. Concurrently, all three have experienced higher than ever complaints of claims handling. Other companies have noticed the higher profits, and will likely follow suit.

I’m leading with that part of the story to show you that the claims experience you may look forward to…or have had…or are experiencing right now…is not a mistake, or an isolated incident.

So, what can you do when you have a claim?

First: understand that you cannot just trust the insurance company to take care of your claim for you. They are protecting THEIR money. The moment you file a claim, you become their adversary. If you allow the insurance company to handle your claim for you, you are a fool. They will cut corners and pay the absolute LOWEST amount possible to get you to sign a Full Release and close the claim. You will leave hundreds or even thousands of dollars on the table that you could have collected.

Second: just because you have a deductible on your insurance policy doesn’t mean that the deductible amount is all you’re going to have to spend. You need to realize that you might have to spend some extra money to collect the money you’re entitled to collect.

Like what?

– $50-$200 to have your attorney review ALL the documents the insurance company asks you to sign.

– $50-$200 to get an independent appraisal of your car if it’s been damaged.

– $50-$200 to get an independent restoration contractor’s estimate of your real estate property if it has been damaged. Many restoration contractors will do an estimate for free, but be prepared to pay for it.

– $50-$200 to have your attorney supervise your recorded statement with the adjuster.

– $50-$200 for an Independent Medical Examination if you are injured in an accident that was not your fault.

These are just a few of the claims expenses you should EXPECT to pay on your own behalf. Your policy states that it is YOUR RESPONSIBILITY to prove your claim.

But cheer up!! Spending a small amount of money to prove your claim will usually result in you collecting hundreds or even thousands more dollars in your claim settlement.


America’s Health Insurers: Bullies Meet a Bigger Bully

March 25, 2009

Think about the depression that we’re entering in America. Millions of people are losing their jobs, and thousands of companies are either laying off workers, closing their doors or dropping employee benefits. Many of those now-unemployed people are also losing their health insurance. There are presently about 48 million uninsured people in the US. This gives Congress the political cover to do what they’ve wanted to do since the Clintons were in the White House…nationalize health care.

I just read an Associated Press report about the health insurance industry. The insurance companies are terrified of the future, which looks like it’s going to include some kind of Federal takeover of health insurance.

America’s Health Insurance Plans and the Blue Cross/Blue Shield Association (BCBS), two giant health industry interest groups, issued a letter to key senators on March 24th. In the letter, they stated that their member insurance companies were willing for the first time to curb the controversial practice of charging higher premiums to people with a history of medical problems.

Although the proposal left open certain loopholes, it’s a pretty big change of the old policy of “risk rating.” In today’s insurance market, insurers charge higher premiums to people with previous medical problems and who are trying to purchase individual coverage. If such a person even gets an offer of coverage from an insurer, many times they cannot afford the premium. However, in group coverage through employers, past medical history is not usually considered.

Last year, the insurance companies offered to forego the practice of denying coverage to sick people.

The conciliatory offers did not extend to small businesses, though. Small businesses with even one sick worker can see their premiums jump up significantly year to year.

It’s somewhat comical to see what the insurance companies will do to save their own skin. For decades, they have been sticking it to individuals on health insurance premiums. But now that it looks like Washington is going to set up national health care that will either be in direct competition with them, or might just put them out of business, they have had a “come to Jesus” experience.

Please don’t misunderstand the tenor of this article. I believe that the free market should dictate health care policy, not government. I believe that nationalizing health care is an unconstitutional usurpation of power. I’m just amused to observe that the bullies in the health insurance industry have met a bigger bully, and instead of fighting, they’re cowering.

If the insurance companies wanted to play hardball with Washington, they could win. All they would have to do is to begin systematically selling off their government securities, such as Treasury Bills and other Federal debt instruments. A small sell-off would shake the very foundations of the Federal Government and threaten to crash the entire financial system.

That would put Congress and the President on the defensive, and stop health care nationalization.

Now, I’d like to offer you two special reports at no cost. One is “5 Things To Do When Shopping For Car Insurance,” and the other is “5 Things To Avoid When Shopping For Car Insurance.” Each one is a $9.95 value, but free to you when you sign up for my newsletter at the website address below.

P.S. WARNING!! Do Not Buy Insurance, or Submit an
Insurance Claim Without Visiting This Website!

check out:

My Book is NUMBER ONE at in its category! Buy it Today!

Nominated for Georgia Author of the Year Award 2008

Finalist, USA Book News “Best Book Awards 2008”

Insurance Appraisers: Property Appraisals and Estimates

March 23, 2009

In this article, we’re going to look at how the value of a property claim is determined. This could relate to your real estate property or your personal property, such as your automobile or the contents of your home.

Before we go any further…remember this statement:


Many times, you’ll hear an adjuster recommend that you get three estimates. That’s just not necessary, and wastes your time and money. That procedure had everything to do with price, but has almost nothing to do with quality and value. Your home or your property is not a commodity…a mere rubber stamp of every other piece of property. It should not be treated like a commodity. Don’t let an adjuster get away with this.

Here’s another statement to remember:


Automobile Damage Appraisals

If your loss is an automobile loss, and your vehicle is damaged, YOU seize the initiative and take your vehicle to the body shop of YOUR CHOICE. It would be best to have your vehicle inspected by the insurance company appraiser and your chosen body shop appraiser at the same time. That way, they can agree on the scope of damages before they start calculating the repair costs.

Read your policy. Some insurance companies actually specify in their policy that you must take your vehicle for repairs to the insurance companies “Approved Vendor.” But most policies do not. However, most insurance companies will try hard to direct you to their “Approved Body Shop Vendor.”

Just remember this. Is the “Approved Vendor” on your side or on the insurance company’s side? Did that body shop make a special deal with you to repair your vehicle? NO! So, just who do you think that “Approved Vendor” is going to be loyal to?

The insurance companies make deals with body shops so the repairs will get done at a reduced price. That usually means cutting corners on quality and using inferior aftermarket parts. You do understand that a car can look great from the outside after repairs, and not be the same car you had before the accident?

In Chapter 23 of my book, “Insurance Claim Secrets Revealed!”, I talk about my experience recently in an auto accident. One of the things I write about is insisting that your body shop appraiser write an estimate using Original Equipment Manufacturer (OEM) parts instead of aftermarket parts. Don’t give in on this point, or you’ll be compromising your safety in that vehicle after it’s repaired.

Once you have an OEM estimate from your chosen body shop, you’ll compare it with the insurance company appraiser’s estimate. You’ll likely find that your estimate is higher in price than the insurer’s estimate. Negotiate from YOUR ESTIMATE, not the insurer’s estimate. Once you’ve gotten agreement on the scope of damages and the amount of repairs, you’re ready to settle that part of the loss.

Don’t sign off on the release until the repairs are completed and you have done and extensive test drive and inspection of the repairs. Once you’re satisfied, then you can consider signing off. Have your attorney review the form before you sign it.

Homeowners and Renters Appraisals

In a homeowners insurance loss, in which the dwelling itself is damaged, the claims adjuster will inspect the dwelling for damage. He will photograph the damage and take measurements. He will make notes of all of the damaged items, and note the quality of the building materials. He will note the cause of the damage, if it can be readily determined. All of that information is commonly referred to as the “Scope of Damages.”

You must get a restoration contractor of your own to inspect the damages and write an estimate. Don’t just accept the estimate of the claims adjuster.

It would be a good idea to have your contractor meet you and the adjuster at your home at the time of the inspection. That way, you can all look over the damage, and you, the adjuster and the contractor can agree on the scope.

There should be an agreement between you, the policyholder, the contractor, and the adjuster on the scope of damages. Likely, you won’t have a chance to accept the adjuster’s scope until he takes the information from his inspection back to the office and enters that information into his estimating software in his computer. Most adjusters will be able to print a copy of the scope and send it to you. You should insist on a written scope of damages from the adjuster.
Don’t sign anything without having your attorney review it FIRST.

Adjusters are human and sometimes miss damages. So do contractors. That’s why there should be an agreement on the scope of damages…before you ever begin discussing the cost of repairs.

Think about it another way. Let’s say you are going to build a new house. Your architect would have to make drawings and specifications of all of the materials that were going to be used to build that house. When it comes time to get bids from contractors, everyone bidding has the same information upon which to base their bid.

It’s no different when you’re getting bids and estimates in an insurance claim.

Once you have the scope of damages, you can then expect to receive the estimate from your contractor and the adjuster. The best way to handle this is to insist that the contractor and adjuster reach an agreement on the amount of the estimate. Once that’s done, the adjuster can report to the insurance company and have them pay the claim.


Get a copy of a JC Penney catalog. Even get two…one Fall/Winter, one Spring/Summer. Get your hands on as many other catalogs as you can find. As you look at the pages of the catalogs, you’ll remember the things that you had in your home. You will find hundreds or thousands of dollars in personal property that you likely would not have remembered owning. Not only will you remember dozens and dozens of items, but you’ll have a retail price from a reputable retailer right at your fingertips.

Please don’t misunderstand what I’m telling you to do here. I’m NOT telling you to write down items on your inventory list that you did not own. That’s fraud, and you can go to jail for fraud. I’m simply showing you a way to remind yourself of things long ago purchased, and possibly stored and forgotten. For example, how many parents bought a vaporizer to run in their children’s rooms at night when the young children were sick? That vaporizer might not have been used in years, but you owned it, and you have a right to collect for it under the terms of your policy.

When you have completed the Contents Inventory Worksheets, make copies and submit the copies to the claims adjuster.

In closing, remember this. All insurance claims adjusters and appraisers use estimating software these days. This software is a vast database of materials and labor for any kind of property. But many companies make a deal with the software designers to write software that undervalues the repair costs for the property. Consequently, when the appraiser uses that software, estimates for repair are consistently lower than the actual costs. That’s why you need your own estimates.

Take control of your insurance claims! Add hundreds or even thousands more dollars to your claim settlements!

Retirement Investments: Get Out Now, Get Into Cash, Gold and Silver

March 18, 2009

The US Federal Government is in its death throes. It is thrashing around, writhing on the floor, like a person suffering a grand mal seizure.

The Obama Administration, The Federal Reserve and Congress are completely clueless on the methods necessary to bring America back from the financial precipice. Would you like some examples?

1. Easy money and easy credit spawned a consumer society, rather than a saver society. America has gone from a producing nation to a consuming nation and the world’s largest debtor. Personal debt is at an all-time high.

2. The Federal Government is convinced that more easy money and easy credit will revive our economy. They want the reinflate the bubble that America has been living in for the last 20 years. So, Congress and the President authorized over a trillion dollars of paper money to be manufactured and given to the financial institutions that were accessories to the bankruptcy of America.

3. The Congress rushed through spending bills that ran hundreds of pages long, with “earmarks” added by legislators as extortion for their votes. There was no time for these bills to be read by legislators. They passed the legislation and the President signed it into law.

4. The “banksters” and AIG did take the time to read the law once they got the money. They found out that the law didn’t give them many restrictions on how they spent it. So, there are stories in the media about the billions of dollars that have gone un-accounted for. Merrill Lynch paid big bonuses to their employees only days before a bailout. AIG paid over $165 million in bonuses to the very executives in their company responsible for its demise. So now, the Congressional roosters are crowing about how they are going to punish AIG. I predict that we will find out that AIG did not violate any law in paying bonuses.

5. The Federal budget also includes Social Security, Medicare and Medicaid, a monster military budget and normal operating expenses. Then, there is the part of the budget that is “off budget.” (Congress never wants you to know how much money they REALLY spend). Most of the Federal tax income goes to pay interest on the national debt. The big entitlement programs have automatic cost-of-living increases.

So, a big reality adjustment is about to occur over the next few months and 1-2 years. Everyone from toddlers up to octogenarians knows that one cannot continue to spend more than one takes in. That is, everyone except politicians.

The inevitable collapse is going to occur. Here are several ways that it will manifest itself very soon.

1. Massive inflation is just around the corner. In the annals of human history, inflation has NEVER failed to follow government corruption of money. Washington has tripled the money supply with no underlying value. Inflation MUST follow as night follows day. Zimbabwe’s staggering inflation is a real time example. America is just not that far down the same road, but is doing the same things that has destroyed Zimbabwe.

2. Pensions will begin to implode and many will fail. The Pension Benefit Guarantee Corporation will fail as it has never been adequately funded by Congress. Tax-deferred accounts will be seized by Washington and “guaranteed.” But they will use the money to fund rollovers of Treasury debt. If you are receiving a pension now, you won’t be soon. If you think you will receive one in the future, think again.

3. Annuities. Insurance companies sell annuities, which are essentially savings accounts held by insurers. Many insurance companies will fail, and the annuities will be toast. Get out of your annuities, take your penalties, pay your taxes…just get what you can before there is nothing to get.

4. The FDIC will soon be unable to make good on bank failure obligations. They will try to raise insurance rates on remaining banks (what they are doing now) but the remaining banks will revolt. Congress will back up the FDIC, but with more fiat money created from nothing.

5. Tax receipts are imploding, caused by business failures and rising unemployment, and will continue to implode. Eventually, real spending cuts will have to occur in the Federal bureaucracy, which will mean thousands of layoffs of government workers. Even with the stimulus packages recently enacted by the Obama Administration, there will be an end to stimulus packages…especially when it is proven that they don’t work. When federal stimulus ends, the inflated economy will deflate.

6. Despite the Washington stimulus packages, banks are not going to lend to companies teetering on the brink of collapse. Like the Big Three automakers. I predict that a large percentage of publicly held corporations will fail over the next 24-36 months.

7. With industrial collapse will come the Federal takeover of the health care liabilities of the failed companies. Congress will finally have the political cover necessary to nationalize health care in the USA.

8. The Labor Department, irrespective of what President is in the White House, cooks the unemployment numbers each month. U-3, the official unemployment rate, will reach 15% nationwide. But U-3 does not count unemployed people who have stopped looking for work. U-6, the real unemployment rate, will reach 30% within the next 18 months. State governments will be unable to fund skyrocketing unemployment benefits. Which will lead to…

9. Civil unrest. That’s a nice term for burglaries, robberies and looting. The National Guard and the military will be called upon to try to stop it, but it will be too widespread. There aren’t enough Guard in America now, because thousands are in Iraq and Afghanistan. Even if all the military troops in uniform in all the branches were on American soil, there wouldn’t be enough to quell the coming crime wave. Just remember New Orleans 24 hours after Hurricane Katrina. It became a looter’s paradise. That same dynamic will happen in most cities, and will spread out into the suburbs as time passes.

10. What the Federal Government will experience shall be replicated in each state as they go through cuts in tax revenue. Look at what California is going through right now.

Consider the words of Communism’s father, Karl Marx, written in 1867: “Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism.” See? This stuff isn’t so hard to forecast, not if a dim bulb like Marx could do it over 140 years ago.

What can you do now to prepare for the apocalyptic future that looms before us?

1. Get all of your assets…401K, IRA, savings, stock holdings, etc…into cash. Right now, you should be 100% concerned with wealth preservation. Forget interest…forget return on investment…forget dollar cost averaging. Take the penalties, pay the taxes, take your losses. Get out of investments and into cash.

2. Buy significant amounts of gold and silver coins. Do not buy collector coins, because you would be counting on some intrinsic collector value as some portion of the coin’s value. Buy gold and silver coins. At this time, I favor silver because of its availability, as well as its favorable pricing against gold. Do not buy gold and silver stocks. Take physical possession of the precious metals you buy.

3. Buy a safe and put your coins and cash in the safe.

4. Buy firearms and ammunition, and learn how to use them.

I believe that the outlook is really that bleak. The folks in Washington have committed horrible crimes against the Constitution, as well as fraud in the way they spend tax money. That small little group of a few thousand bureaucrats and elected officials is going to bring down the greatest nation in the history of the world.

Disclaimer: I am voicing my own opinion. I am not an investment advisor or attorney. Use this article as a primer for you to begin your own research. Before you take any action recommended in this column, consult your investment advisor and/or attorney. I accept no responsibility or liability for your personal decisions.

Jon Stewart’s Daily Show: Stewart Eviscerates Jim Cramer Live

March 14, 2009

Jim Cramer, a CNBC commentator and host of the show “Mad Money,” appeared as a guest on “The Daily Show with Jon Stewart” Thursday, March 12, 2009. This appearance capped a two-week feud between Stewart and CNBC, in which Stewart showed video clip after video clip of the inept financial reporting done by that network.

Cramer was the focus of many of those video clips, and made a lot of comments in the press in his own defense. However, his comments only threw gasoline on a small fire.

“I understand that you want to make finance entertaining, but it’s not a (expletive) game,” Stewart told Cramer during the beat-down session on Thursday.

When Cramer claimed that the big CEOs lied to him, Stewart ran video clips to show that Cramer was no fool, proving that he knew all the back-office shenanigans of Wall Street.

In one particularly damning pair of videos from 2006, Cramer is seen discussing ways that stocks values can be manipulated. He specifically mentions Apple Computers, and how talking about the delays with the release of the Iphone affected stock prices.

I have a few thoughts and comments about Thursday night’s show, as follows:

1. What was CNBC thinking when they allowed Cramer to go into the enemy’s camp and appear on The Daily Show? What possible upside could there have been? Did they think that Cramer would defend himself and emerge the victor? If CNBC would have ignored Stewart’s criticisms, the furor would have died out in two weeks…tops. In my opinion, this appearance, sanctioned by CNBC, shows that they are either breathtakingly stupid or breathtakingly arrogant. I guess you can be both at the same time, and that might be the answer.

2. At one point, Stewart asked Cramer why CNBC aired these financial entertainment programs with their gung-ho stock-buying emphasis. Cramer’s response was shocking when he said: “There is a market for that, and we give it to them.” Stewart’s rejoinder was, “There’s a market for hookers and cocaine, too,” implying that CNBC has the same motive as pimps and drug dealers. But think about the corporate mindset at CNBC that sees human frailty and openly exploits it. Stewart was right. What difference is there between one entity and another that exploits human frailty?

3. OK, John. Taking on Jim Cramer was easy. You’d been building your case with devastating videos for the last two weeks, hammering the guy with his own words. Now, how about doing the same thing for members of Congress? They are the ultimate felons and traitors in this American financial meltdown. It is Congress that enacted the laws that allowed the financial debacle that is unfolding before our eyes.

These are the paragons of virtue that promoted the “every man should own a house” ruse, prevented the reigning-in of the Federal Reserve, FreddieMac and FannieMae, and essentially let the inmates run the asylum. Then, to forever burnish their reputation and the stupidest lawmaking body in human history, they handed hundreds of billions of dollars to the very “banksters” that helped create this mess, and did not require them to account for the money.

In conclusion: there are a lot of folks who should go to jail over this national depression. I doubt if I will witness even one behind bars. Bernie Madoff doesn’t count.

Petty Annoyances: Random Things That Annoy Me, Part 2

March 8, 2009

Here are some more Petty Annoyances that tighten my colon.

Loud TV Commercials – ever notice that when TV commercials come on, the volume coming from the broadcaster is way louder than the program you were watching? I hate to have the TV shouting at me, so I usually just hit the “mute” button as soon as a commercial comes on.

Car Insurance TV Ads – ever notice that most car insurance ads say that drivers who switch to their company save between $350 and $500 a year? The full coverage insurance on my Mercedes is only $741 per year. I haven’t found a company yet that will sell me car insurance for half price. Somebody is lying about average savings.

Traffic Cameras at intersections – the city says that the cameras were placed there to make the intersection safer. But the real reason is that the city makes so much money in traffic fines when the camera gives the tickets. I got one of their tickets about three years ago. They sent it to me in the mail. It said that I could just pay the fine of $80 and no points would go on my record. They also said that if I fought the ticket in court and lost, I’d have court costs, the fine and two points on my record. I paid the fine and felt the gun in my ribs as I wrote the check.

Gambling in Georgia – The Georgia State Legislature is debating a new law that would allow casino gambling in Georgia. The hypocrisy of those in opposition is that Georgia has had a lottery and a daily numbers game for over 15 years. Casinos in Georgia would be a great addition to our state.

Computer Hackers – Two weeks ago Friday evening, my wife opened a website that downloaded a virus into her computer. This thing was so bad that it kept popping up every time you moved the mouse, and would not let us remove it. I finally had to spend $40 on a program that would extract this thing from her computer. It cost me two days of effort to get rid of this thing. There was no reason for the virus. They weren’t trying to sell me anything. They just wanted to screw up our computer. There is a special deep level of hell for these people…shared with those who talk out loud in a theater.

Drivers in a Hurry – I can’t tell you the number of times I’ve been at a stoplight when some driver behind me honks his horn when the light turns green, swerves left to pass, flips me the bird as he goes by, and flies ahead. Then, at the next traffic light…there he is, waiting for the green when I pull up behind his sorry ass.

People who mispronounce the word “ask” – They say “axe.” I’ve heard seemingly intelligent, well dressed people in offices do this. I’m not ever surprised when I hear it from uneducated low class people. But when I hear it, I always dismiss the speaker as a dolt, no matter how nicely that person is dressed.

Cats who tenderize you before they lie down on you – Does your cat use his front paws and claws to push on you, back and forth, before lying down? What the hell is that about?

My Garbage Man – The trash company tells me to make sure my trash cans are at the curb before 6:00 Monday morning. But they never pick up before noon.

Little Guys in the Bar – Short men seem to have attitude in bars. The thing that jerks my chain most is when I’m with friends…one of whom is short…and he shoots off his mouth and expects me…the biggest guy…to jump in and save is ass.

Sorry, friend. I was just sitting here minding my own business…

Insurance Appraisal Clause: Resolving an Impasse in Your Claim

March 7, 2009

What if, after all you’ve done, you and your adjuster/insurance
company are at an impasse on the value of your property? It’s now
time to invoke the Appraisal Clause in your insurance policy. The Appraisal Clause is found in all insurance policies, and was designed to establish a procedure to allow disputed amounts to be resolved by disinterested parties. The appraisal clause can be found in every homeowners policy, in every policy covering commercial buildings, in all business policies, as well as in every renters policy…even automobile policies.

The Appraisal Clause is usually found in the policy under the Heading “Conditions”
and/or “What to do after a loss.”

Don’t confuse the Appraisal process with Arbitration. The Appraisal Clause does not bind either party to its findings. In arbitration, the findings of the arbitrator are usually binding on both parties.

The Appraisal Clause is meant to be the method for determining
disputed values. Appraisal cannot be used to determine what is
covered. That is for a court of law to decide. If you have dispute with
the company on whether or not something is covered, then you must
file a lawsuit against your insurer to get that determination.

to wait until you’re hopelessly deadlocked with the adjuster or insurance company to invoke the Appraisal Clause. The Appraisal procedure has been invoked more often by insurers, who have greater understanding of the terms and conditions of their policies. But
you, the insured or policyholder, can do it any time.

I’m not suggesting that you become uncooperative. But occasionally, I
talk to people who are having real difficulties with their adjuster or
insurance company. Taking the claim to Appraisal sometimes stops
all the drama.

In my experience as both an appraiser and an umpire, I’ve found that disputes can be resolved more quickly by appraisal than the resolution you might get with litigation. The cost of the appraisal process is also significantly lower that the cost of litigation.

Here’s what the Appraisal Clause reads in my Homeowner
Insurance policy:

“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 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 “residence premises” is located. The appraisers will
separately set the amount of loss. If the appraisers submit 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.

Each party will:
a. pay its own appraiser, and
b. Bear the other expenses of the appraisal and umpire equally.”

Each party appoints an independent, disinterested appraiser. In past experience, I’ve seen the insured or policyholder try to appoint his own Public Adjuster as the appraiser. This should never be done, as the PA is not a disinterested party.

The appraisers evaluate the loss independently. The appraisers can still negotiate and reach an agreed amount of the damages. But, if they cannot agree, they work together to choose a mutually acceptable umpire. If the two appraisers cannot agree on the selection of an umpire, either side may appeal to the local court for the appointment of someone to serve in that capacity.

An umpire must also be a disinterested party, and must be impartial, of good moral character and possessing a good reputation. He also must be willing to listen. No umpire should be chosen that has any financial interest in the outcome of the appraisal. Any other consideration other than the hourly rate of compensation for the umpire is not acceptable.

Once the umpire has been chosen, the appraisers each present their loss assessment. Often, this involves informal testimony from the parties involved in the claim. To help the umpire gain a more complete understanding of the details of the loss, the appraisers and the umpire sometimes meet at the loss location and review the loss details. The umpire will subsequently provide a written decision to both parties. If any two parties agree to the amount of the loss, that amount becomes the claim amount. However, if one of the parties does not agree, then the case can still be turned over to legal counsel for litigation.

Question: May the insured or insurer reject the other parties’ choice of appraiser?

Answer: In 2005, the New York Department of Insurance issued a ruling on this question as follows:

“Whether an appraiser appointed by either of the parties is competent and disinterested (or “independent”) is a question of fact for a jury and is outside the determination of this Department.”

ANOTHER TIP!! Notice that there are very specific time limits in the Clause. You MAKE SURE that you choose your appraiser and notify the adjuster within the time limit in your policy. The time limit for both appraisers to choose an umpire begins on the day that both sides choose their appraiser.

Watch very carefully to see if the insurance company and/or
adjuster chooses their appraiser within that time limit. If they do not,
they have violated the terms and conditions of their policy.

My recommendation, in the event of an appraisal, is to call a Claims Consultant. You might also consider contacting a public adjusting company in your area. The Claims Consultant or PA know insurance policies, know the Appraisal Clause, and know property values. The Claims Consultant or PA are the perfect choices for helping you prove the values of the property of your claim.