Finding and Selecting Your Appraiser
When you prepare to select an appraiser for your property damage dispute with the insurance company, remember that the word “appraiser” can mean a number of things. Generally, we refer to an appraiser as a kindly gent peering through an eyepiece to judge the value of your diamond-studded ring.
If you browse through the yellow pages of your telephone directory you’ll be amazed at how many appraisers offer this type of service. However, you are not looking for a jewelry appraiser if you need someone competent in the field of property damage claims.
The appraisal process requires an individual with skill and knowledge in the construction field, the appraiser should not just evaluate damage but have a thorough knowledge of the complete construction/rebuilding process. The following are some basic concepts the appraiser should understand and have experience with to provide an accurate assessment of the situation and appraise accordingly:
- All facets of the construction trade
- Knowledge of engineering requirements
- Knowledge of material pricing
- Knowledge of material sources
- The labor and time elements related to repairs and reconstruction
- Specialty conditions and circumstances
The individual you choose as your appraiser will be required to represent you in the appraisal process through documentation and oral argument in front of the umpire assigned to hear the dispute.
Your appraiser must be:
- Articulate
- Persuasive (he or she will be conducting an argument on your behalf and in your best interest)
- Believable (he or she will have to convince the umpire that your position is right and the insurance company is wrong)
- A disinterested party (he or she should not have a financial connection to you, with the exception of the fee for his/her services. This also means that the appraisers cannot work for the company that will be doing the work on the damaged property or s in any way connected to the supplier of materials.)
If you have a problem finding a qualified property damage appraiser, you can hire an appraiser from the following fields for the purpose of representing you at the appraisal process:
- Attorneys (with knowledge of the construction trade)
- Architects
- Engineers
- A good restoration contractor who does not have a financial interest in the outcome of the appraisal.
- Remember again, any appraiser that you hire must not have a financial interest in the outcome of the appraisal process, with the exception of their normal fee for their services as an appraiser.
If you have a problem locating an appraiser, consider contracting a qualified restoration contractor, since they work with insurance companies on a daily basis. You may also, in addition to checking your local yellow pages, consider library sources, real estate brokers or mortgage offices. To determine a state approved appraiser, you can contact your state’s Office of the Insurance Commissioner for assistance.
One last thing to consider when interviewing your prospective choice for appraiser is that you ascertain their “track record” and experience in their dealings with insurance carriers. Ask if they have ever been part of an appraisal process with your insurance carrier. Also determine what their history ahs been as far as the position they have taken in the past; for example, have they worked on behalf of the insurance company or on behalf of the homeowner claimant?
Can I Sue For “Bad Faith?”
Your insurance company is said to have a fiduciary relationship with its customers. This means the protection of the policyholder’s property is held in trust by the insurance company, and therefore, the company owes the policyholder fair treatment. The insurance company is required to deal with you fairly and cannot take advantage of your lack of knowledge or deprive you of claim payments you are entitle to as an insured.
When an insurance company violates the fiduciary relationship with its customer and neglects to provide the protection called for by the policy, the company may be seen as acting in “bad faith.”
In order for bad faith to exist, there usually must be conscious wrongdoing on the part of the insurance company and not merely an honest mistake.
In order to determine if your claim warrants a bad faith action you usually have to meet a number of requirements. It should be noted that bad faith action are unique to their own circumstances and evidence, and the following list should not be an indication or suggestion that this is all you are required to prove in order to file a bad faith claim, or to be successful in the outcome. Items to consider include, but are not limited to:
- Determining coverage at the time of loss and were you covered by the applicable policy?
- Does your insurance contract subject the insured to damages over and above whatever may be due under the contract?
- Has the insurance company failed to perform its implied duties under the contract?
- Has the insurance company committed fraud, negligent misrepresentation, intentional infliction of emotional distress, etc.?
- Are punitive damages applicable?
- Has the insurance company withheld benefits, denied benefits due, paid less than due, or unreasonably delayed payment?
Because the insurance company’s officers, agents and representatives are not a party to the insurance contract, you usually cannot sue them individually. You are not suing your insurance company directly on the basis of the conduct or “unreasonable practices” of the company’s representatives.
The following conduct by an insurance company has been held admissible to show it acted “unreasonably”:
- Failure to investigate claim thoroughly
- Failure to evaluate claim objectively
- Unduly restrictive interpretation of claim form
- Using improper standards to deny claim
- Dilatory claims handling
- Deceptive practices to avoid payment of claim
- Abusive or coercive practices to avoid payment of claim
- Disregard for the insured’s rights
- Unreasonably low settlement offers
- Unreasonable litigation or litigation tactics to avoid payment of claim
In most jurisdictions, if you sign a release with the insurance company you may waive your rights to pursue an action of bad faith against your insurance company.
Please note that in order to undertake a lawsuit for bad faith; you should consult legal counsel because of the complexities and legal theories that are required to bring such an action.
Legal Counsel
The use of lawyers often is an economic decision. If you have followed the recommendations contained in this book, you will have laid the groundwork in an organized fashion for the lawyer to take over. This should provide you with a great deal of savings of both money and time.
Lawsuits are an action of last resort. You can win, or at least get the amount you think you’re owed, but it should take years, especially since insurers may certainly appeal any verdicts against them. It doesn’t make sense to file suit if you’re going to end up having a lawyer more than the amount t of your claim.
In some limited cases, there may be provision in your insurance policy allowing the prevailing party to recover their attorney fees.
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