When reviewing an insurance policy, you might come across an appraisal clause that usually states that appraisal is mandatory when properly demanded by the insurance company or the insured after property damage. Appraisal is not arbitration, instead it is a method for determining the amount the insurance company should provide for loss to your property. After appraisal is demanded, each side must choose an independent appraiser.
In State Farm v. Joseph Valenti [1], the insured hired a public adjuster after his house sustained damages due to water damage. The public adjuster and the insured signed an agreement where the public adjuster would receive 20% of any payment the insurance company made for the loss. After the insured retained the public adjuster, the public adjuster contacted the insurance company, attended the inspection, and sent correspondence to the insurance company. Ultimately, the insurance company demanded appraisal. The insurance company’s policy stated that each party had to select a qualified, disinterested appraiser.
After the demand for appraisal, the public adjuster named himself as the insured’s appraiser, which the insurance company objected to. The court concluded in this case that a public adjuster cannot be a disinterested appraiser when a contract exists between the public adjuster and the insured entitling the public adjuster to a portion of the recovery.
If an insurance company demands appraisal, make sure to read the clause in your insurance policy regarding who can act as an appraiser. If the appraiser must be independent or disinterested, an insured may not ask their public adjuster to act as an appraiser. Instead the insured must ask an individual that is qualified and has no interest in the outcome of the insurance case.
If you would like to discuss demanding appraisal or your post loss obligations, schedule a consultation with the experienced attorneys at Alvarez Law Group today. Call us at (786) 620-2820 or email assistant@alvarez.legal to schedule a consultation.
*Disclaimer: this blog post is not intended to be legal advice. *
[1] State Farm Florida Ins. Co. v. Joseph Valenti, Jr., No. 4D19-205 (Fla. 4th DCA December 11, 2019)
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