AN APPRAISAL PRIMERAN APPRAISAL PRIMER
What, When, Why and How?What, When, Why and How?
PAMIC Claims SummitPAMIC Claims Summit
Wyndham GettysburgWyndham Gettysburg
April 7, 2015April 7, 2015
PRESENTERSPRESENTERS
Michael H. Burgoyne, Esq.Michael H. Burgoyne, Esq.Thomas, Thomas & Hafer, LLPThomas, Thomas & Hafer, LLP
Baltimore, MarylandBaltimore, Maryland
Todd B. Narvol, Esq.Todd B. Narvol, Esq.Thomas, Thomas & Hafer, LLPThomas, Thomas & Hafer, LLP
Harrisburg, PennsylvaniaHarrisburg, Pennsylvania
James J. Kern, CPA, CVA, CFEJames J. Kern, CPA, CVA, CFEGross Mendelsohn & Associates, P.A.Gross Mendelsohn & Associates, P.A.
Baltimore, MarylandBaltimore, Maryland
Mark W. Reynolds, CPA, CFE, CFFMark W. Reynolds, CPA, CFE, CFFGross Mendelsohn & Associates, P.A.Gross Mendelsohn & Associates, P.A.
Baltimore, MarylandBaltimore, Maryland
LEARNING OBJECTIVESLEARNING OBJECTIVES
WhatWhat types of disputes can be appraised types of disputes can be appraised
WhenWhen during the claims process during the claims process
WhyWhy demand appraisal – pros and cons demand appraisal – pros and cons
HowHow does the appraisal work, start to finish does the appraisal work, start to finish
WHATWHAT
Loss Measurement Disputes - YES Loss Measurement Disputes - YES
Coverage Disputes – NOCoverage Disputes – NO
Liability Disputes – NOLiability Disputes – NO
Overview of appraisal process:Overview of appraisal process: Insurance policy provisionsInsurance policy provisions Written demand for appraisalWritten demand for appraisal Selecting appraisersSelecting appraisers Selecting an umpireSelecting an umpire Appraisers assess value of lossAppraisers assess value of loss Umpire evaluates appraisers’ assessments of value, considers evidenceUmpire evaluates appraisers’ assessments of value, considers evidence Amount of loss determined based upon agreement of two out of the threeAmount of loss determined based upon agreement of two out of the three
POLICY PROVISIONSPOLICY PROVISIONS
Written Demand Written Demand
Selecting AppraisersSelecting Appraisers
Appraisers Select UmpireAppraisers Select Umpire
Appraisers Value the LossAppraisers Value the Loss
Umpire Evaluates Value of LossUmpire Evaluates Value of Loss
Agreement by Any Two is BindingAgreement by Any Two is Binding
POLICY PROVISIONSPOLICY PROVISIONS
Each Party Pays Its AppraiserEach Party Pays Its Appraiser
Umpire Cost Shared EquallyUmpire Cost Shared Equally
Insurer Retains Right to Deny Insurer Retains Right to Deny ClaimClaim
PROS & CONS PROS & CONS
PROSPROS
Less Expensive Less Expensive
Take Far Less TimeTake Far Less Time
Informal Process Informal Process
Each Party Shares in Cost Each Party Shares in Cost
PROS & CONSPROS & CONS
CONSCONS
Award is Binding – Must Live with ResultAward is Binding – Must Live with Result
Does Not Resolve All DisputesDoes Not Resolve All Disputes
Umpire May Split the DifferenceUmpire May Split the Difference
TIMING OF APPRAISAL TIMING OF APPRAISAL
Generally, After:Generally, After:
Coverage AcknowledgedCoverage Acknowledged
Documents Obtained Documents Obtained
Settlement Attempts FailedSettlement Attempts Failed
WAIVER OF APPRAISAL WAIVER OF APPRAISAL RIGHTSRIGHTS
If Not Demanded Timely If Not Demanded Timely
Appraiser Not Selected TimelyAppraiser Not Selected Timely
Filing Suit Prior to Appraisal Filing Suit Prior to Appraisal DemandDemand
Insurance Company Denies Insurance Company Denies LiabilityLiability
SELECTING APPRAISERS & UMPIRESSELECTING APPRAISERS & UMPIRES
Competent and ImpartialCompetent and Impartial
Knowledge and ExperienceKnowledge and Experience
Communication skillsCommunication skills
Decision makerDecision maker
SELECTING APPRAISERS & SELECTING APPRAISERS & UMPIRESUMPIRES
ReputationReputation Prior AppraisalPrior Appraisal BiasBias Sound JudgmentSound Judgment
Do Your HomeworkDo Your Homework
MEMORANDUM OF APPRAISALMEMORANDUM OF APPRAISAL
Specify Disputes Specify Disputes Measure of Value (RCV, Measure of Value (RCV,
ACV)ACV)
Selection of AppraiserSelection of Appraiser
Appraisers’ Selection of Appraisers’ Selection of UmpireUmpire
Responsibility for FeesResponsibility for Fees
Signature of PartiesSignature of Parties
EDUCATION OF THE UMPIRE BY EDUCATION OF THE UMPIRE BY YOUR APPRAISERYOUR APPRAISER
Knowledge of the ProcessKnowledge of the Process
Policy ProvisionsPolicy Provisions
Valuation MeasurementValuation Measurement
Role of the UmpireRole of the Umpire
Are there any potential problems if the Are there any potential problems if the appraisers do not select the umpire first?appraisers do not select the umpire first?
The insured’s Perspective:The insured’s Perspective:
Thoughts of Public Adjusters on Appraisal Thoughts of Public Adjusters on Appraisal of Business Income Claimsof Business Income Claims
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
Yes . . . I will try to snooker the Yes . . . I will try to snooker the Umpire.Umpire.
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
I can stretch the envelope, you can’t.I can stretch the envelope, you can’t.
Your evaluation was wrong and you admit Your evaluation was wrong and you admit it.it.
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
Keep in mind your goal is to impress your Keep in mind your goal is to impress your client, not the Umpire.client, not the Umpire.
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
OK . . . .Sometimes my client is OK . . . .Sometimes my client is unreasonable.unreasonable.
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
If the Umpire can’t figure it out, he splits If the Umpire can’t figure it out, he splits the difference . . . . so . . . . the difference . . . . so . . . .
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
Be disdainful to me . . . please.Be disdainful to me . . . please.
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
Unfair from day one! Unfair from day one!
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
Never ever re-evaluate your position.Never ever re-evaluate your position.
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
I also want to close my file . . . let’s I also want to close my file . . . let’s settle!settle!
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
We both know I’m the heavy favorite.We both know I’m the heavy favorite.
THOUGHTS OF PUBLIC ADJUSTERS ON THOUGHTS OF PUBLIC ADJUSTERS ON APPRAISAL OF BUSINESS INCOME CLAIMSAPPRAISAL OF BUSINESS INCOME CLAIMS
Top Related