What happens when there is a dispute about an
insurance claim amount? Very often one
party institutes litigation. This is an immediate signal that there will be
lawyers involved, years of time will elapse before resolution is reached and both parties
will be exposed to healthy legal expenses.
When settlement amounts are in dispute, the parties involved are frustrated
or the insured honestly does not understand the coverage limits that the paid
premiums provided. Harsh words may have been exchanged and the file remains
open, further aggravating the participants. This is the time for either party to
consider resolving the differences under the appraisal clause provision in
the policy. The "Insurance Appraisal Clause Process" found in all insurance
policies, was designed to establish a procedure to allow disputed amounts to be
resolved by disinterested parties.
"Appraisal Clause Process" is straightforward and binding. Lawyers are not
needed, and the time required is governed by the complexity of the loss.
Each party appoints an independent, competent appraiser. From that point
on, the principals are not involved in the dispute because each appraiser must
independently assess the loss. The appraisers resolve the issues. An
independent, competent umpire, pre-selected by the two appraisers, stands
ready to resolve any disputes between the two appraisers. To be effective, the umpire must also be impartial, willing to listen, ask questions
and to be of good moral stature and reputation. An umpire that has a vested or undisclosed interest or reward other than his hourly rate must be avoided at
all costs. Research the background of your potential umpire thoroughly.
The insurance appraisal clause process is not designed to accommodate lawyers. Legal fees are
not incurred and the time to reach a settlement is minimized.
Patrick King has served as appraiser and umpire in dozens of insurance
files and points out that disputes can be resolved relatively quickly, compared
to the time element in litigation and the formal structure of arbitration. King
states emphatically "Claim disputes can usually be settled by reasonable
parties for a reasonable cost, in a reasonable amount of time." The
clause process is binding but somewhat less formal that arbitration and definitely less
formal than litigation. We have successfully completed insurance diminished value/loss of value
dealing with art value, historical value, use value, research value, age value,
new value, sentimental value, monetary value, associative value, commemorative
value, educational value and rarity.
We have successfully brought to completion, a
cost-effective insurance appraisal clause process in
California, Florida, Indiana, Illinois, Michigan, North Carolina, South Carolina, Louisiana, Mississippi, Tennessee,
Texas and Wisconsin.
Author: Patrick B. King
Patrick B. King & Associates