It seems that some new property insurance policy forms may require additional criteria for determining the qualifications of appraisers and umpires. Here are some details from State Farm’s new California property insurance policy:
f. To qualify as an appraiser or umpire for a loss to property described in COVERAGE A – DWELLING, a person must be one of the following and be licensed or certified as required by the applicable jurisdiction:
(1) an engineer or architect with experience and training in building construction, repair, estimating, or investigation of the type of property damage in dispute;
(2) an adjuster, public adjuster, or attorney with experience and training in estimating the type of property damage in dispute; or
(3) a contractor with experience and training in the construction, repair, and estimating of the type of property damage in dispute.
g. A person may not serve as an appraiser or umpire if that person, any employee of that person, that person’s employer, or any employee of their employer:
(1) has performed services for either party with respect to the claim at issue in the appraisal; or
(2) has a financial interest in the outcome of the claim at issue in the appraisal.
However, these relatively new forms might not be applicable in states that have adopted the standard fire insurance policy:
As set forth in the opinion, the district court simply compared the appraisal provision in the Michigan Standard Fire Policy with the specific appraisal provision in State Farm Form HW-2122. That comparison revealed that the State Farm appraisal provisions at issue-imposed conditions, requirements, and demands not set forth in the Michigan Standard Fire Policy’s appraisal provision. The district court concluded that the State Farm appraisal provisions made the appraisal process far more burdensome than the Michigan Legislature intended. As such, they were contrary to MCL 500.2833(1)(m) and void as against public policy.
The State Farm policy form has the following criteria for appraisers and umpires:
d. To qualify as an appraiser or umpire for a loss to property described in COVERAGE A – DWELLING, a person must be one of the following and be licensed or certified as required by the applicable jurisdiction:
(1) an engineer or architect with experience and training in building construction, repair, estimating, or investigation of the type of property damage in dispute;
(2) an adjuster or public adjuster with experience and training in estimating the type of property damage in dispute; or
(3) a contractor with experience and training in the construction, repair, and estimating of the type of property damage in dispute.
e. A person may not serve as an appraiser or umpire if that person, any employee of that person, that person’s employer, or any employee of their employer has:
(1) a familial relationship within the third degree between the umpire or appraiser and a party or a representative of a party;
(2) previously represented a party in a professional capacity in the same claim or matter involving the same property;
(3) represented another person in a professional capacity on the same or a substantially related matter that includes the claim, the same property or an adjacent property, and the other person’s interests are materially adverse to the interests of a party;
(4) worked as an employer or employee of a party within the preceding 5 years; or
(5) a financial interest in the outcome of the claim at issue in the appraisal.
This should be a good reminder to read the fine print and read the entire policy because property insurance policies are not written the same, vary from state to state, and are always changing.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.