Auto Insurance Claims/Auto Damages Tree on Property
I have a situation where I'm the homeowner, and a third party crashed their automobile into a tree on my property (there was a police report and no question as to the responsible party). There's also no question as to the degree of damage (i.e., total loss and needs to be replaced). The question is relative to the settlement value. I had a certified tree arborist appraise the damage (where the appraisal assumes standard arborist procedures to determine the value, which takes into account the value of the tree lost (i.e., original size, condition, etc.) not just the estimate to tear down and replace with a smaller tree. The insurance company had a third party review (ComSearch) and they returned a settlement value ~35% less than the appraisal, and used a different methodology which in part assumes installing a smaller sized tree. The appraiser told me they have to pay for the amount of the appraisal including the $200 appraisal fee I was charged (which was part of the total appraisal amount) according to Pennsylvania law, and that they are just playing games to settle for less. The appraiser also indicated that ComSearch was aware the appraisal was conservative in terms of the amount. I talked to the claims rep a few times and he's not in agreement with the appraisal logic and is making it sound like it's foreign to him. Can you please advise on your thoughts... Thank you so much!
ANSWER: Glen, this is a common type of argument. Insurance companies feel like they are the authority on determining value. When one works as an adjuster for an insurance company, the company invariably attempts to train employees in a dogmatic (this is just how it is) manner.
Unfortunately, not one time during my career was any of the management competent to train in the area of formal appraiser. In my experience, if the argument ever makes it to court, the question is purely about which appraiser is competent and utilized the proper method.
In the US, the only known published and peer reviewed standard for performing appraisals is called the UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE.
My prediction is that you will not be able to get any satisfaction without filing a suit against the negligent party and proving your damages in court. The insurance companies use a tactic called "say no, don't negotiate, and try your luck if somebody has the guts and money to sue the insured."
It is truly a despicable problem to which our justice system offers no viable and economic solution outside of free work by an attorney and expert appraiser.
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QUESTION: Thank you so much Justin (especially for the quick response)! Can I just ask, do you think there's any value in invoking the 'appraisal' clause? I think that's where each party chooses an independent appraiser (where both appraisers create their own appraisal) to see if both can agree on a final value (with an umpire ruling if the appraisers are not in agreement), as an approach prior to any suit. I think that would require myself to pay for another appraisal, and I just wonder if this would be fruitless. I wonder if the insurer's appraiser would truly be independent also...
Thanks again (really appreciated)!!!
One cannot invoke the appraisal clause when the insurance company is not their own insurance company, the only option is suit.
If it were your own insurance company, you would be required to invoke the appraisal clause (I do those all the time) before you would have proper standing to file a suit for breach of the contract.
In your current case, you have a civil claim (not insurance claim) against a negligent driver. Luckily (or unluckily, however you want to look at it) that driver has liability insurance which will pay for any judgment you get against the negligent person. As you can see though, they (liability carriers) do not typically make settlement offers that will cover the true cost of making the victim (not customer) whole.
The appraisal clause (even though not an option here), is not a very great option. It's better than nothing if you have a true expert appraiser, but those are few and far between. Most carriers take advantage of the lack of true professionals in that field and simply name a "yes man" or worse yet, some (USAA / GEICO) always try to name themselves as their own appraiser. . . lol. Even if the appraiser for a carrier seems independent, it is exceedingly rare for appraisers to agree on an umpire if they can't settle the case, so most of the time, a judge appoints an "umpire". In my experience, the umpires that are on a judge's list are typically ex-insurance defense attorneys that have economical ties to the insurance industry. It is really a racket, I tell ya. . .