Florida Appraisal Process
Appraisal is an informal process for resolving insurance claim disputes. The only issue decided by appraisal is the amount of the loss. Issues as to whether the insurance claim is covered under the insurance policy are decided by the Court and not appraisal. It is therefore possible to have an appraisal award finding damages but the Court determines that there is no coverage for those damages.
Appraisal is governed by the insurance contract which will set forth the time and procedures that will govern the process. To start, each side, the insurance company and the claimant, will appoint their own appraiser to represent their interests. An appraiser usually is one who is familiar with insurance claims, damages and the cause of loss. Typically appraisers have a background in construction or as past insurance adjusters or public adjusters. The job of each appraiser is to separately determine the amount of the loss for the insurance claim. A neutral Umpire will decide the dispute between the two appraisers as to the amount of loss. Umpires, like appraisers, usually have a background in construction but retired Judges are used often as well. An appraisal award will require the signature of one of the appraisers and the Umpire to be valid. As a general rule of thumb, insurance companies will typically pay the amount of an appraisal award rather than to challenge coverage.
Appraisal is not Pursuant to the Florida Arbitration Code
In this case, after the claimant obtained an appraisal award in its favor, the claimant sought to confirm that award as a final judgment pursuant to the Florida Arbitration Code. The insurance company objected to the confirmation of the appraisal award on the basis of claimed irregularities in the appraisal process, unfairness, and coverage defenses to the claim. The trial court rejected the insurance company’s objections on the basis that they were all waived by its participation in the appraisal process. In reversing the trial court, the Florida Third District Court of appeal reasoned that appraisal is not pursuant to or subject to the Arbitration Code. Arbitration is a quasi-judicial process in which evidence is presented and defenses are considered. Appraisal on the other hand does not resolve the entire controversy between the parties. Appraisal merely determines actual cash value or the amount of loss for the claim. On account of the differences between appraisal and arbitration, the appellate court held that proper procedure requires that the insurance company’s defenses be resolved by way of a motion or trial as they could not be waived by the appraisal process.
Related Topics: Florida Insurance Law; Florida Appraisal Process; Florida Appraiser, Appraisal Umpire; Miami Insurance Lawyer,
