Appraisal is an alternative dispute resolution mechanism contained in most Ohio property insurance policies to help resolve disagreements over “the amount of loss.” The typical Ohio appraisal provision looks something like this:
“Appraisal. If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.”
In order for appraisal to be appropriate in Ohio, there must be a covered loss and a dispute over the amount of that loss. To invoke the appraisal process, the Ohio insurance policyholders should make a written demand for appraisal and name a competent and disinterested third party to act as his or her Ohio property insurance appraiser. Once that happens, the insurer should name its insurance appraiser and hopefully the two appraisers can resolve the issues amongst themselves. If they’re unable to agree, the appraisers will submit their differences to a competent and independent third party known as the umpire. An award signed by any two of the three becomes binding, absent extraordinary circumstances such as fraud or mistake.
Sounds pretty straightforward, right? Well unfortunately an Ohio homeowners insurance lawyer is often needed in this process. First, the insurance company could object to (or outright reject) the insured’s appraisal demand for a number of reasons. We often see appraisal demands rejected because “there’s no agreement on the scope” of the loss or the dispute involves coverage questions. Second, the appraisers may not be able to agree on who to use as an umpire and the Courts must get involved to appoint that Ohio property insurance umpire. Third, the Ohio property insurance policyholder could simply need an experienced insurance lawyer to guide them through the process and ensure no nefarious behavior occurs throughout it. Lastly, there could be malfeasance in the Ohio insurance appraisal process that could warrant a lawsuit to attempt getting an improper award overturned, such as fraud, collusion, or extreme bias.
When all parties behave properly, the property insurance appraisal process can be an effective and efficient way of resolving disputes. Keep in mind, however, that insurance companies are in the business of making money and appraisers who agree to awards that go against the insurer’s wishes aren’t as likely to be selected for repeat business as those whose findings favor the hand that feeds them. Policyholders typically only get one bite at the apple, so it is imperative that you have an experienced team in place to ensure the binding award you get is fair and reasonable. Sometimes it’s better to just file a lawsuit, but each case is different. Feel free to contact our office for a no-cost consultation to see if appraisal is the answer to your dispute.