The proper and ethical role of the insurance adjuster and the litigator has been on my mind as I prepare for my presentation next week. PLAN Appraiser & Umpire Certification Conference in Denver, Colorado. I hope that anyone reading this post who participated in the survey thinks they have the right ideas about these positions. I helped certify these positions at a time when certification was in its infancy. In the 1990s – before appraisals were such a big business and a popular way to resolve property insurance disputes – I led a project to study the methods of making appraisals more effective. So, this topic has been in my head for longer than most people have been working on.
Many reading this post will say that the accountant’s job is to determine the amount of loss. Indeed, the standard test clause states:
The appraisers will put the amount of loss and actual cash value for each item. If the appraisers provide a written report of the agreement to the insurer, the agreed amount will be the amount of the loss. If the testers fail to agree within a reasonable time, they will submit their difference to the umpire. A written agreement signed by any 2 of these 3 will establish the amount of the loss.
But countries can use a different measure of responsibility. For example, the 2008 California case1 He also said that auditors are arbitrators:
Arguing that the trial court should uphold his demurrer without permission to amend, Carneghi said below that the evaluation process that was mandated by the Insurance Code and described in the plaintiff’s complaint was contradictory, and that he had the right to have arbitral protection because of his position as an auditor. he was the same as the arbitrator. In opposition, the plaintiffs acknowledged that the review process in this case was an adversarial process, referring to Carneghi as ‘a party’s auditor, or a judge.’ The plaintiffs argued that because Carneghi was alleged to have acted as a party-appointed agent, he was not entitled to arbitral immunity. The trial court ruled in the counterclaim that Carneghi prevailed, but left open the question of whether to allow the plaintiffs to amend. The court ultimately ruled in favor of the defendant without leave to amend.
. . . it is well established that ‘[a]n agreement to carry out an assessment contained in a policy of insurance constitutes a ‘contract’ within the meaning of [Code of Civil Procedure] section 1280, subdivision (a), is therefore deemed to be a contract contrary to the applicable law of the contract of partnership.’
Therefore, the first lesson is to review federal law, common law, and insurance. Opinions about an accountant may be right in one state but wrong in another.
The second lesson is that the law is changing and especially changing in relation to evaluation. Indeed, even the language of the policy is changing and may violate the rules of the fire policy, as discussed State Farm’s Appraisal Provisions Violate Standard Fire Regulations.
However, in my opinion, in most countries and in insurance appraisals, I think the only job of ethical appraisers is to determine the amount of loss and damage. The word “full” is, in my opinion, because one does not receive justice by having half justice or 95% justice. All justice is done only 100%. All insurers tell me that they expect their customers to get 100% of the benefits. Shouldn’t appointed appraisers and insurers have the same views and responsibilities?
And yes, this means that giving 150% is not fair to the insurance company.
I hate for insurers to choose an appraiser on “money” from a company based on the estimate of an opposing appraiser. It is not acceptable if the insurance agent believes in good faith. Similarly, I hate to see appraisers advertise differently than policyholders. It makes the task one of “how much can I get the prize to be” or “how can I reduce this prize” game versus – “what are the total losses?”
Of course, my opinion is more from the law enforcement because this is what I represent, and most of my opinion is what I have expressed in Texas Appraisers Must Be Impartial, Impartial and Unbiased: I doubt this is true of Texas Appraisals.:
The problem is that the concept of ‘justice’ depends on what you have analyzed to be an accurate estimate of damages and claims. I have never seen an insurance adjuster come to one of my clients asking for information about the damage, the history of the property, and to see why my client believes the damage is greater than the insurance company estimates. The reason for this is obvious – the insurance company does not want the appraiser to learn more information that will increase the value of the claims prepared by the appraiser. Insurance company appraisers often have a relationship with an insurance company adjuster or independent agent and are looking for future business. I truly believe that most want to keep the dollar value as low as possible-many have accepted many drinks at the various events I attend.
And, in many areas, the accountant acts as an assistant. In fact, I request that the clients I represent at trial have an appraiser who works as hard as possible to find out everything about my client’s loss and perspective. It is my opinion that a difficult and long-term person is working in the search for damage after the loss, the great damage is found that can not go without knowledge due to ignorance. Obtaining an accurate and reasonable independent estimate of the valuer’s damages requires effort, knowledge, expertise and an understanding of why certain assumptions are incorrect or invalid.
This type of analysis is unusual for those of us in insurance litigation. However, it is often the opposite rather than the rule of thumb….
Since I wrote this blog post in 2009, I have realized that an appraiser should be allowed to promote their position and assess the amount of loss to be accurate and precise. However, I think that some would view the role of a solicitor as similar to that of a party’s lawyer, which is not the role of an accountant.
One of the reasons why this topic is on my mind is because PLAN has a special description of the training of a referee on its website:
This course is The Advanced Appraisal Umpire Certification Program which focuses on the role of the Umpire Loss Appraisal Umpire in the Property Damage Appraisal Process and their duties, authority and practices expected to:
1.Demand Respect and Command Authority of the group.
2. Continue to Check-in with Team Members when you are with them.
3. Provide and adhere to the policy’s expectations, procedures, policies and procedures.
4. Make sure all Appreciators sound the same.
5. Maintain Non Ex Parte communication between the Group.
6. Eliminate Outside Influence or Interference in the Evaluation Process.
7. Compliance with Good Behavior in the Group.
8. Disable Default Locations and Conditions created by the Team or their Clients.
9. Develop procedures to resolve disputes raised by the Group or their Clients.
10. Ensure and maintain a fluid succession plan for the team and the process.
11. Identifying ‘Trojan Horses’, ‘Ambush Testing’ and other common ‘Methods’ of Testers.
12. To understand the rights, powers and responsibilities of the Umpires to continue the ‘Empty Seat Test’.
13. Give accurate Awards based on a thorough investigation of the loss under the Trial and the information provided by the team.
14. ‘Creating’ the ‘Group Discussion’ Award.
15. Provide proof of ‘Draft’ and ‘Final’ decision to Team Members.
16. Understand this and why ‘Dividing a Child’ is an inappropriate way to complete a Property Loss Assessment.
The number 11 is important. I have mentioned this as well as Steve Patrick’s training Thoughts on Badger vs Merlin and Other Review Topics at IAUA:
In the past, many legal auditors were inexperienced and often unaware of the games that would go on to audit. Experienced insurance adjusters can bring the final proof in front of the insurance company’s related directors. When these kinds of games got the results wrong, it really pissed me off. I taught and wrote in the presentation that policyholder appraisers could not accept this type of insurance company evaluation game and should ‘get down in the mud’ to stop these behaviors. Steve Patrick reviewed how to improve the technology of the insurance industry by trying to ensure that all parties have the opportunity to achieve a realistic and realistic result.
To be fair, I’ve also noted that in reading the comments of others on the Level the Playing Field forum, some seem more interested in achieving their best than in the reward of a well-tested and honestly supported system. Therefore, I have said that insurance company appraisers need to train themselves to ‘get down in the mud’ so they don’t get caught up in accounting rules that don’t exist. The point for everyone I thought I made was that the goal is to have a fair and just meeting where positions can be explored and considered fairly. Steve Patrick has been teaching ethical and honest methods as far as I can tell, and it’s not ‘other’ I’m talking about.
The takeaway from the testers that I wanted to make for those who come in is to be the best testers that you can be. This evaluation method relies on the ability of the appraiser to honestly determine the amount of the loss and to be able to recover the property and to point out the inaccuracy of the other party.
Auditing should be an alternative method of dispute resolution if it is fair to all policy holders and insurers. Although it is difficult to control morals, I think it is difficult to have a fair evaluation unless all evaluators first see their responsibility as seeking 100% fairness. This means that the owner of the plastic is being paid in full.
Thought of the Day
Justice in the life and behavior of the Government is only possible if it first resides in the hearts and lives of the citizens.
1 Lambert v. Carnegie158 Cal.App.4th 1120 (Cal. App. 2008).