Appraisal And Umpire Processes For Settling Disputes


The appraisal process for settling disputes can be easy or it can be a long, drawn out procedure finally ending with both sides appealing to an umpire.

The appraisal process as it applies to hail and wind damage to roofs typically begins after the original adjuster has rendered a decision that the homeowner does not agree with. The homeowner is typically unhappy because all of their “neighbors got new roofs and they didn’t.” The homeowner usually contacts a roofer if they haven’t already. The homeowner’s roofer often determines the roof needs to be replaced as a result of the observed damage. This is usually the point when an engineer or a roofing expert gets involved. The insurance company hires an expert to represent them in the appraisal process while the homeowner uses the roofer they have selected. In some cases the expert has the opportunity to pre-inspect the roof to ascertain the condition, while in other cases the observation is done with the roofer present. Once the roof observation is complete the fun begins. Now the roofer and expert attempt to reach an agreement on the extent of damage and the repair costs. In most cases the roofer presents his estimate for a complete replacement of the roof. In some cases the roofer presents his repair estimate to repair the roof in place. The expert draws upon available information from insurance adjusters, contractors, estimators, local costs, and other means to develop pricing for repairs. Most, if not all experts use the DURA formula to arrive at costs for repair or replacement of the roof. The DURA formula is used to estimate hail damage repair costs. The formula uses the damage observed (D), the unit repair cost (U), the repair factor (R), and the area of the roof (A) in squares. Once all available data is collected it is entered into the formula and repair and replacement costs are developed. The cost numbers are then compared and if the repair is 75 percent or greater of the replacement it is usually recommended to replace the roof. If the repair is less than 75 percent, mark the roof should be repaired. The numbers are now analyzed and the expert typically makes an offer to the roofer for what is believed to be a fair price for the repairs. In most cases this cost number is greater than the original number offered by the insurance company, but lower than the roofers number for replacement. If the roofer agrees to the cost number then the paperwork is signed and the insurance company is notified of the agreement. If both sides cannot agree on the cost to fix the roof, the next step is to proceed to an umpire.

The umpire process begins with the selection of an umpire. Typically, each appraiser submits a list of umpires to the other side and an umpire is selected by mutual agreement. The list of umpires can include any one the appraiser feels will provide a fair recommendation based on the site conditions. Umpires typically recommended include engineers, architects, and other roofing experts. Once an umpire is selected any offers made during the appraisal process become null and void. Both the insured and insurance company pay the umpire’s fees. Fees for an umpire can range from $500 to $1,000, typically split between the parties. The use of an umpire is the final step in the process of dispute resolution, as the umpire’s decision is final and binding. The umpire makes his observation with both appraisers present and gives each an opportunity to present their case up on the roof. Once all observations are complete, the umpire may choose to award the homeowner any amount deemed appropriate based on damages he observes. The umpire may award the homeowner money for a new roof, money for repairs or nothing at all. Once the decision is made there is paperwork required. The paperwork specifies the amount of money being awarded, if any, to the homeowner for their roof. In order to be complete the form is signed by the umpire and at least one appraiser. After all paperwork is completed, the insurance company is required to provide the payment specified.

As you can see there are certainly advantages for both sides in the umpire process. There are times when the umpire awards the homeowner nothing because the evidence does not support the claim. There are other times when the homeowner is awarded money for repairs based on the observations. And finally, there are times when the umpire awards the full replacement amount based on the observations. Proceeding all the way to umpire is a risky proposition for all parties involved. There have been times when an umpire has awarded nothing to the homeowner and their appraiser sends along a signed agreement to the insurance company asking for the amount that was offered by the insurance companies appraiser prior to the umpire’s decision. It is for that reason that it is imperative that the agreement stipulates that the offer is only valid until an umpire is chosen.

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