An Overview of the Appraisal Process of Your Property Insurance Claim in Florida
Updated: Sep 14, 2021
June 22, 2021
Do you have a property insurance claim with your insurance company? Did your insurance company send you a letter or other written communication where they demand appraisal to resolve your claim? This article outlines some questions you may have about the appraisal of your property damage insurance claim.
What is appraisal of an insurance claim?
Appraisal is an “alternate dispute resolution” — it is a process that takes place outside the court system. The goal of appraisal is to resolve a disagreement between the insurance company and the policyholder over the amount of loss for an insurance claim.
To put this in perspective, after a windstorm, roof or plumbing leak or other event, you report property damage to your insurance company and a claim is initiated. Your insurance company will then inspect the reported property damage. It reviews your policy and determines the value of the damages is below your deductible. Therefore, it will not agree to issue you any payment, and you are self-insured for those below-deductible damages. In return, you dispute the insurance company's valuation of the damages and assert payment is owed to you. To support this, you submit a bid/quote/estimate from a contractor to that reveals the repairs for the damages are above the deductible. You or your insurance company might then invoke appraisal to resolve the dispute over the amount of the property damages.
What are the terms of the appraisal process?
More often than not, the process of appraisal is included as a provision in your insurance policy. Every policy is different, so you will need to review your policy to know what it may outline about the process. Below is a standard and common appraisal provision our office sees:
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. Each party will: a. Pay its own appraiser; and b. Bear the other expenses of the appraisal and umpire equally.
Who is involved in the appraisal process?
Both the policyholder and the insurance company each name a separate appraiser, who each make opinions as to the valuation of the loss. If the two appraisers do not agree with one another as to the amount of the loss, they each present their findings to a neutral umpire, who ultimately makes the determination of the amount of the loss. The umpire is selected either by (i) mutual agreement between the two appraisers; or (ii) court-appointment where the appraisers cannot agree on whom the umpire should be.
Is there a deadline by which appraisal must be completed?
Not quite. There are very little guidelines on how appraisals must proceed. However, the general idea is that appraisal provides the parties a quicker and more efficient resolution than a lawsuit.
Florida recently passed new legislation, which will take effect on July 1, 2021. The act amends various requirements before a policyholder can move forward with a lawsuit for a property insurance claim, including the requirement to provide a 10-day notice of intent to file a lawsuit to the insurance company before doing so. If in response to the notice the insurance company demands appraisal, which the law permits it to do, the appraisal must conclude within 90 days after the expiration of the 10-day notice. In the event appraisal does not conclude by then, a policyholder may immediately file a lawsuit without providing additional notice to the insurance company. These terms strongly encourage the parties to push for the conclusion of appraisal within those 100 days.
May a policyholder file a Civil Remedy Notice (“CRN”) even if the claim is being appraised?
Yes. However, in Florida, a policyholder may not file a CRN within the first 60 days of appraisal.1
Wait, what is a CRN?
A CRN is a notice to the insurance company that is filed with the Florida Department of Financial Services when a party feels they have been damaged by specific acts of the insurance company in the adjustment and/or investigation of their insurance claim. For example, a policyholder may allege the insurance company (i) denied the claim without conducting a reasonable investigation; or (ii) failed to promptly settle the claim when the obligation to settle became reasonably clear.
A CRN is intended to meet a portion of legal requirements set forth in Florida law in order to subsequently bring a bad faith lawsuit against the insurance company.2 Bad faith lawsuits expose the insurance company to damages beyond the policy, so the CRN urges the insurance company to comply with its obligations to avoid further damages.
The insurance company may cure the alleged violations set forth in the CRN within 60 days after its filing.3 This would include paying for the damages stemming from the insurance claim in accordance with the policy before those 60 days pass. If the insurance company pays the damages during the 60-day “cure period,” then there is no basis for the bad faith lawsuit.4
Is a CRN valid if it was filed before appraisal was demanded?
Yes. Further, Florida has declined to toll the 60-day deadline to cure a CRN in the event appraisal is demanded.5 Therefore, if either party demands appraisal any time after the policyholder filed a CRN, the insurance company must still cure the alleged defects set forth in the CRN before the 60-day deadline. Otherwise, the insurance company could face a bad faith action.6
What should I do if I need help with my claim?
If your insurance company has demanded that you participate in appraisal based on the terms of the policy, there are various scenarios that may play out. Do not hesitate to contact a trusted attorney at The Law Offices of Amanda Qadri, PLLC, today to represent you and fight for your best interests. We will seek to ensure you are properly and adequately compensated for your claim.
Amanda Qadri is a Florida attorney specializing in property damage insurance claims. She currently represents home and business owners who demand to be properly compensated for their claims. Previously, Amanda previously defended insurers; therefore, she promises to fight for the best possible recovery.
The Law Offices of Amanda Qadri, PLLC
(954) 501- 0211
§624.155(3)(f), Fla. Stat. (2020).
See §624.155, Fla. Stat. (2020).
Talat Enterprises, Inc. v. Aetna Cas. & Surety Co., 753 So. 2d 1278 (Fla. 2000).
See Zaleski v. State Farm Ins. Co., 46 Fla. L Weekly D416b (Fla. 4th DCA 2021).
See Fortune v. First Protective Ins. Co., 45 Fla. L. Weekly D2092a (Fla. 2d DCA 2020) (The insurer’s payment of an appraisal award, after the expiration of the 60-day cure period, did not cure the alleged claim of statutory bad faith. Therefore, it was held insured’s can pursue their action for bad faith.).