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Re: A Post-mortem

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Posted by tonyb on May 07, 2001 at 04:34:39:

In Reply to: A Post-mortem posted by tonyb on March 06, 2001 at 22:53:38:

: (The DOI wrote:) The Standard Fire Policy set a rigid timetable which an insurer could use to its advantage: on the 15th day after the appointment of the appraiser, it could declare an impasse, and file with a court of its own choosing (which, under a commercial policy, might be any where in the country) to appoint an umpire - three guesses who the umpire would be likely to favor? Under the current policy, if the two appraisers are able to settle the disagreement without an umpire, there is no need to spend the money appointing one.
: (Mr. Braga wrote:) ^It has been my experience that umpires only charge for actual services rendered in resolving issues in which the appraisers cannot agree. By selecting an umpire before an impasse there is an established set of parties to the transaction. Can you imagine playing a ball game and waiting until you have a disagreement before you decide who should umpire? The only impasse I can imagine is if the appraisers could not agree on an umpire, and I think there is every bit as good a chance of an unbiased umpire being selected by the court, as there is in selection by the appraisers, after all, they try to get the umpire that is most likely favorable to each of them. It is only human nature.


Extracted from April 6, 2001 Talking Insurance:

(Question from a member of the audience regarding what do you do when you reach an impasse.)

(Mr. Braga's response) It is interesting that you bring that up because that is something I forgot about, and I'm glad you brought that up. In the past when you reached an impasse: let's say that you didn't even enforce your rights, or you didn't want to understand your claim, but eventually you realized that you weren't getting what you felt you were entitled to. And you decided at that point that you had an impasse and the way to solve it at that time was though an appraisal proceeding. It's an informal way of getting it resolved without going to court. It's a form or arbitration. You select an appraiser, the company selects an appraiser, both appraisers select an umpire. Those kinds of procedures usually went pretty quickly and they're very inexpensive because all you needed for expertise was someone who understood the loss. It could be an adjuster, it could be an appraiser, it could be a judge, it could be an attorney, it could be a lot of different people. That was how things were resolved. Recently in a dialogue I had with the department of insurance in Massachusetts, they told me that in the new language the umpire is no longer selected now. The appraisers just talk amongst themselves and if they can't agree then later they go to find an umpire, and that doesn't make sense to me and I told them it didn't really make sense to me, because can you imagine playing a ball game and waiting till you have a disagreement before you figure out who is going to be the umpire. You should know the parties to the transaction going in. But at any any rate, after that..after that, I found out that the whole appraisal process has been eliminated..eliminated. It's gone. So I didn't know it until I got my own policy. This was just last week, and I'm looking through my own policy and I find out there is an endorsement hereby eliminating the whole process of appraisal, and in its place you have to go to court to have the court appoint three referees. Now you don't have a choice in either one of those three. Before you had a choice of one of the appraisers. Now you don't have a choice, and you have to go to court, which is always more expensive to go to court, no matter what the procedure is. It's more expensive and it's more time consuming. So that's really the news. I'm glad you brought it up because I forgot about that, but that's quite a set-back for us all. We no longer have that available to us as a means to resolve our problems.

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