Appraisals For Insurance Claims

The bill, addressing appraisals conducted for insurance purposes, sets standards for when an appraiser, including an appraisals umpire, is considered fair, impartial, and neutral. The bill imposes the following requirements:

• An appraiser is prohibited from having a direct, material interest in the amounts determined by the appraisal process;
• An appraiser, including an appraisals umpire, must disclose to all parties any known fact discovered at any time that a reasonable person would consider likely to affect the appraiser's interest in the amount determined by the appraisal;
• Both the insurer and the insured, and their representatives, are prohibited from communicating with the other party's appraiser without the consent and participation of both parties; except that appraisers may directly communicate with each other to reach an agreed-upon settlement amount;
• The insurer, the insured, and their representatives, including adjusters, attorneys, and appraisers, must not have ex parte communications with the umpire during the appraisal process; and
• The umpire must not have ex parte communications with the insurer, including adjusters, the insured, and their representatives, including public adjusters.
  (Note: This summary applies to this bill as introduced.)