When two parties in a claim cannot agree, appraisal is often the quickest and fairest method of determining loss value. But if the appraisers are not able to agree on the value they can choose an umpire to help resolve the dispute, after which an award can be paid out. But in innumerable cases the parties refuse to accept a win, and insist on moving for a new trial to appeal the case.
There is no question that we live in a litigious society. But in my view it is ridiculous to litigate to an extent that requires suits, motions, trials, appointment of appraisers, umpire appoint failures, court appointments of umpires, orders for appraisal, new motions, and further new appeals—a process incurring unnecessary costs in the tens of thousands of dollars.
A system that was designed to help quickly and fairly resolve disputes can easily be abused, even to the point where the expense of appraisal far exceeds its value.
To avoid this problem, insurers must hire competent and experienced claims people who can “adjust” a claim to the insured’s satisfaction. I believe the need for appraisal most often arises from the incompetence or lack of experience of the claims staff--or to the greed of the insured who blindly insists on considering the claim an adversary proceeding. (But that’s another story.) Many problem cases can be avoided through the efforts of a staff of competent and experienced claims handlers.
The Post-Judgment Motions and Appeal
On February 26, 2010, the Stuckmans filed a motion for reconsideration of the trial court’s judgment entry arguing that the trial court inappropriately deducted sums “previously paid by Westfield” from the appraisal award, without any evidence in the record to support these deductions.
On March 4, 2010, Westfield filed a motion for leave to oppose the Stuckmans’ motion for reconsideration.
The Court of Appeal overruled the Stuckmans’ assignments of error concerning the enforceability of the appraisal provision and the trial court’s alleged lack of instruction to the appraisers concerning appropriate appraisal procedure, since the trial court clearly followed the terms of the insurance policy.
Prior to the trial court’s September 21, 2011 hearing upon remand, Westfield presented evidence of payments it had made to the Stuckmans totaling $35,456.78—the total amount of the appraisal award minus the $500 deductible. Despite this evidence, the trial court entered judgment in favor of the Stuckmans for $35,956.78. This constituted the total amount of the appraisal award without regard to the $500 policy deductible or Westfield’s previous payments, plus statutory interest from April 14, 2008--the date of the fire. As a result, the amount the Stuckmans recovered, actually doubled.
Since the trial court had evidence of Westfield’s payments at the September 21, 2011 hearing—evidence it did not have when it entered judgment on February 3, 2010—it should have deducted Westfield’s payments from the appraisal award for purposes of its judgment. The trial court should also have subtracted the $500 deductible from the appraisal award, as the Stuckmans conceded on appeal.
The Court of Appeal returned the case to the trial court to enter judgment after taking into consideration the amounts already paid, plus the deductible, in essence finding that the Stuckmans had been paid in full on their claim and the appraisal award.
In Carl Stuckman, et al v. Westfield Insurance Company, 2012 -Ohio- 986. (Ohio App. Dist.3 03/12/2012) the Court of Appeal was asked to eliminate prejudgment interest and take into consideration prior payments and the deductible amount that was the obligation of the Stuckman’s. See details of the case online.
Checklist for Retaining Competent Claims People
- Determine if the applicant has claims training in:
- Investigation
- Interviewing techniques
- Insurance law
- Interpretation of insurance contracts
- Medical terminology
- Treatment for soft tissue injuries
- Repair of automobiles
- Repair of houses
- Repair of commercial buildings
- Obtained the designations (administered by The Institutes):
- CPCU (Chartered Property Casualty Underwriter)
- AIC (Associate in Claims)
- Attended any insurance company's:
- Home office training schools
- Claims training programs
- Completed courses through:
- Vale Training Solutions
- A.D. Banker
- IRMI (International Risk Management Institute)
- Crawford Training School
- Similar training school
- Taken risk management or insurance courses at a college or university
- Has more than four years on-the-job experience adjusting claims
Barry Zalma is an insurance coverage attorney, consultant, and expert witness. He is the author of Insurance Claims: A Comprehensive Guide, Mold: A Comprehensive Claims Guide, and Constructions Defects: Litigation and Claims.
Email Mr. Zalma directly at zalma@zalma.com