So what happens when a homeowner keeps getting denied claims. This could be a single claim that has been denied multiple times even after a re-inspection. Or it could be multiple claims that have been denied multiple times over several years.
So often we run into homeowners who have been in one of these two categories. Fortunately, there are still options for them.
Besides being a headache and a big frustration for the homeowner who is diligently paid their home premiums for years and years, the most important factor it’s for the homeowner not to give up and to understand that they still have options.
That’s where we turn to the appraisal option. The appraisal option is an intermediary between getting the damages paid for during initial inspection with an IA (Insurance Adjusters), and the nuclear option which is actually send the claim to legal where an attorney/law firm works on behalf of the homeowner.
It’s usually in large loss claims where legal might be a better option. This could be claims over $50,000. In these cases, a legal team might be better suited to handle the client.
So what is appraisal?
Most policies have a clause that if the insured and the insurance company disagree upon scope of damages, then the homeowner can hire their own public adjuster in order to dispute the claim with the insurance company.
According to Rimkus Consulting Group,
“If you disagree with the adjuster’s final estimate, tell the company why.
The company may have overlooked something and may make adjustments. If you
still disagree, you can use the appraisal process or hire a public insurance adjuster.
Appraisal. The appraisal process is only available in disputes regarding the amount
of your claim. It can’t be used for settling disputes about whether the damage is
covered by the policy.
The appraisal process begins with you and the company each hiring an appraiser.
The two appraisers then choose a third appraiser as the umpire. Your appraiser and
the company’s appraiser make their own estimates of your loss. If they are different,
the umpire makes the final decision, which is binding on both you and the company.
You are responsible for the expenses of the appraiser you hire and for half of the
So in a nutshell, the appraisal process is a tool for homeowners to fight back against legitimately denied claims, or underpaid claims.
In a perfect world, every insurance adjuster would follow the same standards and cover any roof that was legitimately damaged. But the reality is that insurance companies are in the business of making money, and more and more frequently, legitimately denied claims have to be sent to appraisal in order for the homeowner to receive funds to begin the repairs.
Appraisal is an alternative to litigation, to keep the claim out of the costly court system.
Appraisal begins when the homeowner sends an appraisal demand letter to the insurance company, invoking the appraisal clause. At that time the insurance company has 30 days to responds, then appraisal process begins.
That is when two expert appraisers, one for the homeowner, one from the insurance company, get together and negotiate scope of loss in order to come to a resolution.
The question that appraisal brings is along the lines of whether or not the said incident in the claim actually caused damages to the property. Appraisal does not relate to policy related issues such as whether or not the policy should cover losses in the first place.
For example, an appraiser cannot change specifics within a policy such as an ACV clause. Instead the appraiser is focused on whether or not the scope of damages did actually occur and will cause issues for the homeowner down the road.
Appraisal give the homeowner more leverage with the insurance company, even beyond what a roofer can accomplish for them. Roofers are not allowed to act as adjusters in the state of Texas, so an appraisal can be advantegous in this regards.
Now it must be said that the roofer should exhaust all options, including re-inspections, itel reports to determine reparability, or communicating relevant storm data and photo documentation of the damages to the insurance company. In a perfect world, insurance companies would respond to these reports and pay for the roof without appraisal, but that’s not always the case.
Especially in this Texas Market with over 11,000 roofing contractors, roofers have lost much of this leverage over the years because there are many claims that have been called in and reported to insurance companies that should have never been in the first place. Texas is an unlicensed market for roofing and this contributes to the problem of hack contractors manufacturing damage or calling in bad claims.
The fact that Texas is an unlicensed roofing market has created many issues for the insurance companies, which is the flip side of the coin.
So to anwer the aforementioned question:
Homeowners should use appraisal when all other options have been exhausted, and a reputable, expert roofer has made the case that the roof was legitimately damaged and yet the insurance company will not pay for it.
This evidence includes photo reports of collateral damage to soft metals/gutters, signs of splatter marks, and also, photo documentation of hail marks to the slopes of the roof.
The best way to describe it is like painting a picture in a forensic DNA case. It’s really the question of whether or not the damage is there.
Of what leverage roofers still have in this market, that is the most important aspect to getting a claim approved without appraisal.
Ideally, the roofer can hit this off early and avoid appraisal.
But the reality is that many large size insurance companies like Allstate for Safeco don’t even send out adjusters to the property. More and more frequently, the insurance companies send out third-party inspectors whose whole job is to deny roofs.
With never meeting the actual adjuster face to face, the roofer has to play a cat-and-mouse game between the insurance company in order to communicate evidence of the scope of damages.
It is all by design. The insurance companies purposely do this in order to reduce claim payout. It frustrates the homeowner and often puts them in the mentality of “oh I’ll wait for the next storm.”
Then the next hail storm occurs and the insurance company does it again.
Appraisal is a good option when this occurs.