LP Loss Consulting
We’re the go-to guys when contractors, public adjusters or plaintiff attorneys have a client that has a dispute with their insurance claims department regarding damages, line items or the amount of their claim, whether they’re being low-balled, or their carrier is simply refusing to account for all the legitimate damages.
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What is "appraisal" anyway?
The term ‘appraisal’ means to establish a value of something – in your case, the fair market, replacement value of your loss. It’s not that different than a woman who wants to have a diamond ring appraised. She doesn’t go to the department store to get an appraisal; she goes to an expert jeweler.
Likewise, with the fellows, if you have a mid-sixties muscle car, you’d like appraised, you don’t go to a car dealership. You go to an expert on classic cars.
We are the experts in establishing an accurate value of your damage and amount of loss.
Once the client has made a supplemental claim and requested a re-inspection, what are they going to do if the re-inspecting adjuster simply refuses to negotiate a fair and equitable settlement or even refuses to come back out?
Since it’s now illegal in 47 states for your contractor to negotiate an agreed price between the client and their carrier on a claim, most consumers become frustrated and aren’t sure what to do. They basically have five options:
The Five Options
Option 1: Pay Out of Pocket
The consumer can pay their contractor for the legitimate line items that their carrier is refusing to include – out of pocket. This is what many consumers do, because they’re not sure what to do or they’re afraid to go up against their insurance company.
Option 2: Use a Cheaper Contractor
The consumer can agree to hire a mediocre contractor who performs sub-standard work, agreeing to the carrier incomplete scope. There are many contractor, not loyal to the consumer, that will piecemeal the project and make the carrier happy. This is what the vast majority of consumers do, because they’re not sure what to do or they’re afraid to go up against their insurance company.
Option 3: Litigate
Hiring an attorney CAN be effective – very effective at times. Nevertheless, litigation can also be expensive and very time consuming – who wants to wait half a year to a year or more? In fact, in a lawsuit in Rhode Island (Hahn v. Allstate Ins. Co., 15 A.3d 1026, 1030 – R.I. 2011), the court stated that “attempts to circumvent the appraisal process in favor of litigation” delay resolution of insurance claims and defeat the purpose of appraisal.”
Option 4: Hire a Public Adjuster
Like litigation, hiring an experienced, competent PA can be effective. It is possible too that it may become costly and time consuming. Many PA’s charge a percentage of the claim proceeds, which could cut a significant amount of your claims proceeds with their fee, although the good PAs pay for themselves.
The biggest disadvantage of using a PA is they must continue working with the same obstructionists. The very same unreasonable and uncooperative claims department that you’ve been saddled with. To be fair, PAs do have significantly more leverage than you do. However, did you know your claims adjuster can simply tell a Public Adjuster to pound sand and hang up on them and there’s really nothing that can be done about that besides referring the claim over to an attorney or an appraiser?
Option 5: Hire Us!
The best option (in our opinion) is for you to hire us. The appraisal process circumvents the obstructionists – the unreasonable and uncooperative claims departments. They have zero input into the process once they’ve selected their appraiser for any given loss. This is one of the many reasons that both Attorneys and PA’s hire us once they have been hired by their clients.
Why Appraisal Works When Negotiation Does Not
There are four distinct advantages that appraisal has over negotiating, litigating and/or hiring a PA:
We literally go around the obstructionists (the brick wall) that has been impeding your ability to get a fair settlement. Once the carrier names their appraiser, they have literally ZERO input into the process.
The appraisers must be independent. Black’s Law Dictionary defines it as: ‘The state or condition of being free from dependence, subjection or control.’ Neither party may tell their appraiser what to think, say or do. Imagine a process where the control freaks at the claims department are no longer controlling your claim outcome.
The average cost for a typical residential storm loss is between $1,000 to $3,000, depending on how reasonable the carrier’s assigned appraiser is. If they’re deliberately unreasonable, we will invoke the umpire to bring the appraisal to a fair conclusion and there will be an extra cost for the umpire. Sometimes it costs less than the stated average, and occasionally it costs more.
It’s taking 2-4 months to conclude a typical residential storm appraisals. Larger and more complex losses take longer sometimes. Important: We used to conclude appraisals in 1-3 months, but over the past year or two, we are convinced that carriers have been having their appraisers dig in their heels and drag things out and extra month or so.
This strategy is an attempt to get you, the consumer, frustrated with the process throw your arms up in disgust and basically give up on appraisal. Do not step into the trap that’s been laid for you. Most of that time is used by the carrier naming their appraiser (they’re given 20 days to do so) and the two appraisers agreeing on an umpire (the tie breaker if they come to an impasse). Naming the umpire is the most important thing we do. The umpire obviously must be unbiased to get a fair and equitable outcome. Add a month if the umpire is invoked. Sometimes it takes less time, and occasionally it takes more.
How The Appraisal Process Unfolds
1. Carrier low-balls or omits legitimate line items
2. Hire LPLC, pay retainer and upload docs*
3. Demand Appraisal
4. Wait for carrier to Name Their Appraiser: 3 weeks
5. Two Appraisers Agree on Umpire: 1-4 weeks
6. Site Visit – Unless Pricing Only Dispute
7. Appraisers Deliberate
8. Appraisers Either Agree or Invoke Umpire
9. Umpire Rules on Differences
10. Award is Signed – minimum 2 signatures
11. Pay LPLC Appraisal Fee
12. Submit Award for Payment – Typically 10 Days
13. Submit award and Get paid for covered loss
*Some clients fail to upload the required documents in a timely manner and their appraisal process languishes at step two. We cannot and will NOT assign an appraiser to your loss until we have all the required documents uploaded to our server. Please avoid further delay – do not postpone the process by being delinquent regarding the required documentation.
Once two of the three on the appraisal panel agree on the amount of the loss, the award is signed and both parties receive a copy. The insured sends a copy of the award to their carrier demands payment. Typically, carrier pay the amount of the award, for covered losses, within a week or two.