Auto Insurance Claims: How to go to an umpire?, appraisal clause, inaccurate estimate

Question
QUESTION: My insurance sent me a check based on its inaccurate estimate after an accident. The insurance does not want to revise its inaccurate estimate but wanted me to have the vehicle repaired and then they will pay the difference to the repair shop directly. I want my insurance to send me an additional check based on the repair shop's estimate because I have not intended to have my vehicle repaired right now. In addition, I think my insurance has no direct repair relationship with the repair shop and is not accepting the liability for the quality and safety of my vehicle's repair. I want to pay the repair shop. My insurance is obligated to write and pay the accurate estimate regardless when my vehicle is repaired, right? Since there is a difference between the repair shop’s and insurance estimate and the insurance does not want to revise its inaccurate estimate, can I request to go to an umpire and how the umpire is usually selected? Thank you for your answer.

ANSWER: Hi Lou,

If you ar dealing with your own insurance company there is a clause in your policy called the Appraisal Clause. You can invoke the appraisal clause in writing to your insurance company. Here's the way it works.

You and the insurance company would each have to hire and pay an independent appraiser to inspect the vehicle and write a damage estimate. The two appraisers would then get together and attempt to come to a negotiated agreement on the amount of the loss. If they are unable to reach an agreement then the two appraisers would select and agree upon an umpire appraiser the cost of which would be equally split between you and the insurance company. Then an agreement between any two of the three would be final and binding on all parties.

Without invoking the appraisal clause, the insurance company will not pay based on the shops estimate. Ususally the insurance company will write a low ball estimate and the shop will write an excessive estimate. Then the two will negotiate when the vehicle is actually in the shop for the repairs.

I hope this helps
Richard Hixenbaugh


---------- FOLLOW-UP ----------

QUESTION: Thank you for your reply. You said, “Usually the insurance company will write a low ball estimate and the shop will write an excessive estimate. Then the two will negotiate when the vehicle is actually in the shop for the repairs.” In my case there is no disagreement to the repair shop’s estimate. The problem is my own insurance does not want to revise its inaccurate estimate and pay me the difference but want me to have the vehicle repaired and then they will pay the shop the difference directly. I do not agree because I have not intended to repair the vehicle right now. The insurance is obligated to write the accurate estimate. In addition, the insurance has no direct repair relationship with the repair shop and is not accepting the liability for the quality and safety of my vehicle's repair. Thus I want to pay the shop but the insurance should pay me based on the accurate estimate. How shall I do, file the complaint with the state department of insurance or what else? Do you have any suggestion?

ANSWER: Hi Lou,

Yes. At this point the only thing you can do is to file a complaint with the department of insurance. They however, will likely tell you to invoke the appraisal clause to settle the manner.

Good luck
Richard Hixenbaugh

---------- FOLLOW-UP ----------

QUESTION: Hi, I do not understand why I should invoke the appraisal clause. My insurance is willing to pay the shop’s estimate but just wants to pay the difference to the shop instead of me.  Is it mandatory that the insurance must send the supplementary check to the shop instead of the insured if there is a difference between the insurance and repair shop’s estimate?

Answer
Hi Lou,

o it is not usuall unless you have a lienholder. Then the insurance company must protect the interests of the lienholder. But if there is no lienholder, they should issue the check to you. If they will not do this you should file a complaint with the state insurance commissioners office.

I hope this helps
Richard Hixenbuagh