If your property is damaged and insurance coverage is available to repair or replace it, you may need to obtain an appraisal. When your vehicle is damaged in an accident, you have the choice of submitting a property damage claim to your insurer or, if the other driver was at fault, to that driver’s INS company. An appraisal will help you establish the full value of your loss. If you have homeowner’s or renter’s INS that would cover your property damage, you may need to submit an appraisal to justify your claim.
Minor damage might not justify the cost of an appraisal. If your vehicle was dented and the cost of repair is less than the deductible on your policy, you will not be able to submit a claim to your own insurer. You can still submit a claim to the responsible party’s INS company, but you may be able to negotiate an amount with the claims adjuster without the need for an appraisal. A free repair estimate from a body shop might be enough.
When damage resulted in a total loss, making repair impossible, you are more likely to need a property appraisal. If your home was destroyed in a fire, you will need a real estate appraisal. If a valuable collection was stolen and you were insured against theft, you will need someone to appraise the collection. If your vehicle is beyond repair after a collision, you will want to have someone appraise its value prior to the accident.
You may also need a damage appraisal if your vehicle can be repaired but the adjuster handling your claim tells you that the vehicle’s value prior to the accident was less than the estimated repair cost. When that is true, the INS company will only pay the vehicle’s market value before the collision. If you think your vehicle was worth more than the adjuster thinks it was worth, a professional appraisal will help you settle that dispute.
If an INS adjuster tells you that a repair estimate is too high (based on the handbooks that guide the opinions of adjusters), an independent damage appraiser might also help you settle that dispute. Many appraisers are familiar not only with determining the value of property, but of assessing the cost of restoring property to its pre-accident condition.
Property damage appraisals are performed by experts. They adhere to professional standards when they arrive at their opinions. Judges and juries routinely accept the opinions of qualified appraisers. Insurance adjusters may decide not to challenge an appraisal that comes from a respected professional source, particularly if they think they will lose that challenge in court.
When a vehicle is a total loss, adjusters are likely to offer the “book value” of the vehicle minus its salvage value. The “book value” relied upon by adjusters is often unreasonably low. Instead of relying on an imaginary “book value,” an appraiser will usually search for vehicles of the same model that have similar mileage, accessories, and condition. The average selling price of those vehicles is normally higher than the “book” value offered by the adjuster. That appraisal method provides a more accurate measure of your loss. Using an appraiser can therefore maximize the amount you receive to settle your damage claim.
If your vehicle was damaged in a collision that was not your fault, you can make a claim against the insurer of the driver who was responsible for your property damage. Whether or not the accident was your fault, you can file a claim under your own collision coverage. If you make a claim against your own insurance company, you will have to pay the deductible. You have no choice but to do that if you caused the accident, but it may be the better approach even if the other driver’s negligence caused your property damage.
When you make a claim against your own insurer, the claims adjuster has a duty to deal with you in good faith. The adjuster representing the other driver’s INS company does not have that same duty. That does not mean that your company’s adjuster will always honor the duty to act in good faith, but you can sue the company for acting in bad faith if the adjuster breaches that duty. That gives you leverage over your own insurance company that you do not have against the other driver’s insurer.
In addition, when you make a claim against your own insurer, you can invoke your contract’s appraisal clause. Unlike the adjuster for the other driver, your adjuster is not free to ignore an appraisal. An appraisal clause gives you the right to furnish an appraisal to your insurance company if you cannot reach a settlement with the adjuster. The insurance company has the option of obtaining its own appraisal. If the two appraisers differ, they agree upon a third appraiser to act as an umpire. That appraiser decides which of the two appraisals is more accurate.
When an INS company obtains its own appraisal, you can be certain that it will use an “insurance friendly” appraiser. Those appraisers have often entered into a business relationship with the INS company that provides for the insurer to refer damaged property for an appraisal. Since the appraisers depend on the INS company for income, they bend over backwards to give the INS company an appraisal that will not give you the full value of your damaged property.
Insurance companies often minimize damage valuation by insisting that you take your vehicle to the repair shop they have chosen. Unless your claim is against your own insurer and that is a requirement of your insurance policy, you should choose your own repair shop. The shop favored by the insurance company may want to repair your car with used or inferior parts that make your car unsafe to drive. You may need to accept used parts since the damaged parts that are being replaced were used before the accident, but that does not mean you must accept unsafe parts. You are entitled to parts that match the condition of your damaged parts before the accident.
If your contract does require you to use your insurer’s repair facility, hire a mechanic after the work is done to make sure all repairs were made and that the car is safe to drive. Your insurer risks being sued for breaching its obligation to act in good faith if it will not pay to correct incomplete or substandard repairs that your mechanic identifies.
Before you hire a damage appraiser, ask that person whether he or she does appraisals for INS companies. You may be able to do internet research to verify the truthfulness of the answer you receive. Avoid appraisers who work for insurers. You want one who will work for you, not for the INS company.
Appraisers tend to specialize. Real estate appraisers do not appraise art. Appraisers of antiques do not appraise vehicles. You need to find an appraiser who has the specialized knowledge required to value the loss of your damaged, destroyed, or stolen property.
In addition to asking the appraiser whether he or she works for insurance companies, you should ask whether the appraiser:
If you have hired a personal injury lawyer, that person is probably familiar with damage appraisers in your area. The recommendation you get from your lawyer is usually the best one to follow.
Attorney Tim Ryan, author of "The Personal Injury Victim's Bible", has assisted thousands of injury victims, obtaining more than $1 billion for his clients collectively since 1981.
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