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Citizens Insurance Company Suggests Massive Changes to the Appraisal Process in Florida

Citizens Insurance Company Suggests Massive Changes to the Appraisal Process in Florida

A recent article published by Insurance Journal (March 28, 2023) highlights the Citizen’s Insurance attempt to make the appraisal process less accessible to policyholders in Florida. As a property damage attorney with extensive experience in insurance claims, I have extensive experience with the appraisal process and understand its importance for Floridians. Limiting this process may impact policyholders’ ability to make a fair recovery in the event of property damage.

“Citizens Property Insurance Corp. has weighed in on a question that could shake up the appraisal process in Florida insurance claims disputes, urging state regulators to require that appraisers be licensed adjusters.

In a motion to intervene in a petition filed with the Florida Department of Financial Services, the state’s largest property insurer said a determination that appraisers do not have to be adjusters would have a “perverse and unintended outcome,” and could potentially impact premiums and assessments paid by Florida policyholders.”

What is the Appraisal Process?

The appraisal process is a vital tool in resolving disputes between policyholders and insurance companies when there is disagreement on the amount of a loss. In Florida, the appraisal process is typically included in property insurance policies and serves as an alternative dispute resolution method.

The process involves the appointment of two appraisers – one selected by the policyholder and the other by the insurance company. These appraisers then choose a neutral umpire. The appraisers independently assess the extent of the property damage and the cost of repair or replacement. If the appraisers are unable to agree on the amount, they submit their findings to the umpire, who makes the final determination. The appraisal process aims to provide an unbiased assessment of the property damage and ensure that policyholders receive a fair recovery.

Negative Effects of Making the Appraisal Process Less Accessible

The Insurance Journal highlights concerns that making the appraisal process less accessible to policyholders may result in the following negative effects:

  1. Limited recourse for policyholders: If the appraisal process is not readily available, policyholders may have fewer options to challenge the insurance company’s assessment of their claim. This could lead to policyholders accepting inadequate settlements or making litigation their only recourse.
  2. Unfair advantage for insurance companies: Insurance companies have extensive resources and expertise in evaluating property damage. By limiting policyholders’ access to the appraisal process, insurance companies may gain an unfair advantage in disputes, leading to unjustly low settlements for policyholders.
  3. Increased litigation: Without the appraisal process, policyholders are forced to resort to litigation to resolve disputes over the value of their claims. This can result in increased court congestion and higher legal fees for both parties, potentially prolonging the resolution of claims.
  4. Reduced consumer trust: Limiting access to the appraisal process may lead to decreased consumer trust in insurance companies. Policyholders may feel that the insurers do not have their best interests in mind, which could negatively impact the insurance industry as a whole.

The appraisal process is an important option in ensuring that policyholders receive a fair recovery for their property damage claims. Limiting access to this process may have significant negative consequences for policyholders. It is essential for regulators and the insurance industry to work together to maintain and improve the appraisal process, ensuring that it remains an accessible and equitable solution for resolving property damage disputes in Florida.


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