The Importance of Mandatory Right to Appraisal Time Triggers – Part Two
by Robert L. McDorman
In last month’s response to these great questions, I submitted the following statistics for repair procedure Right to Appraisal disputes where claims do not require an umpire:
Our records show that from the date of loss to final settlement, it takes 280 days on average, broken down as follows: from date of loss until the carrier issues their estimate of record, it takes 32 days on average; from the estimate of record date until the last supplement by the carrier is issued, it also takes an average of 32 days; from the date of the last supplement is issued by the carrier until the Right to Appraisal is invoked, it takes another 47 days; from the date the Right to Appraisal is filed until the carrier appoints their independent appraiser, it takes 48 days; and finally, from the date the carrier appoints their independent appraiser until the appraisers agree on the amount of loss, it averages 121 days.
Now, I would like to add statistics for repair procedure Right to Appraisal disputes where claims do go to an umpire. For these claims, our records show that from the date of loss to final settlement, it takes 399 days on average; 119 days longer than claims not requiring an umpire – and well over a year altogether! The biggest difference in cycle times between claims requiring an umpire versus those not requiring an umpire is in the period from the date the carrier appoints their independent appraiser until the appraisers and umpire agree on the amount of loss. For claims going to umpire, this takes 233 days on average versus 121 days for claims not going to umpire – a 112-day increase! (See graph.)
As I noted in last month’s editorial, Senator Schwertner’s bill contains critical time-sensitive triggers that prevent the harmful delays in the insurance claim process we see and deal with daily, as outlined above. As noted in the bill, should there be a dispute in the amount of loss, either party – the insurer or the insured – must invoke this Right to Appraisal within 90 days after the insurer accepts liability and issues their undisputed liability offer. Also, it sets a timeline that requires the parties to appoint and name their appraisers no later than the 15th day after the appraisal is demanded. The bill requires that the appraisers agree on the amount of loss on or before the 30th day following the date both appraisers are appointed. The bill sets a drop-dead date on the timeline for which the appraisers must select an umpire if they cannot agree on the loss. The appraisers must choose an umpire on or before the 15th day after the date the appraisers determine an umpire is needed. Should the appraisers not be able to decide on an umpire, the insurer or the named insured may request that a court in the county in which the named insured resides select the umpire. The appraisers and umpire must determine the amount of loss not later than the 30th day after the date the umpire is selected.
As you can see from comparing these time triggers in Senator Schwertner’s bill to our historical average cycle times for claims that go to umpire, the decrease from the date appraisers are appointed to the day the appraisers and umpire agree on the amount of loss (our historical 233 days versus the bill’s 75 days; 30 for appraisers, plus 15 to appoint an umpire, plus 30 for appraisers with umpire) would reduce the total repair claim cycle time by 158 days, a drop of over five months! This would be a huge relief for insureds in Texas.
The under-indemnification in repair procedure claims in Texas is rampant. Most of the estimates and supplements we see for repair claims have many overlooked (by design) safety and OEM-required operations needed to restore the loss vehicle to its pre-loss condition to the best of one’s human ability. Limiting or removing the insured’s right to appraise a repair procedure is a serious safety issue. Limiting or eliminating the Right to Appraisal by the insurance carrier in a repair procedure dispute will be the nail in the coffin for safe roadways in Texas.
Our position at Auto Claim Specialists is that the Right to Appraisal should be a mandatory contractual right in every policy. For the 89th Texas Legislative panel, we have teamed up with lobbyist Andrew “Drew” Graham to educate lawmakers and help secure mandatory contractual appraisal rights for all insured Texans. We, the insureds, are many, and I am confident that if we join forces and all do what we can, we can be successful in securing our rights and our children’s rights to contest insurance settlement offers that would result in underpayment of losses and/or shoddy and dangerous repairs.
The spirit of the Appraisal Clause is to resolve loss disputes fairly and to do so in a timely and cost-effective manner. Invoking the Appraisal Clause removes inexperienced and biased carrier appraisers and claims handlers from the process, undermining their management’s many tricks to undervalue the loss settlement and under-indemnify the insured. Through the Appraisal Clause, loss disputes can be resolved relatively quickly, economically, equitably and amicably by unbiased, experienced, independent third-party appraisers as opposed to more costly and time-consuming methods such as mediation, arbitration and litigation.
In today’s world, regarding motor vehicle insurance policies, frequent changes in claim management and claim handling policies and non-standardized GAP Addendums, we have found it is always in the best interest of the insured or claimant to have their proposed insurance settlement reviewed by an expert before accepting. There is never an upfront fee for Auto Claim Specialists to review a motor vehicle claim or proposed settlement and give their professional opinion as to the fairness of the offer.
Please call me should you have any questions relating to the policy or covered loss. We have most insurance policies in our library. Always remember that a safe repair is a quality repair, and quality equates to value. I thank you for your question and look forward to any follow-up questions that may arise.
Sincerely,
Robert L. McDorman
Want more? Check out the April 2025 issue of Texas Automotive!