Will Appraisal Remain Appraisal As We Know It?

Insurance companies are rewriting standard appraisal language in many states where this is allowed. We have recently received numerous requests about these newly found contract provisions. For example, one from a Colorado form sent to us indicated that appraisal could only occur if both parties agreed to the appraisal.

Absent a statute or regulatory prohibition, insurance companies can write insurance contracts as they wish. This includes changing the standard language regarding appraisal, the process of appraisal, and what can be appraised.

The trend is that insurance companies are rewriting standard appraisal clauses, and most departments of insurance are approving them. Those considering invoking appraisal should carefully read the appraisal provisions.

I warned about this in State Farm New Policy Filing In California Should Be Concerning To All In the Property Insurance Industry—An Example Is the New Appraisal Language. Ed Eshoo explained how these provisions may be illegal in states with a standard fire policy in State Farm’s Appraisal Provision Violates the Standard Fire Policy.

Thought For The Day

Some people don’t like change, but you need to embrace change if the alternative is disaster.
—Elon Musk