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Good News Friday - Part 2 ?? In today’s claims environment, can a $10+ million dispute be resolved amicably through the appraisal process? The appraisal process has been around and working for longer than most reading this have been alive. Certainly, an immeasurable number of insurance claims have been resolved through appraisal long before I was blessed to take my first breath. But why is it such a hot topic these days? I believe one reason is that acts of abuse and fraud hit such sensitive nerves that social media becomes an easy outlet for this understandable frustration. But why isn’t the same true when the process works as intended and the parties are satisfied with the outcome? It’s much easier to justify (in our minds) spending time writing a bad review about a company than it is to write a complimentary one. Complaints are a dime a dozen, but social media posts that highlight exemplary appraisal outcomes are hard to find. In this case study, the policyholder and insurance company were more than $10 million apart on their valuation. As such, they entered the appraisal process. The appraisers independently valued the loss and as luck would have it, the two appraisers were also $10 million apart after their valuation. When I sent my valuation to my counterpart, I offered to sit down and explain how I arrived at my calculations. He responded to the umpire directly, saying we were at an impasse. This happens often but is not the best approach. After having our in-person umpire meeting at the property, my counterpart finally heard my reasoning for my valuation. After 8 hours of on-site discussions with the umpire, it became clear that my counterpart had not spent adequate time formulating his conclusions and had not considered many relevant facts. The following day, the umpire encouraged us to have a frank discussion about our positions. We did that, and ultimately an agreement was reached within $500,000 of my valuation. We started more than $10 million apart, but after a professional and honest discussion, we ended up only a few hundred thousand dollars off in our conclusions. The umpire professionally navigated the remaining disputed items, and a three-party award was signed. My appraiser friend said, “You know, if you and I were able to talk about this like we did yesterday, we could have avoided the entire dispute with the umpire,” to which I agreed. The $10 million dispute wasn’t actually that big of a dispute after all; the elephant in the room just needed to be discussed. The moral of this story is that the appraisal process worked as intended to resolve a very large dispute, and it resolved with an amicable three-party agreement on the amount of the loss. In today’s climate, I find that many disputes are sent to appraisal simply because the parties are unable or unwilling to communicate effectively on areas of disagreement. True communication begins when we listen with the intent to understand, not just to respond.

Good News Friday - Part 1 ?? While some may view the appraisal process as "Broken" due to inappropriate gamesmanship from a few bad actors, it's important to remember that every profession has its share of bad actors. We continue to trust doctors for sound medical advice despite the existence of a few bad apples in the medical profession. A few bad policemen do not excuse anarchy, and a few bad lawyers do not excuse vigilantism. Likewise, some bad appraisers do not mean the process is broken. The presence of bad actors in any profession is representative of the percentage of the population whose moral compass is broken, and you will find roughly this same percentage across all professional lines without discrimination. When performed correctly with integrity and the attitude of "Getting it Right," Appraisal is a very useful and effective form of alternative dispute resolution. Let me share a personal experience of a good appraisal process. Several years ago, I was hired as an expert for a significant hail loss in West Texas. The carrier also hired a very well-known engineer who has written many storm damage-related publications over the years (everyone reading this is familiar with his work). We agreed on 95% of the buildings; however, we had differing opinions on the largest and most expensive roofing system. The attorneys for the case decided that appraisal would be a better option than litigation. They decided to appoint the very experts who had previously provided conflicting reports on the matter as their appraisers. Now, you may be thinking, someone "who already has an opinion before appraisal cannot act as an impartial appraiser." It's a valid concern, one that's been addressed by esteemed professionals like Chip Merlin and Steven Badger here: https://lnkd.in/e54epQZs Now, to be fair, I was not optimistic that we would agree on an umpire or the day of the week, much less the amount of the loss. To my surprise, the other appraiser was very friendly and reasonable. Our discussions quickly became amicable, and by the end of the phone call, we mutually agreed that we would take a second look at the damage with the goal of resolution in mind. Two weeks later, after another phone call, we had worked out a scope and value to remedy the damage to the roofing system in a fair and equitable manner for both parties. We signed the award with no umpire, no fighting, and no gamesmanship. Just two professionals who took the time to listen to each other with the goal of getting it right. There are many on both sides who would never entertain the idea of having prior experts serve as appraisers; however, with the right professionals, a fair resolution is possible. The appraisal process is not broken; it just needs positive attention displayed by those who strive for integrity. Stay tuned for future Good News Friday posts! ??

Tell me you’re working on an 8-figure appraisal without telling me. 2,434 pages getting ready for packaging to the umpire. It’s never the wrong time to hire the Right expert! #OmegaInsuranceAppraisals #Insuranceappraisal #disputeresolution