Rhode Island Insurance Appraisals

The appraisal process in Rhode Island is similar here as with other states. Reliable Property Adjusting, Inc. can assist either party through this process. It is important to note that in Rhode Island an insured who does not agree with a proposed settlement must first pursue the appraisal process before any litigation.

“Unless the insurer denies coverage for the claimed loss and if the dispute is limited to the amount or extent of the loss, the parties are required to submit to the appraisal process.” Hahn v. Allstate Ins. Co., 2009- 164-APPEAL, 2011 WL 1196896 (R.I. Mar. 31, 2011).

Rhode Island also has some specific guidelines as to the actual process which is slightly different than what is spelled out in the standard H03 policy. R.I. Gen. Laws § 27-5-3 sets forth the procedure for Appraisal under a standard home owner insurance policy. The statutes states in part:

In case the insured and this company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty (20) days of that demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen (15) days to agree upon the umpire, then, on request of the insured or this company, the umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two (2) when filed with this company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him or her and the expenses of appraisal and the umpire shall be paid by the parties equally.”

Reliable Property Adjusting, Inc. is aware of these specific laws and follows the guidelines perfectly. This means that we follow this basic outline for all Rhode Island property appraisals:

1. We first accept the appraisal assignment from either the insured or insurer.
2. Our appraiser will then contact the other appraiser; or if one has not been chosen, our appraiser will contact the other party and advise them to promptly select their appraiser within 20 days.
3. Once our appraiser has contacted the other appraiser, the first task together is to then select the umpire. This selection must be made within 15 days. This individual may not need to be contacted or hired at this stage, but according to Rhode Island law this step must be followed before the loss is reviewed. 
4. The two appraisers then meet at the loss location to review the details of the loss and the various estimates. Our appraiser collaborates with the other appraiser on the scope and amount of loss.
5. If our appraiser and the other parties appraiser can come to an agreement, then that amount is provided in writing to both parties. This would be the final step if an agreement can be made.
6. In the event that our appraiser and the other appraiser do not agree, then they contact the umpire that was pre-selected and ask that individual to intervene.
7. The umpire reviews reviews the facts and details of both appraisals. He/she does not create a 3rd appraisal, but rather must agree that one of the two appraisers is “more correct.” The umpires decision would be the final step in the process. Their decision would be binding for all parties.

It is also important to note that in Rhode Island, the appraisal procedure is considered Arbitration and governed by the Arbitration Act, R.I. Gen. Laws §10-3. Waradzin v. Aetna Casualty and Surety Company, 570 A.2d 649 (R.I. 1990).

One final thought when it comes to appraisals in Rhode Island. We have seen by sad experience that at least 95% of appraisals are brought about because a public adjuster feels that a claim was undervalued. Unfortunately, too many times we have seen the same public adjuster attempt to also act as the “other appraiser” and represent their client as both a public adjuster and an appraiser. This falls short of the insurance contract which states that “… each party will choose a competent and impartial appraiser,” or stated differently by Rhode Island Law, “… each shall select a competent and disinterested appraiser.” As a public adjuster is neither impartial nor disinterested, we have found that it is important to emphasize and enforce this part of the contract. On a few occasions we have even seen the insureds hired contractor or the actual insured attempt to act as the appraiser, which also would fail to meet this guideline.  The issue even went to court in Rhode Island in a case involving Aetna Casualty & Surety Co. v. Grabbert. In this case the trial court found that the existence of a contingency fee arrangement between the insured and its selected appraiser constituted a financial interest and undermined confidence in the arbitration system.

In the event that any party attempts to fill the role of the appraiser who does not fit the role as impartial, disinterest, and of course competent; then we usually advise our client to consider the matter null and void if a proper appraiser is not selected within the 20 day period.