Sun Herald: State Farm refusing appraisal, despite its own policy language

JAMES EDWARD BATES/SUN HERALD - State Farm refusing appraisal, despite its own policy language - Insurer is urging mediation instead by By ANITA LEE Hank Kuehn looks over damage from Hurricane Katrina in the kitchen of his Ocean Springs home on Thursday. State Farm Fire and Casualty Co., which insured his home, refuses to engage in the appraisal process to resolve his and other Hurricane Katrina claims, even though its own policy mandates appraisal on demand when the amount of an insured loss is in dispute. State Farm taped on appraisal OCEAN SPRINGS - State Farm Fire and Casualty Co. refuses to engage in the appraisal process to resolve Hurricane Katrina claims, even though its own policy mandates appraisal on demand when the amount of an insured loss is in dispute. Instead, records show, the company is urging policyholders to settle disputes through a mediation program sponsored by the Mississippi Department of Insurance and funded by insurers. The insurance company controls the final settlement offer in mediation. A professional mediator has no authority to tell an insurance company how much money it owes a policyholder, instead serving as an impartial facilitator during negotiations. In appraisal, an appointed umpire can side with either party, resulting in a decision that is final and binding. Appraisal can be used only when a settlement is in dispute. It would not apply in cases where coverage has been denied. Insurance Commissioner George Dale also has urged policyholders to try mediation. He says the program works and that policyholders retain the right to pursue other avenues when it doesn't. There's nothing to lose, he says. But attorneys and homeowners dissatisfied with mediation contend the process is humiliating. Also, mediation reveals the homeowner's case for damages, attorneys say, which gives the insurance company an advantage should the parties wind up in court. With Dale and insurance companies promoting mediation, more than 2,000 insured residents have signed on.

"Because policyholders are often unfamiliar with the terms of their policies, many are unaware the appraisal process exists. But advocates say appraisal is faster and less painful than a lawsuit, and more likely than mediation to result in a fair settlement."

That is, if insurance companies cooperate. Click here for the full article. If you enjoyed this post, subscribe and get FREE updates! Appraisal , Real Estate , Appraiser