If you are in the process of navigating a homeowners or flood claim, chances are, individuals are visiting your home with the purpose of providing a damage assessment for your insurer. While adjusters tend to focus on the severity of the damage itself, appraisers are in charge of linking the damage to financial value. Because “appraisal” is a word that has plenty of non-insurance contexts, it is important to clarify what appraisal means in relation to your claim if you want the best possible result. For example, you may get an heirloom piece of jewelry appraised to determine if its value is high enough to warrant pawning it off. While assessing value is at the core of all appraisers, different appraisers serve different purposes, which essentially affect the goal of the appraisal itself.
While different kinds of adjusters (independent, public, insurer-based) all sit under the umbrella of insurance relations, different kinds of appraisers work in different industries. Another kind of appraiser with whom you may be familiar is a real estate appraiser. Real estate appraisers, first and foremost, evaluate a home within the context of greater market value. From interest rates, to the perceived trendiness of certain neighborhoods, there are a variety of factors that influence an appraiser’s estimated value of a home. By considering the proximity to, say, a highway, or the recent selling price of a home down the street, the real estate appraiser can achieve their goal of determining for how much a home should be listed. This is the appraiser to call when you’re ready to put your home on the market.
When it comes to your property loss, the appraiser you should have inspecting your home should be a Department of Insurance-licensed insurance appraiser. These are the appraisers who evaluate your home in relation to the home itself, giving consideration to few outside factors. Right now, it’s the immediate damage that needs to be addressed, thus making it the target of evaluation. Consequently, the insurance appraiser’s goal is to determine how much it will cost to repair the structure of your home, as well as to replace internal contents ranging from the indispensable (like a washing machine) to the just plain expensive (like a designer handbag). While contents coverage will be discussed in greater detail in any upcoming article, the takeaway is that the insurance appraiser is the individual responsible for providing an inventory of your home to your insurance company.
It is also worth noting that insurance appraisers can also come in handy when you move into a new home. It can be hard to estimate how much insurance your home needs. A plan with higher limits may be appropriate if you have a glass home sitting on a fault line. Supplemental contents coverage may be needed if you have, say, a home recording studio. Of course, you never want to pay for more than what you need, so an appraiser can help determine if your prized futon and thrifted coffee table are worth insuring. While insurance appraisers may consider the values of other homes in your neighborhood in the context of a proactive evaluation, the intention has more to do with developing a point of reference than sizing up real estate competition.
So, insurance appraisers are pretty great resources, right? They certainly can be. But, like in any situation where money and people are involved, there is room for error. For example, if you have been employing a public adjuster throughout your claim, you may be inclined to consult with them about performing an appraisal assessment. As previously discussed, public adjusters are quite limited in their scope, and therefore cannot also serve as an appraiser of your property, even if they are duly-licensed in both roles. However, that it is not to say that a public adjuster may insist otherwise in order to increase their billable hours. If you find yourself a victim of this scenario, do not hesitate to contact an attorney in order to recoup your losses. Further, while public adjusters are deemed inappropriate to assist with the appraisal process due to their impartiality, that doesn’t mean all insurance appraisers may be fair or competent. Lawyers can help enlist the help of qualified appraisers while simultaneously guiding the appraisal process and utilizing the report when negotiating with the insurance company. Because an appraisal can directly affect your level of financial compensation in the wake of the claim, it is critical to have the process scrutinized by experts.