Policyholder Question: How long does an umpire have to make a decision?
First a little background, an umpire in the insurance property world has nothing to do with baseball except that a baseball umpire and an umpire in a property insurance dispute have one thing in common--both have to make a decision. The baseball umpire will have to make a decision quickly, where as an umpire in the appraisal dispute resolution forum should take as much time as needed to make a decision based on all the facts. A good umpire will thoroughly review of all the materials provided to him or her by the two appraisers (representing each side of the dispute) who agreed to his or her appointment. This can and often should include a visit to the loss site (if the property in question is still standing) along with the two appraisers and the policyholder if they want to understand the opinions as to why the initial adjustment was wrong.
In some cases where I was appointed an umpire, I have asked for a meeting of all parties to come to together to explain to me their positions which would include any experts that have been retained. Generally, an appraisal where this happens is a complex matter involving many fact issues and a significant amount of money. As an example, the 9/11 World Trade Center losses were settled in the appraisal forum. After the coverage questions were resolved, it fell to the two appraisers and an umpire to determine the actual cash value of the two towers. While not a party to this appraisal, I do know one of the appraisers and based on my limited conversation with him this matter took a very significant amount of time, travel, experts, and expense to reach an agreement on the amount of loss of these two buildings on an actual cash value basis.
So the short answer is the amount of time an umpire should take is unique to each case. An umpire really has no reason to drag an appraisal out. The fact that he or she was agreed to by both parties generally means that person is respected, experienced and knowledgeable about the appraisal process and property insurance matters at hand.
From an ethical point of view, an umpire should be deliberate and diligent in his or her efforts while coming to a decision in a timely manner. Most important is to work hard to get the facts and try to get the two appraisers to agree. Failing that, the insurance umpire needs to step up to the plate and make the call in a timely manner. If you have questions regarding any property insurance related issues, please call 800.321.4488 or contact us to submit a question to one of our public adjuster or loss assessor experts.
PS: I will be teaching the Wind Umpire Certification class at the Windstorm Conference in Orlando, FL at the end of this month.