ALLDATA sat down and talk with Billy Walkowiak, owner and founder of Collision Safety Consultants. He is a licensed Motor Vehicle Damage Appraiser, Department of Insurance in North and South Carolina, and he is an expert on the Appraisal Clause, found in most automobile insurance policies, as well as vehicle diminished value, total loss assessments, and pre-purchase and post-collision repair inspections.
All insurance policies provide that your vehicles are to be returned to pre-accident condition, with parts that are equal to or better than the parts they are replacing. An appraisal clause is a clause or paragraph found in most, but not all, automotive insurance policies. It is designed to be a way of reaching a settlement when there is a dispute over the amount of a loss between the vehicle owner and their insurance company, and can be invoked by either party. The appraisal clause can be utilized when there is a dispute over the cost to repair the vehicle, the value of the vehicle in a total loss claim, or in some states, the diminished value of the vehicle.
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An example from Billy Walkowiak's files |
| “The customer hit another car. His cream puff 2005 PT cruiser had minor damage. The insurance company estimated $1,190. The repair shop’s estimate was $2,905. The Cream Puff PT Cruiserinsurance company then said it was a total loss, and that the car was worth $3,100. The customer really wanted his car fixed so he hired us (Collision Safety Consultants) and invoked the appraisal clause. The insurance company’s own independent appraiser said the car was worth $4,200, so the insurance company “untotaled” the car, and paid the shop their original repair estimate, and 22 days of car rental.” |
How it works
1. Notifying the insurance company
In most cases, the customer, the vehicle owner, writes a letter to their insurance company telling them that as a result of being unable to reach a mutually agreeable settlement, they are invoking the appraisal clause of their policy. The letter should be sent by certified mail/return receipt requested. Ideally this takes place before any repair work is done on the vehicle, but sometimes it is only in the supplement stage of the estimating that the real extent of the damage becomes known.
2. Selecting an independent appraiser
Each side will select a competent, independent appraiser to assess the loss. The automobile owner should select an appraiser who is knowledgeable in the specific area that is the subject of the dispute and who is familiar with the appraisal clause process, which is the role Billy Walkoviak’s company Collision Safety Consultants plays in these disputes. Each side is responsible for paying their chosen appraiser.
3. Conducting the independent appraisals
The customer’s selected appraiser as well as the appraiser selected by the insurance company will each independently appraise the loss. The two appraisers will then communicate and discuss their findings. During this process the two appraisers will attempt to reach a mutually agreeable figure, not unlike a mediation.
4. Finalizing the negotiation
If the two appraisers are unable to reach an agreement, then the two appraisers will mutually select and agree upon a third party “umpire” appraiser who will review the positions and documentation of the two primary appraisers and may also do an inspection and assessment of their own. If an umpire appraiser becomes necessary, the customer and the insurance company will each pay half of the cost of the umpire. Then the amount of loss agreed upon by any two of the three appraisers will be final and binding on all parties.
Documentation is key
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What’s in it for you?
Although it may add days or weeks to the estimate approval process, customers who invoke the appraisal clause are more likely to get approvals for higher estimates, based on OEM parts and procedures, which translates, of course, into more repair work for your shop. With the added benefit that you, and the customer, can take comfort that the repairs being made will get their vehicle back on the road in as close to pre-accident factory-condition as possible.
