Lawmakers are looking into new rules for umpires. No, not that kind—property insurance appraisal umpires.
If you’re wondering what in the world a property insurance appraisal umpire could be. Don’t worry. You’re not the only one who’s confused. Lawmakers in the Senate Regulated Industries Committee spent more than an hour questioning the Rep. Frank Artiles (R-Miami) about measure he's filing. Artiles says the bill is simple.
“My bill simply says for you to participate in this arena, you have to be licensed,” Artiles says.
Artiles says without requiring licenses, consumers are left unprotected.
“This bill regulates who could participate in the appraisal process. Today a felon could be an appraiser. Today a felon could be an umpire. So, when you have hundreds of thousands of dollars in insurance proceeds, that this entire industry is unlicensed. What I’m simply doing is this is a license,” Artiles says.
Now let’s get back to those terms. An appraiser, in this case, is someone who assigns value to a loss. So, if a person’s property has been damaged and it was covered by insurance the property owner and insurer might both use appraisers to value the cost of the damage. If those numbers are different, they’d use an umpire to help mediate. But Artiles says umpires need more oversight.
“Right now if you have a claim on your house and you have an appraisal. You basically don’t have any information on the umpire. You don’t sign off on the umpire. And 9 times out of 10 the umpire will split the baby as explained by the gentleman from [the Florida Department of Financial Services]. So if I as a consumer have $100,000 claim, the insurance says it’s $20,000, usually the umpire says, you know what, I’m going to split the baby because I have to get paid by both sides,” Artiles says.
Artiles' bill gives both the consumer and insurance company a say when it comes to picking the umpire and puts rules in place about who can be an umpire—including requiring a certain number of hours of continuing education. But that has people like Reggie Garcia with the Florida Justice Association concerned since often judges work as umpires.
“Retired judges who have presided in civil and contract cases dealing with millions of dollars of disputes are going to have to go downstairs to the DFS office and pay for a new license an take 24 hours in continuing education credits in addition to the 30 they need as Florida bar members,” Garcia says.
So Sen. Joe Negron (R-Stuart) proposed a plan to exempt judges.
“A retired judge who presumably would have in most cases decades of experience in deciding between two sides presenting evidence I think a retired judge is capable of making judgements without having to get additional training,” Negron says.
Negron’s amendment passed but that only addressed one of Garcia’s concerns. He says his organization is also concerned, for example, about rules in the bill relating to fees.
“I as the homeowner would have to pay 100 percent of the appraiser, 50 percent of the umpire, with President Margolis’s amendment that’s now capped at $500 and 50 percent of the experts that the umpire hires,” Garcia says.
Garcia says in some cases those costs could start to outpace a claim’s potential payout.
After a lengthy discussion the measure passed out of the Senate Regulated Industries committee on a 7-to-3 vote. It heads next to the Banking and Insurance Committee. A similar measure in the house is awaiting a hearing on the chamber’s floor.
