Arbitration & Appraisal
When a claim is to be paid out, the insured and the insurer may not agree on the loss payout. If this is the case, a third party is brought to help break the tie so to speak.
For instance, your car it totaled. You feel your car is worth $10,000. The insurance company offers $6,000. You guys cannot agree, so you bring in a third party to set the value. They say $8,000, so $8,000 is the payout.
Or, let’s say you were hit by the city bus. You want 1 million dollars for pain, suffering, etc. The city only offers $100,000. You bring in a third party to assess the situation from an unbiased viewpoint and they $500,000.
So, in both cases, it’s a third party coming to help settle the disagreement. There is one big difference. In the first scenario, it’s a Property Damage Claim, in the second, it’s a Casualty claim. And that is how you know if you use an Arbitrator or an Appraiser.
In short
An Appraiser is for PROPERTY claims.
An Arbitrator is for CASUALTY claims.
Different states have different laws about HOW the process works, if the third party say is final, etc. Check your state rules for you exam.
Recommended: Gold
The GOLD Course is ALWAYS the recommended class series for all students as it teaches the material in more depth. Over 30 hours of the most in depth classes with a more intensive teaching of the topic. Learn more about P&C GOLD
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