|(a) Applicability. This section and §§5.4212
- 5.4222 of this title describe the appraisal process and apply when:
(1) the association has accepted coverage for a claim,
in full or in part; and
(2) the claimant disputes the amount of loss the association
will pay for the accepted portion of the claim within the time allowed
by Insurance Code §2210.574 or §2210.5741.
(b) Appraisal explanation. The association must include
an explanation of the appraisal process, and the process for requesting
a supplemental payment, with each notice either:
(1) accepting coverage under Insurance Code §2210.573,
(2) stating the amount of the replacement cost payment
the association will make in response to a request under Insurance
(3) The explanation must include the deadlines for
demanding appraisal and requesting a supplemental payment.
(c) Appraisal demand.
(1) A claimant may demand appraisal under Insurance
Code §2210.574 or §2210.5741 by telling the association
that the claimant disagrees with the amount of loss the association
will pay for the accepted portion of the claim. A disagreement includes
asking for additional money or telling the association that the amount
may not be enough.
(2) A claimant may demand appraisal under Insurance
(A) at any time after the claimant receives the claim
acceptance notice described in Insurance Code §2210.573(d)(1)
or (2), but not later than the 30th day after the date the claimant
receives the replacement cost notice described by Insurance Code §2210.5741(b);
(B) if the claimant has not demanded appraisal on the
claim under Insurance Code §2210.574; and
(C) regardless of whether repairs are complete.
(3) If the association receives an appraisal demand
from a claimant, the association must, in writing, acknowledge the
appraisal demand not later than the 10th day after the date of receipt.
(4) The acknowledgment of an appraisal demand must
include an explanation of the:
(A) appraisal process, including that the process begins
when the claimant hires an appraiser; and
(B) process for requesting a supplemental payment,
including the opportunity to seek a supplemental payment before the
appraisal process begins.
(d) Appraiser selection. The association and the claimant
must each hire an appraiser who is independent and qualified under §5.4212
of this title (relating to Appraisal Process - Appraiser Qualifications
and Conflicts of Interest).
(e) Appraiser fee information. No later than five days
after hiring an appraiser, each party must tell the other party the
fees to be charged by the appraiser.
(f) Umpire selection.
(1) The appraisers must select an umpire who is independent
and qualified under §5.4214 of this title (relating to Appraisal
Process - Umpire Qualifications and Conflicts of Interest).
(2) If the appraisers are unable to agree on an umpire,
either appraiser may ask the department to select an umpire. The appraiser
must submit the request under §5.4251 of this title (relating
to Requests and Submissions to the Department). The request must include
the following information:
(A) the type of policy;
(B) a description of the claim and, if known, the claimed
value of the covered loss;
(C) the association's claim acceptance letter, including
the amount the association will pay for the loss; and
(D) any other information that the department requests.
(g) Umpire participation. The selected umpire must
participate in the resolution of the dispute if the appraisers fail
to agree on a decision.
(h) Decision. If the appraisers agree on the amount
of loss, their decision is binding on the parties as to the amount
of loss the association will pay for the claim. If the parties cannot
agree, and the umpire participates, an itemized decision agreed to
by any two of these three is binding on the parties as to the amount
of loss the association will pay for the claim. Parties may challenge
the decision only as permitted by Insurance Code §2210.574.
(i) Notice for actual cash value coverage. The association
must send a notice to the claimant for each accepted claim for damage
to a structure, or part of a structure, on which the claimant has
only actual cash value coverage and appraisal has not been demanded.
(1) The association must send the notice not earlier
than the 45th day before but not later than the 30th day before the
deadline to demand appraisal under Insurance Code §2210.574.
(2) The notice must inform the claimant that:
(A) appraisal has not been demanded; and
(B) if the claimant disagrees with the amount the association
will pay for the accepted part of the claim or thinks the amount may
not be enough, the claimant must tell the association before the appraisal
deadline. If the claimant does not tell the association before the
deadline, the claimant cannot ask for a supplemental payment after
the deadline passes.
(C) The notice must also inform the claimant of the
deadline for demanding appraisal and requesting a supplemental payment.
(3) The association is required to send the notice
only one time, unless the department extends the appraisal deadline
after the association sends the notice.
(4) This subsection is applicable beginning June 1,