Property Claim Appraisal

PAAC Group provides a no cost, no risk, one-stop shop service solution for your residential and commercial property appraisal claims.

Woman visibly frustrated with her insurance company
Woman frustrated with her insurance company

You are not alone.

We provide a no risk, one-stop service solutions for ALL your property damage needs, with a no cost option for all Policyholders.

If this sounds too good to be true, call PAAC Group to understand our multiple options and no-cost solution for your property claim requirements.

647-725-9648 | info@pa-ac.ca

PAAC Group is your trusted Insurance Appraisers

Our expert appraisers will ensure that the appraisal process complies with the statutory requirement of only determining disputes related to VALUE.

At PAAC Group our team goal is to avoid the long and costly appraisal process as mandated by statutory condition #11 of every property insurance policy.

Appraisal #11. In the event of disagreement as to the value of:
1. the property insured,
2. the property saved or
3. the amount of the loss,

Those questions shall be determined by appraisal as provided under the Insurance Act before there can be any recovery under this contract whether the right to recover on the contract is disputed or not, and independently of all other questions. There shall be no right to an appraisal until a specific demand therefore is made in writing and until after proof of loss has been delivered.

The purpose of appraisal is to settle disputes over VALUATION ONLY.

Appraisal is not to settle disputes over SCOPE OF WORK – as this is independent of all other questions.

Common disputes regarding scope of work

Disputes of scope of work fall under one of two categories:

1) Finding of Fact – which are disputes between conflicting expert opinions i.e. repair vs replacement
2) Finding of Law – which are disputes over coverage entitlement as per policy interpretation.

This is why disputes over Scope of Work is left for the courts to determine. Alternatively, arbitration is another dispute resolution option for both parties (the insurer and insured) provided that both parties mutually agree with this process.

12 reasons why PAAC Group avoids the appraisal process

There are 12 other reasons why PAAC Group avoids the appraisal process:

  1. Insurers Refusal to Pay Awards post appraisal:
    • If the appraisal award is not to the insurers liking, the insurer refuses to pay the award for a multitude of reasons:
      1. Coverage issues:
        1. Insurers don’t agree with replacement costs – they are only willing to pay repair costs
      2. Lack of Jurisdictional authority of umpire
      3. Insurer refuses to accept the insured supporting documentation thus they will not release the award
  2. Determining Actual Cash Value (ACV):
    • The umpire determines ACV without first establishing/defining the criteria for depreciation: 
      1. The method of depreciation to be used
      2. What items are to be depreciated i.e.  Direct Costs, Indirect Costs, Emergency Services etc.…
      3. What components of cost are to be depreciated i.e. material, labor, equipment. 
    • The reason why an umpire does not define the criteria for depreciation is because it is a finding of law and not within the jurisdiction of appraisal to determine. 
  3. An umpire’s role is to pick one parties valuation over the other (as per case law)
    • Most umpires do not adhere to this process – they pick their own value
    • When an umpire picks their own value, without supporting costing from either a contractor or sub trade quotes – they exceed their jurisdictional authority – the value does not represent any scope of work that was supported by either party. 
  4. No written reasons for the umpire’s decision:
    • Umpires do not have to provide reasons for their award decision 
    • All records are destroyed after the appraisal hearing. 
  5. No recording of hearing allowed:
    • This allows the umpire to conduct the appraisal as a quasi-judicial process which is not permitted as per case law.
  6. Apprehension of perceived Bias:
    • Most umpires are either active or retired insurance adjusters or insurance defense council.
  7. No definition of “the amount of loss”:
    • No definition in the insurance act or in the policy wordings and Umpires refuse to define this term. 
  8. Repeat Players:
    • Insurer appraisers continue to appoint the same umpires and use the same experts thus creating familiarity and camaraderie. 
  9. Paid Opinions: 
    • Insurers continue to use the same experts repeatedly – these experts have long stood signed vendor agreements with the insurer. 
  10. Insurers Inside knowledge:
    • Insurance companies know all the outcomes of past appraisals and the umpires that provided favorable outcomes – these umpires continue to be regularly appointed by the insurer.  Appraisal outcomes are not made public. 
  11. Increased Legal Costs:
    • Very costly to have appraisal awards overturned. 
    • Conflicting case law defining the appraisal process
  12. Lack of Governance 
    • At this point there has been no Government intervention by FSRA to impose sanctions against the insurer and their agents for deceptive and unfair claims handling practices including the appraisal process. 

Our team is considered the best appraisers in the insurance business when both parties agree with the scope of work and there is a clear apple-to-apple comparison. You cannot resolve a dispute over valuation of your business or home when the scope of work is different. Likewise, you cannot appraise a watch if the comparable is a different make or model. An insurance appraisal like a jewelry appraisal is a determination of VALUE not a determination of findings of FACT or LAW.

Frequently asked appraisal questions

  • Appraisal 11 as presented in the Statutory 148 of the Insurance Act:
    • In the event of disagreement as to the value of the property insured, the property saved or the amount of the loss, those questions shall be determined by appraisal as provided under the Insurance Act before there can be any recovery under this contract whether the right to recover on the contract is disputed or not, and independently of all other questions. There shall be no right to an appraisal until a specific demand therefor is made in writing and until after proof of loss has been delivered.
  • Is the correct interpretation when “the value of” precede “the amount of loss”:
    • In the event of disagreement as to
      • the value of the property insured,
      • the value of the property saved or
      • the value of the amount of the loss,
      • those questions shall be determined by appraisal as provided under the Insurance Act before there can be any recovery under this contract whether the right to recover on the contract is disputed or not, and independently of all other questions. There shall be no right to an appraisal until a specific demand therefor is made in writing and until after proof of loss has been delivered.
  • Or is the correct interpretation when “disagreement as to” precede “the amount of loss”:
    • In the event of disagreement as to
      • the value of the property insured,
      • the value of the property saved or
      • the amount of the loss,
      • those questions shall be determined by appraisal as provided under the Insurance Act before there can be any recovery under this contract whether the right to recover on the contract is disputed or not, and independently of all other questions. There shall be no right to an appraisal until a specific demand therefor is made in writing and until after proof of loss has been delivered.
  • At PAAC Group we believe the correct interpretation is when “the value of” precedes all three aspects of the loss claim to be valued. It is our opinion that this was the intent of the writer based on the grammatical structure of the sentence and use of comma’s.

  • There is no definition within the insurance act or within the policy wordings.
  • Statutory 6 Outlines the Insured Requirements After Loss states:
    • 6.(1)(b)(i) that the insured is to provide … particulars of amount of loss claimed
    • Meaning details of what was damaged or destroyed

  • No, unless agreed upon by the parties prior to appraisal
  • Appraisal cannot resolve disputes over the scope or work if they are:
    • Factual dispute between conflicting expert opinions on the extent of damages, methodology of repairs
    • Legal dispute over the interpretation of coverage entitlement
  • Canadian Case law agrees.
    • Agro’s Food vs Economical Insurance
    • Wawanesa Insurance vs Nadine Cormier
    • Robert Rilkoff vs The Portage La Prairie Mutual Insurance
    • Kutlarovski vs Aviva

  • No, unless they are agreed upon by the parties prior to appraisal or resolved by the courts before appraisal or after appraisal. If appraisal happens before the method of valuation is resolved there needs to be a bifurcated award during appraisal.
  • A list of valuation methods and definitions that cannot be decided in appraisal
    • “The Amount of the Loss”
    • Replacement Cost – It is not uncommon for the parties to dispute the definition of replacement cost, particularly as it relates to the valuation date of an award
    • Actual Cash Value – Disputes regarding the method of calculating actual cash value, which is jurisdiction specific, are not uncommon in appraisal
    • Period of Restoration and Period of Indemnity – The appraisers and umpire cannot make a coverage or legal determination of these terms. It is not uncommon for a policyholder’s appraiser to claim that the period of restoration and period of indemnity should include the elapsed time between the date of loss and when/if the property is rebuilt after the appraisal amounts are awarded. Conversely, insurers might take the position that the period begins on the date of loss and ends when the physical damages have been repaired/replaced, assuming the exercise of due diligence and dispatch.

  • No, all coverage disputes regarding entitlement should be determined by the courts
  • Examples of common coverage disputes:
    • Floor replacement should it be the entire floor and just one room
    • Kitchen cabinets should all the cabinets be replaced or only select cabinets
    • Sub-limits, exclusions and endorsement interpretation and application
    • Code upgrades interpretation and application

  • It is when the disagreements presented by the appraisers are outside of jurisdictional authority of the appraisal process that the umpire provides multiple awards so the court can decide which of the awards the insured is entitled to.
  • Examples of disagreements within appraisal that should result in Bifurcated Awards:
    • Conflicting methods used to calculate Actual Cash Value (ACV)
    • Conflicting positions on the restoration or indemnity period
    • Conflicting expert opinions on the extent and methodology of repairs
    • Coverage interpretation and entitlement of the insured

  • The courts are clear on this matter – appraisal is to determine the dispute over “VALUE” Only – it is not to resolve factual or legal disputes
  • Appraisal is not a “quasi-judicial process” or an “administrative Tribunal or an Arbitration – because appraisal does not listen to or resolve factual or legal disputes.
    • Desjardiv vs Campbell – Appeal
    • Shinkaruk vs Commonwealth

  • Yes
  • Contact PAAC Group to discuss options to challenge an appraisal award.
Public Adjusters and Property Insurance Attorneys

Our property claim appraisal professionals can help you

Contact us to learn more about residential and commercial property claim services to set up a personal consultation.

647-725-9648

Contact PAAC Group to get started!