A South Carolina bill filed earlier this month would require all new automobile insurance policies to have an appraisal clause. 

HB4039 was filed Feb. 19 by Reps. Joe White (R-40), Leon Howard (D-76), and Brandon Guffey (R-48). The bill was referred to the Labor Commerce and Industry Committee. 

The appraisal clause would allow either party to seek an appointment of an arbitrator or arbitrators if there is a dispute over the amount of loss under a property damage liability claim. The arbitration process must start on or before the 19th day after a proof of loss is filed with the insurer. 

According to the bill, the insurer would have to pay for the cost of the arbitration process for the insured if the arbitrator sets the loss at more than one dollar greater than the amount of the insurer’s proposed loss statement. This includes the insured out-of-pocket expenses, attorney fees, and costs associated with establishing the amount of loss. 

A Washington Senate Committee recently approved a right-to-appraisal bill. 

The bill, SB5721, says that once the appraisal clause is invoked, each party has 10 days to select a disinterested appraiser. The appraisers must appoint a “competent and disinterested” umpire, the bill says. If this does not happen, either appraiser may notify the commissioner, and the commissioner shall identify a registered competent and disinterested umpire. The bill defines disinterested as someone with no direct financial interest in the outcome. 

If the appraisers aren’t able to agree on the loss, they must submit their differences to the umpire, the bill says. 

Each party is responsible for their appraisal expenses and equally responsible for the cost of the umpire, the bill says. 

If the amount of loss determined through the appraisal process is greater than the amount of loss the insurance company adjusted before the appraisal process was invoked by $500 or more, the insurance company would reimburse the policyholder for the costs incurred for the process, the bill says. 

The appraisal process costs include reasonable appraiser professional charges, reasonable attorney’s fees, and other necessary costs. 

The bill now sits in the Senate Rules Committee.

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South Carolina State House located in Columbia, South Carolina/SeanPavonePhoto