March Madness carries over into April… Your Appraisal in MA Redefined

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Regarding property insurance, appraisal is a commonly used procedure to resolve disagreements over the amount of a loss. However in Massachusetts, with claims under fire insurance policies it is referred to as a “reference proceeding.” This provides that a panel of 3 arbitrators determines the amount of loss or damage.1 Think of the panel as two referees and an umpire, encompassing the sporting seasons upon us.

Some key points regarding Reference Proceeding in MA:

  • The insured submits a written demand for reference of the amount of loss to the insurer. The insurer must, within ten days after receiving the written demand, submit in writing the names and addresses of three potential referees to the insured. The insured must, within ten days, notify the insurer in writing of his or her choice of one of those people to act as referee.2
  • The insured also submits to the insurer the names and addresses of three potential referees. The insurer must notify the insured in writing within ten days of its choice of one of those persons to act as referee.3
  • The two referees chosen have ten days to agree upon and select a third arbitrator, or umpire. If they fail to do so, then either of them or the parties may make written application to the commissioner of insurance for the appointment of the third arbitrator, or umpire. The commissioner then appoints the umpire.4
  • A referee must be disinterested, a resident of the commonwealth, and willing to act as referee. No referee may have served as a referee for either party within four months prior to the date of nomination for appointment, unless the other party gives written consent, or, in the case of the third referee, both parties give written consent.5
  • Within ten days of the appointment or selection of the umpire, the two referees & umpire must meet to hear evidence in the case. Although they may adjourn the hearing from time to time, no more than one week may elapse between hearings except by unanimous consent.6
  • A reference proceeding does not waive any of the insurer’s legal defenses to the claim. The reference proceeding determines only the amount of the loss sustained or the sound value of the property, unless both parties agree in writing that the reference shall be held and shall proceed under the provisions of Mass. Gen. Laws Ch. 251, which discusses generally written agreements to arbitrate a dispute.7
  • The referees & umpire must reduce their award to writing. The umpire must deliver the award to the insured and to the insurer.8
  • The award by the majority of arbitrators is conclusive and binding on the parties as to the amount of loss or damage.9
  • The proceeding is a condition precedent to any right of action to recover for the loss; but the parties may waive that provision.10
  • If an award is rendered by the referees & umpire in favor of the insured, the insurer and the insured are each liable to the umpire for one half of his or her charges for compensation and expenses. However, the umpire’s charges are paid by the insurer, who deducts from any award the insured’s share of such charges. If the award is rendered in favor of the insurer or if no award is rendered, the insurer is liable to the umpire for his or her charges, but may deduct one half of the charges from any payment it makes to the insured.11

The reference procedure is to determine questions of value, not questions of coverage.

1 Mass. Gen. Laws Ch. 175 §99 (Eleventh).
2 Mass. Gen. Laws Ch. 175 § 100.
3 Id.
4 Id.
5 Mass. Gen. Laws Ch. 175 § 99 (Eleventh); Mass. Gen. Laws Ch. 175 § 100B.
6 Mass. Gen. Laws Ch. 175 § 101.
7 Mass. Gen. Laws Ch. 175 § 101E.
8 Mass. Gen. Laws Ch. 175 § 101A.
9 Mass. Gen. Laws Ch. 175 §99 (Eleventh).
10 Id.
11 Mass. Gen. Laws Ch. 175 §§ 101B, 101C.


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