Understanding the Right to Appraisal (RTA) Clause

The Right to Appraisal (RTA) clause provides a mechanism for policyholders (or insurers) to resolve disputes over the amount owed by the insurer for a loss without going to court. This right can be used to negotiate repair costs or the value of a vehicle that has been deemed a total loss by insurance, depending on the situation.

In Oregon, Insurers are not required to have the Right to Appraisal in their policies, but with the exception of one major insurer, most do. There are two types of RTA clauses found in policies. One type gives both the insurance and/or the insured the right to demand an appraisal, and another type requires the insurance and insured to agree to an appraisal. Our team can review your policy with you to help you understand if the Right to Appraisal is available, and if so, which version you have.

Here’s how it works:

1. Impasse on Repair Costs: When there’s a disagreement between the insured and the insurance company regarding the repair costs then the right to appraisal can be invoked by either or both the insurance and insured depending on the policy.   
2. Selecting Appraisers: Both the policyholder and the insurer hire unbiased appraisers. These appraisers evaluate the loss independently and then attempt to reach an agreement on repair costs or vehicle value.
3. Third-Party Umpire: If the appraisers cannot agree on a dollar value, they select a third appraiser (the “umpire”).
4. Binding Decision: If any two out of the three appraisers agree on a specific dollar value for the loss, that amount becomes binding.
5. Appraiser Costs: Oregon laws are very consumer friendly when it comes to the appraisal clause. If the appraiser hired by the insured can negotiate an offer higher than the last offer provided by insurance (even if only $1 higher) then the insurance company is required to pay the costs of both appraisers and an umpire if needed.

Real-Life Example

Let’s consider the case of one of our clients who needed extensive collision repairs ($20,000+) on their Tesla Model Y. Repairs included a new quarter panel, bumper, and wheel among other items. Their insurance company short-paid the repair by over $7,000. Here’s how the RTA process helped them:

1. Invoking the RTA: We referred our client to an expert appraiser, Mark Olson. He helped our client invoke the RTA clause outlined in their insurance policy.
2. Appraiser Evaluation: Our client’s appraiser assessed the repair costs independently, ensuring a fair evaluation. The appraiser hired by the insurance company also performed an independent evaluation.
3. Decision: The appraisers were able to reach an agreed price without needing to hire an umpire. The final binding amount was determined.
4. Full Payment: As a result, the insurance company paid the repair bill in full, covering not only the repair costs but also the appraiser’s fees.

Why Choose a Knowledgeable Body Shop?

1. Accurate Repair Estimates: A reputable body shop understands the correct repair procedures and provides accurate estimates. This ensures that the appraisal process starts on the right footing.
2. Navigating the Claims Process: Experienced shops know how to communicate effectively with insurers, advocating for their clients during the appraisal process.
3. Quality Repairs: Proper repairs are essential for safety and the longevity of the vehicle. A knowledgeable body shop ensures repairs meet industry standards.

Remember, invoking the RTA isn’t always a “magic bullet.” It’s crucial to consult with a qualified appraiser or an attorney before taking any action. However, when used strategically, the RTA clause can empower clients to receive fair compensation for their collision repairs. Choose wisely, and drive safely!