Insurance Apraisals

[Couch Potato]

No one better be using my cost approach in my appraisals for insurance purposes... I have specific language (noted in 5 different places on the appraisal) that the cost approach is not to be used for insurance purposes. If I ever found that out otherwise, the guilty party better be ready to answer to my lawyer. :icon_mrgreen:

Answer for what? Using the facts in the report you provided? All that language does is make it easier for your lawyer to answer to their lawyer. There is nothing criminal about using a report in an unintended fashion. It just that the appraiser is relieved of most liability for such uses. :new_smile-l:

 

[NC Old Guy]

Ed

Hate to tell you. If any of your clients' buyers use State Farm, it is almost a sure thing. I have calls from LOs looking for a report because State Farm needs it. I remind the LO about all of the certs, etc, but hey. It's their report and they are free to use it or share it with whomever they want. And there are lots of insurance companies also doing it. CP is correct!! It just makes it easier for your lawyer to talk with their lawyer when the house burns down and they're over/under insured becaue they didn't do their job.

For insurance purposes, it is my understanding the Marshall Swift has a different set of manuals/on line for that and it is different from what appraisers use. Talked with Blue Book at a conference last summer. They have a product that if you use their on line service, they have an "automatic" product which can be used for insurance purposes.

 

[Alison Swain]

Ed

Hate to tell you. If any of your clients' buyers use State Farm, it is almost a sure thing. I have calls from LOs looking for a report because State Farm needs it. I remind the LO about all of the certs, etc, but hey. It's their report and they are free to use it or share it with whomever they want. .

Dead on accurate. I personally spoke with my State Farm agent of 20 years last week about this very subject. He saw no need for services marketed specifically to insurance agencies because he said he (and all the other SF agents) waits to get a copy of the appraisal before he writes a policy on a home. He assured me that the same would be true of All State and Nationwide too.

 

[Fred]

No one better be using my cost approach in my appraisals for insurance purposes... I have specific language (noted in 5 different places on the appraisal) that the cost approach is not to be used for insurance purposes. If I ever found that out otherwise, the guilty party better be ready to answer to my lawyer. :icon_mrgreen:

Your lawyer may tell you that such statements are not binding on the intended users unless they agree to them at the engagement stage. It's a little thing lawyer call the "meeting of the minds." Also, your lawyer may look at USPAP and realize your obligation to identify the client's intended use.

There is nothing criminal about using a report in an unintended fashion

And if it is the client's intended use to begin with then it's not even an unintended fashion.