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USAA Admitting Bias – Appraisal Clause

by Diminished Value Car Appraiser on January 30, 2015

This is a follow-up article to the “USAA and First Party Claims” piece published on our website a year ago.USAA-Insurance-1-Star

This is an answer from USAA basically admitting that their appraisal clause does not reference impartiality.

Below is  the content of the letter sent by USAA to one of our clients in response to a letter challenging their employee from being the impartial appraiser under the policy’s appraisal clause. You can download the document here: USAA-Appraisal-Clause-Impartial

Reference: Appraiser Selection DisputeDear Mrs. B*****

I am writing regarding the claim referenced below.
Policyholder: A******** B********

Reference #: 009******

Date of loss: January **, 20**

Location of loss: Atlanta, Georgia


The USPAP is an appraisal standard originally developed for Property appraisals and appraisers. It is taken out of context when applying it to auto related claims. Because USPAP is not auto related we are unaware of the USPAP appraisal report you are requesting.

However we have included our DIV evaluation methodology in this reply as requested.

As we have discussed with your representative, the Appraisal process as outlined in the insuring agreement reads as follows:

“If USAA and you do not agree on the amount of loss, either may demand an appraisal. In this event, each party will select a competent appraiser. The two appraisers will select an umpire. The appraisers will state separately the actual cash value and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will pay its chosen appraiser and share the expenses of the umpire equally. Neither we nor you waive any rights under this policy by agreeing to an appraisal.”


No, the appraiser is not receiving additional compensation for handling the DIV appraisal. Our appraiser is a licensed adjuster and appraiser in the state of Georgia and I-CAR certified. There is no reference to impartial in the appraisal section; the reference is for each party to select a competent appraiser.


Our appraiser represents the membership and is paid by the membership, your appraiser is representing you and is paid by you, both the membership and you are responsible for equally paying an umpire if one is needed; our financial burden in the process is equal.


Our appraiser and your appraiser cannot reach an agreement the next step in the appraisal process is to submit a report to an agreed upon umpire. Our appraiser has asked that your appraiser to choose an umpire from a list designated by the Georgia Office of Dispute Resolution that is filed neutral with the state.

Your appraiser has declined to move forward with this selection, at which time we are at an impasse.


You may submit correspondence or questions to me. My contact information is:

Below is a letter our client sent USAA that challenged the usage of an internal employee to be the appraiser under the policy’s appraisal clause

Dear USAA Adjuster,
We received your letter dated ____, unfortunately what you’re stating is erroneous and unacceptable. Your company has not met the policy’s appraisal clause requirements and therefore is  in violation of or contract law.

  1. The Uniform Standards of Professional Appraisal Practice (USPAP) provides a minimum set of quality control standards for the conduct of appraisals in the United States as approved by congress. Please visit the following webpage or review the attached document.Where is your USPAP appraisal report? the document you sent us only shows a vague methodology.
  2. The Appraisal clause states “ if we or you do not agree on the amount of loss…”, the policy contract had already established the parties involved which are the insurer, USAA insurance (company, employees, subsidiaries etc…) hereto referenced as “we” and the insured (named insured, drivers etc…) hereto reference as “you”.Since “we” is the insurer, and since you are a salaried employee of this insurer, you would fall under the designation of “we”. In the same fashion, “you” would include my spouse or child. It is obvious that “we” and “you” cannot be the chosen appraiser as well. Would it be acceptable for my spouse or myself to be my own chosen appraiser?
  3. The Appraisal clause states “…each party will select” and “each party will pay…”, “will” is a future act, and you are currently a salaried employee of the insurer. Are you receiving additional compensation for this claim?
  4. The Appraisal clause states “…select a competent and impartial appraiser…”, first, you have failed to provide a list of your credentials, and second, as a salaried employee of the insurer, you are hardly impartial. Impartiality is also a requirement of USPAP.
  5. If you’re the insurer’s chosen appraiser, and since you are a salaried employee of said insurer, if we agree to an umpire, we would be paying for 1 ½ appraisals whereas the insurer only pays for ½ , that hardly seems fair or lawful.

We hereby demand proper and swift compensation of our vehicle’s loss in value; we also demand that our policy’s appraisal clause be honored.


USAA Policy Holder

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