Referral Fee For The Opportunity To Act As The Appraiser Just Plain Looks Bad, Smells Bad, And Is Bad

Read the full article at and at plus more than 4150 posts.


Travelers was presented with a claim that it evaluated and paid promptly. Faced with evidence of additional damage it paid more. Regardless the insured assigned its additional claim to its roofer who retained an appraiser who agreed to work on a contingency fee plus provide a 15% fee to the roofer. In Travelers Casualty Insurance Company Of America v. Mudd’s Furniture Showrooms, Inc., CMS Roofing, Inc., and Jaron Jaggers, Civil Action No. 4:19-CV-186-JHM, United States District Court, W.D. Kentucky, Owensboro Division (March 28, 2022) the USDC in Kentucky found it necessary to vacate the award for breach of the requirement for an impartial appraisal.


In a protracted insurance dispute resulting from roof damage to a Mudd’s Furniture Showrooms (“Mudd’s”) building caused by a severe wind and rainstorm (the “Loss”) the parties were unable to resolve the claim, and Mudd’s invoked the appraisal process under the policy. The resulting appraisal award, which Travelers deems invalid, prompted Travelers to file a declaratory judgment action.

The relationship that Howarth had with Jaggers, the roofer-who became the insured via an assignment- was more than troubling. Cultivating a relationship with a roofing contractor like Jaggers is apparently important to Howarth’s business, so much so that Howarth was willing to pay Jaggers 15% of any compensation he received from serving as the appraiser on this claim.

The Court concluded that the Howarth Group crossed the line. The word “impartial” the requirement the policy placed on people who could serve as an appraiser,The Court concluded that no reasonable jury could determine that Howarth acted as an impartial appraiser . Accordingly, the Court granted summary judgment to Travelers on Count I and vacated the Award.


Appraisal is a tool to fairly, and in good faith, resolve disputes between an insurer and its insured to determine the amount of loss. To reach a fair result the appraisers and the umpire must be impartial and disinterested. The court should have forwarded the evidence presented in the motion for summary judgment to the US Attorney since the award was obtained wrongfully and was an attempt to defraud Travelers who was sued only because it did what the policy required and, when shown more damages, paid for those promptly.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Subscribe to Zalma on Insurance at

Subscribe to Excellence in Claims Handling at

Write to Mr. Zalma at [email protected]; Go to Barry Zalma videos at at